Business case study for the zero energy refurbishment of commercial buildings

Net zero energy is already an ambitious target for several buildings, especially since the DIRECTIVE 2010/31/EU that requires increasing the number of nearly zero energy buildings. The existing commercial building stock needs to be included in order to achieve the 2020 EU environmental targets. The main barriers of zero energy refurbishment of existing nonresidential buildings appear to be financial rather than technical, next to a number of other extrinsic factors that do not stimulate such an investment. While a business case for new zero energy buildings is believed to exist, controversial opinions can be found with respect to refurbishment of large buildings. The present study aims to identify the factors that affect the feasibility of the zero energy refurbishment of existing commercial buildings, while suggesting ways to create the business case addressing the Dutch market. Through interviews with real estate investors, the study identified the financial and technical barriers encountered today to undertake deep energy retrofit. Subsequently, the design interventions needed to refurbish a Dutch office building and meeting the net zero energy target were evaluated using a software complying with the Dutch standards NEN 7120. A risk and sensitivity analysis with Monte Carlo simulations showed the influence that design aspects, energy price and landlord-tenant agreements have on the business case. The study has concluded that a business case considering the energy savings alone is not sufficient to convince investors. However, when the design provides additional benefits, such as increasing the property value, the refurbishment can become feasible. This is an important observation to promote the refurbishment towards a zero energy building stock.