Cost effectiveness
of energy-efficiency
housing refurbishment

In the case of owner-occupied houses for a single family almost all energy-related shell refurbishment measures pay for themselves within a few years. When it comes to apartment buildings this tends to take longer – unless political instruments are put in place to counteract this.

These are the results of our study on behalf of the WWF Germany, for whom, on the basis of 32 case studies, we calculated the cost effectiveness of refurbishment measures on single-family houses and apartment buildings.

When is energy-efficient building refurbishment worthwhile?

For a better comparability we limited our example calculations to the refurbishment of the building shell. We also differentiated between four levels of refurbishment (non-refurbished, single measures on the shell, efficient house standard 70 and efficient house standard 55).

Owner-occupied single-family homes

• Regardless of the type of heating, energy procurement costs (incl. CO₂-tax) accumulated over the years – will decrease significantly by 2045, as the level of refurbishment increases.
• Overall, energy-efficient refurbishment is economical for all of the four heating sources analysed (existing gas boilers, new gas boilers, pellet boilers and heat pumps). And this is despite the increased investment costs incurred by the increased levels of refurbishment.
• Moreover, more efficient buildings mean investment costs for heating also sink.
• Nonetheless, the refurbishment rate for detached houses remains low. To counteract this, regulatory minimum efficiency standards or adaptations to the current funding programme could be an option.

Apartment buildings

• Here too, energy costs as well as investment costs for heat generation will fall by 2045.
• At the same time, the investment costs for housing refurbishment measures are increasing.
• The savings in energy costs (incl. CO₂-tax) through energy-efficient refurbishment are not sufficient to compensate fully for the additional cost of thermal insulation.
• Refurbishment of existing apartment buildings is thus only partially cost-effective.
• The modernisation levy on tenants is sufficiently high to cover the costs.
• To ensure a socially responsible heat transition in the buildings sector, the burden on tenants will have to be significantly lightened. This could be achieved through higher subsidy rates for rented residential buildings, socially differentiated subsidy rates as well as a further reduction in the modernisation levy.

Investment in building refurbishment as insurance against risk

Overall, the study shows: For owner-occupiers as well as for tenants, investments offer long-term insurance against future cost risks. Increasing gas network charges and increasing CO₂ prices are already foreseeable, and uncertainties concerning energy prices in the future cannot be ruled out. Efficient buildings are much less exposed to all of these risks.

Our approach

As part of our calculations, in addition to the four different refurbishment levels we also examined four different heating methods. The cost effectiveness of refurbishment measures for the building shell was analysed for a total of 16 single-family homes and for 16 apartment buildings.

We calculated the total costs up to the year 2045. These include annual investment costs for measures carried out on the shell of the building, heating or other measures as well as all ongoing operational costs, such as fuel, maintenance costs or CO₂ tax. All these values were accumulated from the year 2024 up to 2045 and the totals were then compared. Finally, we compared the emissions for the different options against each other.

Links and downloads

To the study (PDF in German)

Project team: Frederick Julian Lettow, Dominik Rau, Nils Thamling

Latest update: 16.07.2024