Affordability Assessment of Energy-Efficient Building Construction in Italy

Abstract

This research tries to investigate, in the current condition of the Italian real estate market, the economic advantage of investing in energy retrofitting of existing buildings or in expenditure aimed at obtaining higher energy performances in the construction phase of new buildings. A cost-benefit analysis is developed referring to the construction industry entrepreneur. Firstly, the increase in value due to a different measurement of the energy performance of new buildings or newly redeveloped residential buildings is achieved through an innovative statistical approach. Energy performance is measured by taking as a reference the category of energy certification, as required by European legislation. In the estimate of the contribution, the measurement of energy performance, expressed on an ordinal scale, is treated as a categorical variable in the implementation of an iterative regression model, called the alternating least squares model. Afterwards, this contribution is compared to the cost of sustainable building, trying to define a percentage increase in cost compared to a minimum condition according to different and increasing levels of energy performance. In the developed case studies, the comparison between likely benefits and investment spending showed that the entrepreneur would have no convenience at an expense for energy retrofitting while obtaining a positive balance in the construction phase of new buildings. The financial advantage grows if the investment is aimed at achieving the best energy performance and in areas where the price level of the real estate market is lower. The finding can be used as a guide for construction industry investors to make decisions in energy-efficient residential buildings production or transformation.

Contextualized Property Market Models vs. Generalized Mass Appraisals: An Innovative Approach

“…The hedonic price method constitutes the most popular mass appraisal technique, mainly due to its ability to allow an understanding forecast of the real estate markets' dynamics. Generally focused on single-family houses and commercial properties [20][21][22][23], hedonic price modelling has been mainly used to assess the effects of social, environmental, and urban characteristics on property values [24][25][26][27][28][29][30], pointing out the weight of urban amenities [31][32][33][34][35][36], environmental externalities [37][38][39][40], access services and neighborhood attributes [41][42][43][44][45], and energetic factors [46][47][48]. Other studies have highlighted the influence of socio-economic factors on the property price formation [49][50][51][52].…”

Mapping Knowledge in the Economic Areas of Green Building Using Scientometric Analysis

“…The initial and after-stage is included in LCA as well as the construction stage. This special research attention in the design stage is because any revisions after the design stage is considered uneconomic [71]. The initial decision has a considerable impact on the depletion of building performance resources and waste emissions during the whole life cycle [72].…”

“…High-impact studies of green building market demand and its financial return further support the necessity for developing green building [63]. Additionally, studies started to extend economic assessment for the retrofitting of existing building or in expenditure to obtain higher energy performance in the construction phase of new buildings [71]. This period features the diversified practical economic assessment of specific green building practices and the market affordability of green building.…”

“…The building contractors' perspective is clearly different from that of the owners. The benefits of introducing an energy efficient design into a building, for example, are incommensurate with the increase in property value [71]. Economic theories such as game theory and agent cost need to be better cooperated with GBE studies, as well as strategies for dealing with conflicts of interest between stakeholders [107].…”

Life-Cycle Assessment and Monetary Measurements for the Carbon Footprint Reduction of Public Buildings

“…This study investigated the energy-environmental effects of the envelope retrofit [9][10][11][12][13], also taking into account economic-financial measurements in three stages: 1) a technical-technological analysis of the hypothesized energy performance improvement by means of the use of sustainable materials, components, and techniques such as wooden double-glazed windows, organic external wall insulation systems, and green roofs; 2) an environmental analysis of this project, developing the life-cycle assessment (LCA) aimed at quantifying the potential impacts on the environment and human health associated with the implementation of the above-mentioned project in order to verify its environmental effectiveness and compliance with the environmental standards [14,15]; and 3) an economic and financial valuation aimed at identifying the cost-effectiveness and the financial sustainability of the project as a whole and in its three parts [16,17]. Due to the complementarity of economic and financial performances, such evaluations involve different areas of decision-making [18][19][20]. Similarly, the complexity of the environmental issue brings up practical and symbolic components [21][22][23] that monetary measurement can represent only partially [24][25][26].…”