Marginal costs and benefits in buildings energy retrofit transactions

Since some pioneering studies published during the late eighties, an increasing amount of research has addressed issues related to the economic and financial valuation of buildings' energy retrofitting transactions over the span of the last two decades. Nevertheless, conflicting results emerge: some actions turn out to be feasible, while others do not, depending on several variables such as investment costs, energy supply costs and energy price trend. Moreover, the supposed price premium for green buildings is still unclear and ambiguous. According to the economic theory, a way to assume decisions related to feasibility issues relies on the comparison between marginal costs and benefits. A couple of recent studies discussed about marginal costs and benefits in building energy retrofitting transactions, arguing that marginal costs are found to be steeply increasing with raising the thermal standards of buildings. Nonetheless, due to the paucity of systematic studies and consistent data, the topic deserves further investigations. This essay aims to expose and discuss results obtained in a research conducted on public housing settlements. Analysing several hypotheses of energy retrofits, marginal costs are found to assume a near-parabolic shape: it is, firstly, mildly decreasing and then sharply increasing. Moreover, marginal costs are compared with marginal benefits, in order to highlight feasible intervention options.