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Energy renovation of single-family houses in Denmark utilising long-term financing based on equity

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  • Kragh, J.
  • Rose, J.

Abstract

This paper aims to present an economic overview of the opportunities for energy renovation of single-family houses in Denmark financed over the long term. The paper focuses on the economic difference between energy savings and the repayment of investment. Taking out the average remaining 20% equity in long-term property mortgage loans and utilising it for extensive energy renovation improves both the economy and the extent of included measures. Approximately 30% of energy consumption in Denmark is used for space heating. The existing 1 million single-family houses account for approximately half of this, thus making energy renovation a key factor for the reduction of CO2 emissions. The conclusions were that in average the possible budget for renovation varied between [euro]20,000 and 40,000 per single-family house. The equity of the house was particularly dependant on geographical location and construction period. Different energy renovation measures were analysed in terms of economy showing that a wide range of specific measures had a positive economic balance for the homeowner from year 1. The economic balance between saved energy and repayment of the investment is however very dependent on the assumed future energy price. An example showed that a typical house from 1925, still in its original form, could yield annual savings for the homeowner of approximately [euro]2600, assuming a future energy price of 0.2 [euro]/kWÂ h. At the current energy price level of 0.1 [euro]/kWÂ h energy renovation in general is almost economically neutral for the homeowner.

Suggested Citation

  • Kragh, J. & Rose, J., 2011. "Energy renovation of single-family houses in Denmark utilising long-term financing based on equity," Applied Energy, Elsevier, vol. 88(6), pages 2245-2253, June.
    • Handle: RePEc:eee:appene:v:88:y:2011:i:6:p:2245-2253
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    2. Wang, Xiaotong & Lu, Meijun & Mao, Wei & Ouyang, Jinlong & Zhou, Bo & Yang, Yunkai, 2015. "Improving benefit-cost analysis to overcome financing difficulties in promoting energy-efficient renovation of existing residential buildings in China," Applied Energy, Elsevier, vol. 141(C), pages 119-130.
    3. Mahapatra, Krushna & Gustavsson, Leif & Haavik, Trond & Aabrekk, Synnøve & Svendsen, Svend & Vanhoutteghem, Lies & Paiho, Satu & Ala-Juusela, Mia, 2013. "Business models for full service energy renovation of single-family houses in Nordic countries," Applied Energy, Elsevier, vol. 112(C), pages 1558-1565.
    4. Wilson, C. & Pettifor, H. & Chryssochoidis, G., 2018. "Quantitative modelling of why and how homeowners decide to renovate energy efficiently," Applied Energy, Elsevier, vol. 212(C), pages 1333-1344.
    5. Mainali, Brijesh & Mahapatra, Krushna & Pardalis, Georgios, 2021. "Strategies for deep renovation market of detached houses," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    6. Zvingilaite, Erika, 2013. "Modelling energy savings in the Danish building sector combined with internalisation of health related externalities in a heat and power system optimisation model," Energy Policy, Elsevier, vol. 55(C), pages 57-72.
    7. Krzysztof Księżopolski & Mirosław Drygas & Kamila Pronińska & Iwona Nurzyńska, 2020. "The Economic Effects of New Patterns of Energy Efficiency and Heat Sources in Rural Single-Family Houses in Poland," Energies, MDPI, vol. 13(23), pages 1-19, December.
    8. Oropeza-Perez, Ivan & Østergaard, Poul Alberg, 2014. "Potential of natural ventilation in temperate countries – A case study of Denmark," Applied Energy, Elsevier, vol. 114(C), pages 520-530.
    9. Handing Guo & Wanzhen Qiao & Yuehong Zheng, 2020. "Effectiveness Evaluation of Financing Platform Operation of Buildings Energy Saving Transformation Using ANP-Fuzzy in China: An Empirical Study," Sustainability, MDPI, vol. 12(7), pages 1-19, April.
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    11. Baek, Cheonghoon & Park, Sanghoon, 2012. "Policy measures to overcome barriers to energy renovation of existing buildings," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(6), pages 3939-3947.

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