Masters (MSc) in Energy Retrofit Technology

Applied Research Thesis:

A Life Cycle Cost Analysis of an Irish Dwelling Retrofitted to Passive House Standard: Can Passive House Become a Cost-Optimal Low-Energy Retrofit

Standard?

Daniel Coyle BA(Hons) BArch MRIAI

What?, Why?, How?(aim & objectives) (research motivation) (methodology)

+ (some) results & conclusions

RESEARCH AIM & OBJECTIVES:

• Is it cost-effective to retrofit to Passive House standard, or should we

adopt a less intensive performance standard, with lower capital costs?

• Retrofit economics: spending to save - is the additional initial capital

invested today, justified by energy cost savings in the future?

• Requires economic analysis using investment appraisal technique:

Life Cycle Costs Analysis (LCCA).

• Applied research - develop a (simple?) LCCA methodology to be

adopted by architects & construction professionals.

• Methodology should be transparent and replicable.

• Methodology applied to a ‘real-world’ case study building.

What ?

RESEARCH MOTIVATION:

• EPBD recast – 80% reduction in CO2 emissions from buildings by 2050.

• Have to tackle existing housing stock - 0.1 % replacement rate

(majority of existing dwellings will still be around in 2050).

• nZEB targets – nearly zero energy dwellings (2020- onwards).

• Requirement for individual states to develop cost optimal building performance standards – for new and existing dwellings (retrofit).

Why ?

• Existing Irish housing stock – least energy efficient in Europe (BPIE, 2011)

• Average Irish dwelling + 27,000 kWh (primary energy)

Average Irish dwelling – 27,000 kWh

• Average BER - D1 - 242 kWh/m2/year (SEAI, 2013)

Average BER –242 kWh/m2/yr

78% Reduction in Heating Demand

84% Reduction in Energy Demand

88% Reduction in CO2 Emissions

Heat Recovery

Ventilation

Chimney removed to eliminate thermal bridging

High levels of floor, wall and roof insulation ( ≤ 0.12 Wm2K)

Thermal bridges

minimised

Triple glazed “Passiv” windows

Solar hot water panel (to South)

Draft Lobby

Airtight construction

New extension to Passive House standards

Hot Water saving measures & efficiencies

Water saving measures

“breathable” insulation and building materials

Fig. 3: EnerPHit standard - main principals

Passive House retrofit standard:

• Improved comfort & air quality

• 80-90% reduction in energy & CO2

Are predicted energy savings achieved in reality?

How much does it cost?..................... Payback?................... Is it cost effective?

Image: Anne Thorne Architects, 2015

RESEARCH METHODOLOGY: LCCA FORMULA

• Life Cycle Costing - total economic performance of building over its

life-span, or period of analysis. (ISO 5686 Part 5)

• Sum of all capital and operational costs occurring over whole life-time:

How ?

RESEARCH METHODOLOGY: NET PRESENT VALUE FORMULA

• Cash flows and costs occurring at different periods of life-cycle.

• Net Present Value formula – converts all future costs to ‘today’s money’:

RESEARCH METHODOLOGY: LCCA TOOLS

• BLCC5 software tool – freely available LCCA tool developed by U.S.

NIST / Department of Energy (www.energy.gov/eere/femp/tools)

CASE STUDY: GALWAY PASSIVE HOUSE (Simon McGuinness Architect)

‘Typical’ pre-regs. semi-d

Pre-retrofit:

BER F (388 kWh/m2/yr)

48,688 kWh per year

Post-retrofit:

BER A2 (43 kWh/m2/yr)

2,478 kWh per year

95% reduction in Energy

DemandSpace heating ≤ 15 kWh/m2/yearAirtightness – 0.37 ach @ 50 Pa

CASE STUDY ANALYSIS: CAPITAL INVESTMENT COSTS

• Include all project costs:

building costs, taxes, grants,

relocation costs, certification

and professional fees.

• Energy efficiency retrofit

works normally carried out in

conjunction with other

general refurbishment works.

• Cost of Passive House /

energy efficiency measures

must be isolated from

incidental refurbishment

costs (the “anyway costs”)

• PH retrofit initial capital

costs: €110,510 (65% of total

project costs)

CASE STUDY: MAINTENANCE, REPAIR, & REPLACEMENT COSTS

• Annual operational energy demand calculated using DEAP.

• DEAP – an asset rating tool : measures the building’s energy

performance, not the occupant’s behavior within it.

• DEAP results should be compared with monitored (actual) energy use.

CASE STUDY: OPERATIONAL ENERGY COSTS

CASE STUDY: ALTERNATIVE RETROFIT SCENARIOS

RESULTS OF LCCA

1st2nd 3rd 4th

And the winner is.........

Doing nothing is the

most expensive option

RESULTS OF LCCA

• Calculation assumptions: 4% discount rate (real), 4% fuel price escalation rate, 30 year investment period, 50 year life-span, 40% residual value.

• Based on the initial assumptions – the Passive House retrofit is economic –Net Savings (profit) of €34,626 at end of investment period.

• B3 ‘Shallow Retrofit’ is more cost effective (greater net savings / profits & shorter payback).

• Payback is a poor indicator of cost effectiveness.

SENSITIVITY ANALYSIS

• The ‘what ifs ?......’

• Output results of LCCA calculations dependent on input variables:

capital costs, operational savings, and investment parameters.

• Sensitivity analysis to examine effect of changing variables.

• Which of the variables has the most impact on cost-effectiveness of the

energy efficiency measures?

• What investment parameters are required to make Passive House Cost

Optimal ?

SENSITIVITY ANALYSIS: DISCOUNT RATE

0% discount rate

€200,000 profit

2.6% discount rate B3 ‘shallow retrofit’

overtakes Passive House

> 5.6% discount rate Passive House

becomes uneconomic10% discount rate

€50,000 loss

SENSITIVITY ANALYSIS: FUEL PRICE ESCALATION RATE

breakeven value:

1.8% fuel inflation

PH cost optimal:

7% fuel inflation

15% fuel inflation:

€750,000 profit

SENSITIVITY ANALYSIS: INVESTMENT TIME PERIOD

breakeven value:

19 years

PH cost optimal:

43 years

100 years:

€325,000 profit

SENSITIVITY ANALYSIS: ENERGY SAVINGS ‘PERFORMANCE GAP’

• Are operational energy costs savings

being achieved in reality?

• Case study: monitoring of energy use over

12 months shows good correlation

between calculated (DEAP) and measured

energy usage.

• No measured performance data for

original pre-retrofit (F rated) dwelling. Is

DEAP over-estimating actual energy use?

kW

h/y

ear

CONCLUSIONS OF RESEARCH STUDY

• Retrofitting existing dwellings to the Passive House standard can achieve required 80% reductions in energy use and CO2 emissions (nZEB).

• Can also be cost-effective, and even profitable with the right economic investment parameters (4% discount rate, 30 year investment period, 4% fuel inflation).

• Can become the cost-optimal standard with lower discount rates ( 43 years), or assuming higher fuel escalation rates (> 7%).

• Economic parameters applied to the financing deep retrofit are key to its economic viability – interest rates & investment timescale.

• A 2% reduction in the interest rate is equivalent to a €50,000 increase in the SEAI warmer homes grant (over a 30 year investment period).

THANK YOU FOR LISTENING

Daniel Coyle Architects

info@danielcoylearchitects.ie

www.danielcoylearchitects.ie