DEGREE PROJECT
AI206X Master´s degree Building and Real Estate Economics
NAME OF TRACK
MASTER OF SCIENCE, 30 CREDITS, SECOND LEVEL STOCKHOLM, SWEDEN 2020
Environmental renovating solutions for Miljonprogrammet to reaching the EU 2030 climate and energy framework goals
Alexander Sjöling
Emil Marefat
Master of Science thesis
Title: Environmental renovating solutions for Miljonprogrammet to reaching the EU 2030 climate and energy framework goals
Authors: Alexander Sjöling and Emil Marefat Department: Building and real estate
Master Thesis number:TRITA-ABE-MBT-20570 Supervisor: Kerstin Annadotter and Andreas Fili
Keywords: EU2030, Miljonprogrammet, LCC, Renewable energy, Renovation strategy, Sustainability
Abstract
Climate change is one of the most severe threats that humanity is facing right now; it's ironically a threat that we as humans created ourselves. Residential buildings are the fourth largest source of Green-house gases in the EU and account for 10% of the total Green-house gases. In the summer of 2019, the EU committee approved the new EU2030 climate and energy framework to reduce greenhouse gas emissions and increase renewable energy usage. A big problem for Stockholm are buildings constructed during the Miljonprogrammet, which ranged from 1964-1975 and have not had renovations since their construction.
According to our study, companies are working hard to achieve climate and sustainability regulations set by the municipality, which in turn are highly correlated with the EU2030's climate and energy
framework. The renovation strategy analysis showed that there is no perfect way or golden strategy to renovate the millionprogram buildings as the projects properties differ and require project-specific strategies. The recommendation is to find the most optimal amount of insulation for the building, to insulate just to reach the EU 2030 goals is not an optimal solution from an investment standpoint. One significant problem we found when analyzing the renewable energy systems was the law that makes energy transfer between buildings illegal. We found that many companies have problems making an investment in solar energy profitable because of the low prices of selling back excess energy to the cities powergrid. According to the interviews, lifting the energy distribution law would make it easier for companies to make solar investment profitable. Furthermore, we found that residential energy storage is not profitable from a price to efficiency standpoint. A lift of the energy distribution law would open new opportunities for companies to experiment with residential energy storage where more than one building is connected to the same storage unit.
Keywords: EU2030, Miljonprogrammet, LCC, Renewable energy, Renovation strategy, Sustainability
Acknowledgement
This thesis was carried out in the spring of 2020 for the Department of Real Estate and Construction management, Royal Institute of Technology.
We would like to thank our supervisor Andreas Fili and Kerstin Annadotter for good guidance and support during the work.
We would also like to thank the participating companies and all the contact persons for taking the time to participate in this study. The participating companies and the contact persons where:
Uppsalahem - Tomas Nordqvist and Monica Axelsson Svenska Bostäder - Jörgen Holmqvist
Stockholmshem
With this degree project, we both finish our studies at the Royal Institute of Technology, Civil engineering.
Stockholm, June 2020
Emil Marefat & Alexander Sjöling
Examensarbete
Titel: Miljörenoveringslösningar för miljonprogrammet för att uppnå EU:s 2030 klimat- och energiramverk och mål.
Författare: Alexander Sjöling och Emil Marefat Institution: Fastigheter och byggande
Examensarbete Master nivå: TRITA-ABE-MBT-20570 Handledare: Kerstin Annadotter och Andreas Fili
Nyckelord: EU2030, Miljonprogrammet, LCC, Förnybar energi, Renoveringsstrategi, Hållbarhet
Sammanfattning
Klimatförändringar är ett av de allvarligaste hoten som mänskligheten står inför just nu; Det är ironiskt nog ett hot som vi som människor skapade oss själva. Bostadshus är den fjärde största källan till växthusgaser i EU och står för 10% av de totala växthusgaserna. Sommaren 2019 godkände EU- kommittén det nya EU2030-klimat- och energiramverket för att minska utsläppet av växthusgaser och öka användningen av förnybar energi. Ett stort problem för Stockholm är byggnader som byggdes under Miljonprogrammet, som sträckte sig från 1964-1975 som inte har renoverats sedan deras byggande.
