Lifecycle cost analysis of residential buildings considering thermal performance and financial uncertainties

Building energy-efficient houses has been a major focus in the construction industry to lower its carbon footprint. Prior research has indicated that there is a cost trade-off between energy efficiency and capital cost. However, most cost-benefit analysis, projections use current energy prices and insulation performance, undermining the impact of future uncertainties on the project’s financial projection. This research aims to present a holistic framework where optimal insulation material and renewable pricing scenarios are considered throughout a building’s Lifecycle Cost (LCC) analysis. Firstly, two Australian residential case buildings were selected to showcase the capability of the framework. Next, the optimal insulation material is selected using multi-criteria decision analysis which considers local climatic and economic conditions. Adjustments to the LCC parameters by considering the impacts of building quality on thermal performance are also performed. Results have shown that Building Quality Index (BQI)-adjusted building insulation specifications can provide a performance buffer (11.6%) in residential settings without significant additional costs. Thirdly, a financial model was also constructed considering the uptake in renewable energy and its macroscopic impact on the overall energy price. These changes were then used to modify the inputs of the LCC analysis to determine the best energy-saving solutions. Unexpectedly, the LCC analysis also found that an aggressive uptake in renewable energy production, which would drive down energy prices, may disincentivise stakeholders from opting for more capital-intensive additional energy saving measures (ESMs). By utilising this framework, designers can produce localised and future-proof solutions, addressing the current limitations of LCC analysis.