EconPapers    
Economics at your fingertips  
 

The impact of political instruments on building energy retrofits: A risk-integrated thermal Energy Hub approach

Jakob Ahlrichs, Sebastian Rockstuhl, Timm Tränkler and Simon Wenninger

Energy Policy, 2020, vol. 147, issue C

Abstract: Thermal building retrofits are one of the key approaches to mitigate greenhouse gas emissions. Nevertheless, the current rate of retrofits in Germany is around 1%, and the building sector lags behind environmental goals of saving damaging emissions. A potential reason inhibiting investments is the financial risk connected to thermal building retrofits. While recent research focuses on various political instruments to promote environmental investments, their influence on the financial risk of energy efficiency investments has scarcely been considered. In this study, a method to include risk in the financial evaluation of thermal building retrofits is developed. With this method, named as the Risk-Integrated Thermal Energy Hub, the impact of various political instruments such as emission taxes, subsidies, and energy efficiency insurances on investment decisions of homeowners is analyzed. Based on real-world data of 342 one and two-family houses in Germany, this study illustrates how political instruments influence the financial risk and return of example building retrofits. The findings reveal the effectiveness of energy efficiency insurances in mitigating risk, by promoting environmentally friendlier investments relatively cost-efficient compared to subsidies. Further, this case study indicates that emission taxes need to exceed 140€ per CO2 ton to significantly impact investment decisions.

Keywords: Thermal building retrofit; Energy efficiency investment; Greenhouse gas emissions; Environmental policy; Pareto analysis; German energy transition (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421520305681
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:147:y:2020:i:c:s0301421520305681

DOI: 10.1016/j.enpol.2020.111851

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu (repec@elsevier.com).

 
Page updated 2024-12-28
Handle: RePEc:eee:enepol:v:147:y:2020:i:c:s0301421520305681