Enligt vår studie arbetar företag hårt för att uppnå klimat- och hållbarhetsbestämmelser som fastställts av kommunen som i sin tur är högt korrelerade med EU2030:s klimat- och energiramverk. Analysen av renoveringsstrategierna visar att det inte finns något perfekt sätt eller gyllene strategi att renovera
Miljonprogram-byggnaderna då projektets egenskaper skiljer sig åt och kräver projektspecifika strategier.
Rekommendationen är att hitta den mest ekonomiskt optimala isoleringsmängden, att isolera bara för att nå EU 2030-målen är inte en optimal lösning ur investeringssynpunkt. Ett viktigt problem som vi fann när vi analyserade systemen för förnybara energikällor var lagen som kriminaliserar energiöverföring mellan byggnader. Vi fann att många företag har problem med att göra investeringar i solenergi lönsam på grund av de låga priserna på att sälja tillbaka överskottsenergi till nätet, enligt intervjuerna skulle upphävandet av energidistributionslagen göra det lättare för företag att göra solcellsinvesteringen lönsam. Dessutom fann vi att energilagring för bostäder inte är lönsamt ur ett pris till effektivitetssynpunkt, en upphävning av energidistributionslagen skulle också öppna nya möjligheter för företag att experimentera med energilagring för bostäder där mer än en byggnad är ansluten till samma lagringsenhet.
Nyckelord: EU2030, Miljonprogrammet, LCC, Förnybar energi, Renoveringsstrategi, Hållbarhet
Förord
Detta examensarbete har utförts under våren 2020 för institutionen för fastigheter och byggande, Kungliga Tekniska Högskola.
Vi vill tacka vår handledare Andreas Fili och Kerstin Annadotter för god vägledning och stöd under arbetets gång.
Vi vill även tacka de medverkande företagen och samtliga kontaktpersoner för att ni tagit er tid att medverka i denna studie. De medverkande företagen och kontaktpersonerna är:
Uppsalahem - Tomas Nordqvist och Monica Axelsson Svenska Bostäder - Jörgen Holmqvist
Stockholmshem
Med detta examensarbete avslutar vi båda våra studier vid Kungliga Tekniska Högskola, samhällsbyggnad.
Stockholm, juni 2020
Emil Marefat & Alexander Sjöling
1. Introduction 1
1.1 Background 1
1.2 Purpose 3
1.3 Methodology 3
1.3.1 Life cycle assessment 3
1.3.2 Interview 5
1.3.2.1 Uppsalahem 5
1.3.2.2 Svenska Bostäder 6
1.3.2.3 Stockholmshem 6
1.3.2.4 Interview questions 6
1.3 Disposition 7
1.4 Limitations 7
1.5 Contribution of the study 8
2. Literature study 10
2.1 EU2030 climate and energy framework 10
2.2 Sustainability 11
2.3 Energy and sources 13
2.3.1 Electricity usage in Sweden 13
2.3.3 Renewable energy 15
2.3.4 Renewable and advanced energy technologies 16
Solar energy 16
Wind energy 17
2.3.5 Cost of installing and maintaining renewable energy Technologies 18
Solar panels 19
Small wind Turbines 19
2.3.6 Cost of energy storage 20
2.4 Renovation strategies 21
2.4.1 Thermal transmittance 21
2.4.2 Energy cost calculation 22
2.4.3 Renovation alternative cost 23
2.4.4 Payback period 24
2.5 Swedish housing market 25
2.5.1 Macroeconomy 25
2.5.2 Apartment building market prices 26
2.5.3 Shortage of housing 27
2.5.4 Ability to pay by the tenants of miljonprogrammet 27
3. Result and analysis 29
3.1 LCC analysis - Renovation 29
3.1.1 Neutral case 30
3.1.2 Pessimistic 32
3.1.3 Optimistic 34
3.2 Analysis of Solar power energy system 36
3.2.2 Pessimistic 37
3.2.3 Optimistic 37
3.3 Interview 39
3.3.1 Uppsalahem 40
3.3.2 Svenska Bostäder 41
3.3.3 Stockholmshem 42
4. Discussion 44
4.1 LCC analysis - Optimal renovation strategies 44
4.1.1 Incentives to renovate better than existing standard 45 4.1.1 Issues with the feasibility of the LCC-analysis in a practical scenario 46
4.1.2 Issues with LCC-method 47
4.2 Renewable energy sources 47
4.2.1 Future of solar energy 47
4.2.2 Future of small wind turbines for residential use 48
4.2.3 Future of energy storage 48
4.2.4 Future strategies for renewable energy 49
1. Introduction
1.1 Background
After the Second World War, an industrial society bloomed in Sweden, causing labor migration.
