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Landlord–Tenant Dilemma: How Does the Conflict Affect the Design of Building Energy Systems?

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  • Larissa Kühn

    (Institute for Energy Efficient Buildings and Indoor Climate, E.ON Energy Research Center, RWTH Aachen University, 52074 Aachen, Germany)

  • Nico Fuchs

    (Institute for Energy Efficient Buildings and Indoor Climate, E.ON Energy Research Center, RWTH Aachen University, 52074 Aachen, Germany)

  • Lars Braun

    (Institute for Energy Efficient Buildings and Indoor Climate, E.ON Energy Research Center, RWTH Aachen University, 52074 Aachen, Germany)

  • Laura Maier

    (Institute for Energy Efficient Buildings and Indoor Climate, E.ON Energy Research Center, RWTH Aachen University, 52074 Aachen, Germany)

  • Dirk Müller

    (Institute for Energy Efficient Buildings and Indoor Climate, E.ON Energy Research Center, RWTH Aachen University, 52074 Aachen, Germany)

Abstract

To achieve climate goals, the European Union needs to increase building renovation rates. In owner-occupied buildings, energy cost savings provide financial incentives for renovation. However, 30% of all Europeans live in rented property, where conflicting stakeholder interests arise. Landlords are responsible for renovation decisions (building envelope and energy system) and the corresponding investments. Tenants face rising rents and only slightly benefit from falling energy costs. The literature calls this conflict the landlord–tenant dilemma. However, publications lack a quantification, leaving gaps in understanding its impact on technology choices and the heat transition. To address this, we incorporate the perspectives of landlords and tenants in a model-based approach for optimized technology choice (mixed-integer linear program). We compare optimal individual technology choices with the total cost optimum (including costs for landlords and tenants) for renovation decisions. Additionally, we examine how changes in the regulatory framework affect the economically driven landlord’s technology choice. Our study reveals that total costs and emissions are up to 60% and 283% higher for landlords deciding for rented houses compared to owner-occupied properties. Current approaches to solve the dilemma partly favor the development of climate-friendly energy systems. However, the renovation of the building envelope and operation costs are mostly disregarded in the decisions of landlords.

Suggested Citation

  • Larissa Kühn & Nico Fuchs & Lars Braun & Laura Maier & Dirk Müller, 2024. "Landlord–Tenant Dilemma: How Does the Conflict Affect the Design of Building Energy Systems?," Energies, MDPI, vol. 17(3), pages 1-27, January.
    • Handle: RePEc:gam:jeners:v:17:y:2024:i:3:p:686-:d:1330482
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    References listed on IDEAS

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    1. Braeuer, Fritz & Kleinebrahm, Max & Naber, Elias & Scheller, Fabian & McKenna, Russell, 2022. "Optimal system design for energy communities in multi-family buildings: the case of the German Tenant Electricity Law," Applied Energy, Elsevier, vol. 305(C).
    2. Taruttis, Lisa & Weber, Christoph, 2022. "Inefficient Markets for Energy Efficiency - Empirical Evidence from the German Rental Housing Market," VfS Annual Conference 2022 (Basel): Big Data in Economics 264056, Verein für Socialpolitik / German Economic Association.
    3. Lisa Taruttis & Christoph Weber, 2022. "Inefficient markets for energy efficiency - Empirical evidence from the German rental housing market," EWL Working Papers 2202, University of Duisburg-Essen, Chair for Management Science and Energy Economics, revised Feb 2022.
    4. Schütz, Thomas & Schiffer, Lutz & Harb, Hassan & Fuchs, Marcus & Müller, Dirk, 2017. "Optimal design of energy conversion units and envelopes for residential building retrofits using a comprehensive MILP model," Applied Energy, Elsevier, vol. 185(P1), pages 1-15.
    5. Petkov, Ivalin & Mavromatidis, Georgios & Knoeri, Christof & Allan, James & Hoffmann, Volker H., 2022. "MANGOret: An optimization framework for the long-term investment planning of building multi-energy system and envelope retrofits," Applied Energy, Elsevier, vol. 314(C).
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