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The impact of political instruments on building energy retrofits: A risk-integrated thermal Energy Hub approach

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  • Ahlrichs, Jakob
  • Rockstuhl, Sebastian
  • Tränkler, Timm
  • Wenninger, Simon

Abstract

Thermal building retrofits are one of the key approaches to mitigate greenhouse gas emissions. Nevertheless, the current rate of retrofits in Germany is around 1%, and the building sector lags behind environmental goals of saving damaging emissions. A potential reason inhibiting investments is the financial risk connected to thermal building retrofits. While recent research focuses on various political instruments to promote environmental investments, their influence on the financial risk of energy efficiency investments has scarcely been considered. In this study, a method to include risk in the financial evaluation of thermal building retrofits is developed. With this method, named as the Risk-Integrated Thermal Energy Hub, the impact of various political instruments such as emission taxes, subsidies, and energy efficiency insurances on investment decisions of homeowners is analyzed. Based on real-world data of 342 one and two-family houses in Germany, this study illustrates how political instruments influence the financial risk and return of example building retrofits. The findings reveal the effectiveness of energy efficiency insurances in mitigating risk, by promoting environmentally friendlier investments relatively cost-efficient compared to subsidies. Further, this case study indicates that emission taxes need to exceed 140€ per CO2 ton to significantly impact investment decisions.

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  • Ahlrichs, Jakob & Rockstuhl, Sebastian & Tränkler, Timm & Wenninger, Simon, 2020. "The impact of political instruments on building energy retrofits: A risk-integrated thermal Energy Hub approach," Energy Policy, Elsevier, vol. 147(C).
    • Handle: RePEc:eee:enepol:v:147:y:2020:i:c:s0301421520305681
    DOI: 10.1016/j.enpol.2020.111851
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    Cited by:

    1. Ahlrichs, Jakob & Rockstuhl, Sebastian, 2022. "Estimating fair rent increases after building retrofits: A max-min fairness approach," Energy Policy, Elsevier, vol. 164(C).
    2. Bragolusi, Paolo & D'Alpaos, Chiara, 2022. "The valuation of buildings energy retrofitting: A multiple-criteria approach to reconcile cost-benefit trade-offs and energy savings," Applied Energy, Elsevier, vol. 310(C).
    3. Simon Wenninger & Christian Wiethe, 2021. "Benchmarking Energy Quantification Methods to Predict Heating Energy Performance of Residential Buildings in Germany," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 63(3), pages 223-242, June.
    4. Rockstuhl, Sebastian & Wenninger, Simon & Wiethe, Christian & Ahlrichs, Jakob, 2022. "The influence of risk perception on energy efficiency investments: Evidence from a German survey," Energy Policy, Elsevier, vol. 167(C).
    5. Chersoni, Giulia & DellaValle, Nives & Fontana, Magda, 2022. "Modelling thermal insulation investment choice in the EU via a behaviourally informed agent-based model," Energy Policy, Elsevier, vol. 163(C).
    6. Li, X. & Arbabi, H. & Bennett, G. & Oreszczyn, T. & Densley Tingley, D., 2022. "Net zero by 2050: Investigating carbon-budget compliant retrofit measures for the English housing stock," Renewable and Sustainable Energy Reviews, Elsevier, vol. 161(C).
    7. Wenninger, Simon & Kaymakci, Can & Wiethe, Christian, 2022. "Explainable long-term building energy consumption prediction using QLattice," Applied Energy, Elsevier, vol. 308(C).
    8. Simon Wenninger & Christian Wiethe, 2022. "The Human’s Comfort Mystery—Supporting Energy Transition with Light-Color Dimmable Room Lighting," Sustainability, MDPI, vol. 14(4), pages 1-10, February.
    9. Rockstuhl, Sebastian & Wenninger, Simon & Wiethe, Christian & Häckel, Björn, 2021. "Understanding the risk perception of energy efficiency investments: Investment perspective vs. energy bill perspective," Energy Policy, Elsevier, vol. 159(C).
    10. Moeller, Simon & Bauer, Amelie, 2022. "Energy (in)efficient comfort practices: How building retrofits influence energy behaviours in multi-apartment buildings," Energy Policy, Elsevier, vol. 168(C).
    11. Wiethe, Christian & Wenninger, Simon, 2023. "The influence of building energy performance prediction accuracy on retrofit rates," Energy Policy, Elsevier, vol. 177(C).

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