The migration originated mainly from other Nordic countries and from different European countries until 1970. During the 1980, migration changed from mostly European countries to other countries affected by war (Lindén, 1991). During the period from 1950 to 1960, the main goal in housing politics was to build more residential housing to reduce overcrowding in the city. These politics caused a building program called “Miljonprogrammet” that ranged from 1964 to 1975 (Warfvinge, 2008). The politicians' plan for the program faded as several apartments were vacated and
developed into socio-economically segregated neighborhoods (Magnusson, 2008). Nowadays, these apartments are a major contributor to the 40% energy consumption that the Swedish real estate sector accounts for, and a big part of the green-house gas emission(Balaras et al.,2007).
Climate change is one of the most severe threats that humanity is facing right now; it is ironically a threat that we as humans created ourselves. The total concentration of green-house gases in the atmosphere have increased dramatically since 1750, where carbon dioxide is the most predominant green-house gas by volume. Carbon dioxide emissions from fossil fuel combustion, in conjunction with that emitted from cement manufacture, account for more than 75% of the increase in the global atmosphere since 1750 (Solomon et al., 2007). In July 2019 the EU leaders approved the new energy and climate framework to reduce emissions from 2021-2030 by 40% (EU commission, 2019). This implies changes to the real estate and construction sector, one of the biggest contributors to the emission of carbon dioxide.
Due to general increased interest and knowledge about sustainable development within the real estate industry, focus on issues regarding construction logistics and material has been more relevant.
This has caused some real estate companies to adapt their strategies on how to offer more sustainable properties to the market. By adjusting or adapting a new sustainability strategy, real estate companies can receive both financial (Ex. tax benefits) and non- financial (ex. publicity) values (World Econ, 2016). At the moment, property owners have different strategies for making renovation in rental apartments, one of the systems is based on a 3 stages system where the tenants
get to choose how much extra they are willing to pay for different renovation stages. The stages are divided into mini, midi ,and maxi where mini implies plumbing replacement, renovation of the bathroom, replacement of electricity and ventilation systems. Stage midi includes the kitchen renovation and maxi is a renovation of the interior aesthetics like wallpaper (Lind et al., 2016).
Corporate social responsibility, CSR, is the responsibility of the impact on society a corporation has. CSR has two meanings: One of them is a general name for any corporation theory that
emphasizes the responsibility of making money and the responsibility of ethically interacting with the surrounding community (Brusseau, 2012). CSR theories are mainly adopted from several academic disciplines including the stakeholder theory, the agency theory, the legitimacy theory, reputation building, moral obligation, and sustainability (Chiang et al., 2019). Secondly, CSR is also a specific concept of this responsibility to profit while at the same time playing a broad role in community welfare questions. According to Brusseau (2012), CSR is composed of four obligations:
1. Economic responsibility - is to make money and it is the business version of human survival instinct. 2. Legal responsibility - is to adhere to regulations and rules. 3. Ethical responsibility - is to do what is ethically right, even if it is not required by law or by any other forces. 4. Philanthropic responsibility - is by contributing to societys’ projects even if they are independent of the particular business. The four obligations are usually taken in order from top to bottom.
Companies have different motives for why they work with sustainability, and they proceed in different ways and phases in their sustainability work. Their work can be due to new laws and regulations that force the company to adapt its operations and constitute an environmental policy based on the new conditions. Another motivating factor for a corporation to develop a sustainability strategy is the realization that the work with sustainability issues creates competitive advantages.
