Avoiding financial lock-in effects in case of a stepwise energy renovation of social housing in Flanders

Social housing companies in Flanders are facing the need for a thorough renovation of their building stock in the coming years. This renovation should be in line with the policy targets to reduce the energy use of buildings by 2050. As such thorough renovation scenarios require a high investment cost; a stepwise approach is often implemented. It is important to ensure that the overall investment cost for such a step by step approach is not (much) higher than an “in-depth at-once renovation”. This paper reports on the development of a method to support social housing companies in making a cost-optimal renovation planning for their building stock. Whereas current research focuses on net present value and payback time, this paper considers the life cycle cost for the evaluation of the investments, taking into account: (1) available financial resources over time, (2) various credit facilities over time and (3) various technical options leading to different energy savings. To check consistency and applicability, the method is tested on four case studies. Despite some uncertainties in this early development stage of the method, it is possible to draw some first conclusions based on the assessment of one case study. Since the results of the LCC assessment depend on the assumed economic parameters and expected service life of the building, those parameters have to be estimated with caution. Instead of implementing similar renovation strategies to all buildings, it would be advisable to do a Life Cycle Cost assessment per renovation project to get insight in the efficiency of the renovation strategy in order to use the limited budget of social housing companies more effectively.