The Financial Analysis of the Energy Efficiency of Buildings - Social costbenefit analysis

Abstract

Energy efficiency is the focus point of European Union’s Europe 2020 Strategy for smart, sustainable and inclusive growth. Buildings are the central of EU’s policy, because nearly 40% of energy consumption is in buildings. The full economic impact of an energy efficiency design decision is difficult to anticipate due to so many unknowns in how a proposed building will actually be constructed and operated. We have to treat buildings as a form of capital investment, where the best investment scenario is probably not intuitively obvious. There will be complex trade-offs between many factors. As with any investment, cost-benefit analysis (CBA) is appropriate. Cost-benefit analysis normally clarifies the trade-offs between first/initial costs and operating costs. In terms of community buildings it is called Social Cost-benefit analysis (SCBA).