Methods like life-cycle analysis and more efficient resource consumption can reduce the companys’
costs and environmental impact. The third motive is that businesses see a clear connection between sustainability and long-term economic growth. In the final phase, the company integrates fully into the organizations’ economic, ecological, and social factors and all investments and decisions
(Epstein, 2018). Focusing on sustainability issues must permeate the strategy and decision-making of the organization at all levels. It also has to be possible to identify, measure, and report on the environmental impact of the product. An effective sustainability plan should represent the companies mission to influence the corporate culture so that all parts of the company aim for the same sustainability target (Bonn, 2011)
1.2 Purpose
The purpose of this paper is dividend in three main questions:
● What are the requirements when renovating miljonprogram buildings to reach the EU2030 energy and climate framework goals1?
○ What type of difficulties do occur in a practical scenario?
● How are companies planning to work, to reach the EU2030 energy and climate framework?
● How will future technology, and strategies change the economic efficiency of renewable energy in the real estate sector
1.3 Methodology
In this chapter, the information and data gathering techniques are explained and discussed to highlight why the specific methods have been chosen over others. Moreover, this chapter describes how the gathered information and data are analyzed and gives a brief explanation of how the different analyzing tools work.
1.3.1 Life cycle assessment
Life cycle assessments (LCA) is a collective concept for different methods to describe the overall potential environmental impact of a product. The assessments are useful when it is relevant to identify different alternatives to improve the environment when developing a project or a product.
However, the LCA does not assess a single object; it is more a method to identify different
alternatives that achieve the same goal. Life cycle assessments are often used as an appendix during public decisions as in development projects and public procurements (PS näringsliv, 2008).
1 At Least 32% renewable energy and at least 32.5% in energy efficiency
Life cycle cost (LCC) analysis is similar to the LCA, with more focus on the monetary costs of the product or project. In the report by Almedia (2016) et. al. one of their methods is to analyze life cycle costs (LCC). They divided the making of an LCC analysis in four different steps:
1. Calculation of the energy use of a reference building,
2. Establishment of different scenarios involving the renovation of the building, 3. Calculation of the energy use after the renovation alternatives have been done, 4. Calculation of the associated costs of each renovation scenario.
We will conduct two different LCC analyzes, one to calculate alternatives for energy efficiency and one for renewable energy. The LCC analysis for energy efficiency will consist of 3 alternatives:
1. Alternative 1- No change in the building
2. Alternative 2 - Additional insulation roof and walls + the most affordable window solution to reach EU2030 goals (energy efficiency of 32,5 percent)
3. Alternative 3 - Use the most economically efficient insulation amount and most optimal window solution.
For the renewable energy sources, we have chosen two different goal with three different scenarios:
Goals:
1. Reach EU2030 goal of 32.5% renewable energy
2. Install enough to make the building 100% power by renewable energy
Before conducting the LCC, we need to have input values consisting of.
● Discount rate
● Inflation
● Real rate (Calculation in appendix X)
● Energy Price changes
● Effective interest rate energy (real rate minus the energy price changes)
● Calculation period
● Cost of the investment, including the product cost and the work cost
● Maintenance cost
● Reparation cost
● Yearly energy cost
Salvage value will not be calculated or taken in consideration as the calculation period will correspond to the life length of the alternatives.
1.3.2 Interview
To get a real-life point of view three semi-structured interviews (Whiting, 2008) will be conducted with construction companies involved in the renovation and maintenance of miljonprogrammet apartment buildings. The interview structure is based on a couple of open-end questions that can be elaborated on if needed and will give a descriptive answer. This interview structure, in particular, is chosen to get a broad and descriptive answer on a specific topic. It will integrate the interviewees’
point of view on the subject and the reliability of the information the interview structure brings. The information gathered from the interviews are then transcripted and analyzed (Flick et al., 2004).
This will give an insight into the companies renovation strategies and an estimation of what extra cost will be added to the process due to the new regulations from the EU2030 climate and energy framework. The interviews will also give an insight into how common and essential new solutions for renewable energy will be in the real estate sector and how they think about renewable energy systems in development at this time. In total there are three interviews where one is with two representatives from Uppsalahem, one from Svenska bostäder and one from Stockholmhem.
