Profitability Of Energy Saving Investments In German Housing Stock

This paper analyses whether investments in energy saving measures are profitable or not. Based on two typical buildings (single family house and multi-family house) the authors have calculated the profitability of a given set of standard measures (e.g. wall insulation, roof insulation, new heating system) which are not yet part of the German energy ordinance but could be part of it in the near future. The calculations were made from the view of owners who lives in their houses as well as from the view of landlords. The fist method used within the study is suitable for owners who live in their houses. A refurbishment investment is efficient if the price for the unit of saved energy is lower than the expected price for the energy to be paid at each future time period. The calculations show that the analysed energy saving measures are profitable for owners even if the future energy price will not rise compared to today. For landlords the situation in Germany is different. The landlords have to pay the investment costs, the tenants get the saving of heating costs. The landlord has only the possibility to raise the rent according to the German rental law. The calculations were made with the Net Present Value Method. Here the present value of cash outflow (the additional costs) is subtracted from the present value of cash inflow (mainly the additional rent). A positive NPV means that the investment should be made (is profitable). The calculations show that a general statement about the profitability of energy saving investments for landlords is not possible. It depends mainly on the situation of the rent before refurbishment relating to the local rent level, the assumed raise of the local rent level in future and the decrease of vacancy through the energetic refurbishment. These factors are different for different regions in Germany.