An Incentives Planning Framework for Residential Energy Retrofits: A Life Cycle Thinking-Based Analysis under Uncertainty

Tharindu Prabatha, Kasun Hewage () and Rehan Sadiq
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Tharindu Prabatha: School of Engineering, University of British Columbia (Okanagan Campus), 1137 Alumni Avenue, Kelowna, BC V1V 1V7, Canada
Kasun Hewage: School of Engineering, University of British Columbia (Okanagan Campus), 1137 Alumni Avenue, Kelowna, BC V1V 1V7, Canada
Rehan Sadiq: School of Engineering, University of British Columbia (Okanagan Campus), 1137 Alumni Avenue, Kelowna, BC V1V 1V7, Canada

Sustainability, 2023, vol. 15, issue 6, 1-29

Abstract: Building energy retrofits can reduce emissions and increase cost savings. Some retrofits that can deliver higher emissions savings are not popular due to a lack of economic justifications. Financial incentives can be used to change buyer perception around such retrofits. This study proposes a framework to identify the best-performing retrofit strategies for a given building cluster and the optimal incentive amounts to promote the chosen strategies, accounting for uncertainties, stakeholder priorities, and budget constraints. The proposed framework was demonstrated using a case study complemented with policy insights. Life cycle cost savings and capital cost significantly impact retrofit purchase decisions. Case study results showed that retrofitting houses heated with electricity can produce significant cost savings. However, adopting energy-conscious behaviours in houses heated with natural gas and injecting renewable natural gas into the gas supply can produce two times more emissions savings achieved by any retrofit strategy applied to an electrically heated house. This indicates the need for adopting performance-based incentives over the prescriptive approach to reward occupant efforts in addition to asset performance. Despite potential life cycle cost savings, incentives must be complemented with low-interest loans to promote retrofit strategies carrying higher capital costs.

Keywords: building energy retrofits; financial incentives; life cycle assessment; fuzzy uncertainty; energy policy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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