Cost-effective retrofitting of Swedish residential buildings: effects of energy price developments and discount rates

This paper investigates how the cost-effectiveness of different energy-saving measures (ESMs) in buildings is dependent upon energy prices and discount rates. A bottom-up modelling methodology is used to assess the profitability of different ESMs for Swedish residential buildings. The cost-effectiveness and total techno-economical potential for energy saving of each ESM are calculated for three different scenarios of energy prices up to year 2050 and for different discount rates, including an estimate of the market potentials derived by applying the implicit discount rates given in the literature. The three energy-price scenarios give similar techno-economical reductions of delivered energy (by 31–42 %), as well as a similar ranking for the investigated cost-effective ESMs. This means that there are cost-efficient opportunities for energy reductions in Swedish households for any future developments of the energy prices investigated in this work. The energy price developments have lower impacts than interest rates on the techno-economical potentials of the different ESMs. Thus, increasing energy prices cannot be expected to promote significantly the adoption of ESMs, whereas facilitating the financing of investments in ESMs and reducing other consumer barriers should play key roles in the implementation of ESMs. The importance of allaying stakeholders’ reservations is further stressed by the fact that the estimated market potentials for the ESMs are significantly lower than the techno-economical potentials, underscoring the need for policy actions that accelerate the achievement of the identified techno-economical potentials.