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Buildings Thermal Retrofit Investement under ESCO Formula - A Case Study from Poland

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  • Tomasz Lukaszewski

Abstract

Purpose: The goal of analyzing investments carried out under the ESCO formula is to determine, implement and apply an optimal set of retrofitting technologies in order to reduce facility’s energy costs borne by its public owner, maintain a satisfactory level of building thermal parameters while upholding the economic profitability of the investment for the private partner. The purpose of this article is to show the investment evaluation process, which consists of determining the scope and method of investment undertaken to achieve the goals mentioned above. Design/Methodology/Approach: A case study approach has been used to assess the profitability of building retrofit investment. The research procedure includes: (1) assessing the characteristics of the selected buildings; (2) collecting data; (3) developing retrofit alternatives, (4) evaluating project profitability of the project. Findings: The empirical results show that the monthly costs of energy supply to buildings that would be borne by the municipality in case of realizing term modernization investment in ESCO formula would be lower than the cost of commercial loan taken for the total value of the investment in case the municipality would conduct the thermal retrofit on its own. Practical Implications: Research findings may be relevant for those municipalities in Poland which for some reason, have not decided to improve the technical condition of their buildings on their own. Originality/Value: The empirical results presented in this paper show that thermal modernization of buildings carried out in the ESCO formula can make this investment financially profitable for the private partner while reducing the cost and risks of the public partner.

Suggested Citation

  • Tomasz Lukaszewski, 2021. "Buildings Thermal Retrofit Investement under ESCO Formula - A Case Study from Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(2B), pages 1081-1093.
    • Handle: RePEc:ers:journl:v:xxiv:y:2021:i:2b:p:1081-1093
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    References listed on IDEAS

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    1. Paolo Maria Congedo & Delia D’Agostino & Cristina Baglivo & Giuliano Tornese & Ilaria Zacà, 2016. "Efficient Solutions and Cost-Optimal Analysis for Existing School Buildings," Energies, MDPI, vol. 9(10), pages 1-24, October.
    2. Trianni, Andrea & Cagno, Enrico & De Donatis, Alessio, 2014. "A framework to characterize energy efficiency measures," Applied Energy, Elsevier, vol. 118(C), pages 207-220.
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    More about this item

    Keywords

    ESCO model; economic efficency; energy efficiency; investment appraisal.;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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