Energy efficiency retrofits in the residential sector – analysing tenants’ cost burden in a German field study

With the goal of reducing carbon dioxide emissions and curbing climate change, increasing the energy efficiency of buildings with energy efficiency retrofits is an important task. In Germany a large share of the residential building stock is rented. This comes with barriers to energy efficiency retrofitting due to split incentive problems. Alongside existing government incentive programmes, the German tenancy law allows landlords to add a maximum of 11% of the energy-related modernisation costs onto the annual rent. Studies evaluating the actual outcomes, from an energy as well as a social point of view, are rare. This article compares calculated theoretical heating energy consumption for prior to and after retrofit with actual consumption data after retrofit. Further, the issue of household expenses is addressed by comparing increased rental costs after retrofit with household's energy expenses prior and after retrofit. Despite a reduction in energy consumption of 70%, more than half of the households faced increased costs due to higher rents after retrofit. Even when increases in energy prices are taken into account, still one third of the households faced higher costs. For a fairer and more effective distribution of costs and benefits, this article stresses the importance of alternative financing models.