How photovoltaics make energy refurbishment more affordable in apartment buildings

Abstract

The costs of energy efficiency renovation of Germany’s postwar apartment buildings have sharply increased since pre-covid years, as have interest rates and hence the costs of servicing loans that finance these renovations. Despite increases in energy costs, it has become virtually impossible to recoup energy-efficiency renovation costs through energy cost savings, with many projects bringing substantial losses. The common method of third parties offering rotating finance to ease the initial costs, and being repaid after short payback periods, therefore no longer works. On the other hand, rooftop photovoltaics have decreased sharply in price, and continue to do so. This study explores the economics of installing photovoltaics, with or without heat pumps, along with energy-efficiency renovation, based on two typical case study apartment buildings in North Rhine-Westphalia. Using fine-grained energy flow modelling and net-present value cost-benefit analysis, it finds that energy-efficiency renovation brings losses of over 80% but that these can be substantially reduced by the gains from rooftop PV, especially when a heat pump is included. The larger the PV system, the larger the gains, but roof size limits this. The study recommends that shared rooftop PV systems be promoted as the norm with comprehensive energy-efficiency renovation in Germany.