Evaluation of the impact of climatic and macroeconomic scenarios on the convenience of "nearly zero energy" building renovations: application of a stochastic LCC approach to a reference building

The energy retrofit of the existing building stock is an urgent imperative if we consider the need to limit the consumption of fossil sources and to reduce “energy poverty” triggered by the increase in energy prices. These topics were recently evidenced by the fragility of the economic system following the Russian-Ukrainian war event at the beginning of 2022. Long-term national strategies to support the renovation of the EU building stock must carefully evaluate solutions to reduce the actual financial gap between the «minimum requirements» and the «nearly Zero» energy performance levels to push a deep renovation of buildings. However, the design of specific policies to bridge this gap must take into account the volatility of the macroeconomic environment during the life-cycle of the building. Standardized Life Cycle Costing (LCC) methods disregard the long-term uncertainty affecting the macroeconomic variables and consequently misrepresent the associated risk on the economic convenience of building renovation. The present work then applies a “stochastic” approach to LCC to analyze the impact of future possible macroeconomic scenarios on the economic affordability of building retrofit solutions. The stochastic LCC is applied to a case study represented by several renovation options of a reference building located in different Italian climate areas. Results show that the Global Costs of different retrofit solutions and the financial gap between «minimum requirements» and «nearly Zero» renovations are strongly influenced by the underlying macroeconomic environment. A widespread application of this approach and greater consideration of the volatility of economic parameters would allow establishing specific funding schemes and financing instruments to push a real “renovation wave” of EU buildings.