Abstract
Energy saving is a major policy objective worldwide and in the EU in particular. Evaluating the convenience of
energy-efficient investments, however, is complex. This paper aims to apply stochastic Life Cycle Costing to
assess the economic value of energy-efficient building retrofitting investments. The proposed approach investigates
how macroeconomic variables affect such an evaluation by explicitly taking into account their interdependent
stochastic nature. Consequently, the economic evaluation of an investment is itself stochastic thus
expressing both its expected value and its inherent uncertainty and risk. On this basis, an illustrative case-study
is presented, where alternative designs of the energy-saving intervention are compared and a sensitivity analysis
performed to identify the determinants of the LCC outcome and of its variability. In terms of policy implications,
a tool providing a sounder evaluation of the convenience of such investments can suggest when and to what
extent incentives may be appropriate to facilitate these investments and what possible financial instruments
could be put forward in order to reduce the associated risk.
Lingua originale | English |
---|---|
pagine (da-a) | 1207-1219 |
Numero di pagine | 13 |
Rivista | Energy Policy |
Volume | 129 |
DOI | |
Stato di pubblicazione | Pubblicato - 2019 |
Keywords
- Life cycle costing
- Vector autoregression