Assessing the Impacts of Energetic Retrofitting on Economic, Ecological and Social Parameters–A Case Study in Germany

Abstract

To pave the way towards climate neutrality in 2045, it is required for Germany to upgrade and retrofit its existing energetically low-performing building stock. This task is challenging because a major share of the existing building stock in Germany is being rented, leading to more complex landlord-tenant dynamics. Landlords mainly shoulder the initial costs of the energetic retrofitting measures but only indirectly benefit, through possible rent increases. Tenants, on the other hand, directly benefit from the improved thermal comfort and lower heating bills. To ensure the sustainability of the energetic retrofitting, a goal of harmony among the economic, ecological, and social factors must be attained, ideally benefiting tenants and landlords. This paper examined this balance in detail, focusing on the costs and subsidies for landlords to improve energy efficiency and how this affects rent and heating costs for tenants. A life cycle assessment of materials used in retrofits was conducted. The findings revealed that the retrofitting measures were environmentally and economically favorable from the landlord's perspective. However, the reduction in heating costs achieved by retrofitting the building was below the potential rent increase, making the measures economically unfavorable for the tenant.