Assessment of financial potential of real estate energy efficiency investments–A discounted cash flow approach

Alexandre

Sustainable Cities and Society

et al. 2016

a b s t r a c tEuropean Union (EU) regulations aim to ensure that the energy performance of buildings meets the cost-optimality criteria for energy efficiency measures. The methodological framework proposed in EU Delegated Regulation 244 is addressed to national authorities (not investors); the optimal cost level is calculated to develop regulations applicable at domestic level. Despite the complexity and the large number of possible combinations of economically viable efficiency measures, the real options for improving energy performance available to decision makers in building retrofit can be established. Our study considers a multi-objective optimization approach to identify the minimum global cost and primary energy needs of 154,000 combinations of energy efficiency measures. The proposed model is solved by the NSGA-II multi-objective evolutionary algorithm. As a result, the cost-optimal levels and a return on investment approach are compared for a set of suitable solutions for a reference building. Eighteen combinations of retrofit measures are selected and an analysis of the influence of real options on investments is proposed. We show that a sound methodological approach to determining the advantages of this type of investment should be offered so that Member States can provide valuable information and ensure that the minimum requirements are profitable to most investors.

Section: Risk Uncertainty and Real Options In Energy Retrofit Of Buimentioning

confidence: 99%

A comparison between cost optimality and return on investment for energy retrofit in buildings-A real options perspective

Alexandre

Sustainable Cities and Society

et al. 2016

“…As Kyrö et al have stated [46], these include external factors (e.g., location, availability of nearby services, commuting opportunities) and value-determinant factors (e.g., gross rent, yield, vacancy rate, residual value). The influence of energy efficiency on the overall value by way of such value-determinant factors is minor, approximately 2% of the real estate value [47] which results in a decrease in the motivation of the contractor to invest more in energy efficiency. Energy prices have not been rising steeply enough to create considerable demand for energy efficiency measures.…”

Section: New Path Creation In the Merareponen Casementioning

confidence: 99%

How to Succeed in Low-Energy Housing—Path Creation Analysis of Low-Energy Innovation Projects

2015

Self Cite

Abstract:The low-energy and the nearly zero-energy buildings trend is calling for radical new innovations from the construction industry. This study uses path creation theory to examine two innovation concepts for low-energy housing in Northern Europe with contrasting outcomes-with one being an apparent market success and the other a disappointment. The results highlight two issues behind the success, one of a systemic nature and the other concerning innovation management. First, the development of energy efficiency regulations and the dominant technological trajectory regarding low-energy houses are interdependent. However, it seems that while supporting the trajectory of the innovation developed in the first case, regulators created virtually insurmountable cognitive and normative obstacles to finding alternative technological pathways. Second, the significance of proof of concepts for new innovations cannot be underestimated. The importance of a pilot project rests not only on showcasing and testing the technology, but also on its ability to increase political support, investments, and public awareness. The study implies that low-energy construction seems to be the next great challenge, one where genuine co-operation between the industry, public authorities and academia is a prerequisite for success.

Latvian Journal of Physics and Technical Sciences

“…It has been analysed that internal rates of return grow with energy improvement actions [8]. Green building development can have a variety of reasons, for example [7, p. For modernisation of housing stock in general, there are European funds, which finance up to 85 % of the cost of the project.…”

Section: Overview Of Theoretical Aspects and International Experiencementioning

confidence: 99%

Energy Aspects of Green Buildings – International Experience

Kauškale

Geipele

Zeltins

et al. 2016

At present, reduction of greenhouse gas emissions is one of the main environmental priorities globally, and implementation of sustainability aspects in the construction industry, including energy aspects, is of major importance for long-term environmental development, as buildings have a long life cycle and require many resources both for construction and operation periods. The aim of the research is to analyse energy aspects of green buildings. The results of research show that the construction of green buildings can significantly result in energy savings and has other benefits for different market participants. Future research directions have been identified as well.