1.3.2.1 Uppsalahem
● Tomas Nordqvist Energy- and Project manager for energy initiative
● Monica Axelsson Property strategist
Tomas Nordqvist started working at Uppsalahem in 2011 and works as an Energy- and project manager for the company´s energy initiatives. He plays the leading role in the company’s energy strategies, with a background as an energy engineer and ten years of experience as a consultant for different companies.
Monica started working at Uppsalahem around 1.5 years ago and works as a property strategist; her job involves finding new strategies for renovating and new production as well as the sale of
properties.
1.3.2.2 Svenska Bostäder
● Jörgen Holmqvist Property Development manager
Jörgen Holmqvist started working at Svenska Bostäder in 2003 and has worked in different departments inside the company. He has a background in the company's renovation and procurement department. He now works as the property development manager, where his
department focuses on new production, renovation, purchasing business, energy, and environmental sustainability, and project development in the early phases.
1.3.2.3 Stockholmshem
● Interviewee chose to stay anonymous. In the text the person will be referred as “Sven”
Sven has worked at Stockholmshem for three years and worked for the city’s real estate office before that. Furthermore, background at the construction company Skanska where Sven worked for ten years, with sustainability and environmental questions within the real estate and construction sector, with an overall experience of 15 years in the industry.
1.3.2.4 Interview questions
● How long have you worked in the industry?
● What is your job description and how long have you worked with that?
● What strategy are you using right now when renovating miljonprogrammet?
● Did you change your renovation strategies after the EU2030 regulations were announced, if yes how have you changed them?
● Are you working to achieve Net zero energy buildings?
● According to your view and the view of the company which renewable energy sources
● Are you working with an energy program for each specific property or are you working with an annual energy program?
○ Which energy saving measure are you most prone to do ( installation of additional wall insulation, change of windows,...)
● How often do you as a company update your strategies with respect to all the innovations that are coming to market?
● Does the energy program and renovation strategy differ for miljonprogrammet compared to other properties?
● What is the most important factor when you are renovating the supplier, the tenants or to find the best technical solution?
Moreover, reliability, validity, and generalizability will be discussed to ensure the work’s usefulness and credibility. It is also important that the findings add to new insights to already performed
research, as well as keeping a high-level standard scientifically and that it can contribute to future work within this field.
1.3 Disposition
The disposition of the thesis will be in the following manner:
● Introduction - the chapter describes the background to the origin and purpose of the report, methodology and delimits
● Literature studies - The essential theory is dealt with which should form the basis of the analysis of the study. Previous reports and studies are being processed to get a picture of how things have turned out in previous years.
● Result - The chapter is based on the methods outcome
● Discussion and conclusion - The result is discussed with the theory as a basis and the results of the literature study, interviews and strategies are analyzed.
1.4 Limitations
This study focuses on apartments built during 1964-1975 that were part of the miljonprogrammet and did not have any major energy efficiency renovations done.
When analysing renewable energy systems and renovation strategies, only systems and strategies that exist during the time this paper is written will be integrated into the LCA and LCC analysis. Experimental systems that are not yet available for global use will be analyzed theoretically in the discussion due to the uncertainty of the cost, maintenance, and live cycle of the newly developed products. However, the interviews will contribute to the discussion regarding future technology as the questions concerning renewable energy will give an insight into some of the issues companies are facing right now when planning an investment into renewable energy .
The interviews are based on companies connected to Allmännyttan (Public utility) that is municipality owned housing companies throughout Sweden with the task of providing sustainable and affordable housing for everyone. Therefore, our discussion regarding companies working toward the EU2030 framework is more about how companies connected to Allmännyttan work toward the goals. We believe that the results give us enough information to draw a conclusion concerning companies connected to Allmännyttan.
Our process of gathering interviewees was during the outbreak of the COVID-19 virus, which left us with canceled interviews and lower rates of response. This affected mostly our report by making it from a broader result to a more narrow focus on companies connected to Allmännyttan. Therefore, the direct effect was that we did not have enough interviews to explain how the overall construction market has adjusted to EU2030 frameworks.
1.5 Contribution of the study
The study aims to contribute to earlier studies on renovation strategies of the Miljonprogrammet apartment-buildings, with an increasing focus on environmental sustainable renovation tactics and renewable energy sources to help reach the EU2030 energy and climate goals. The study also discusses the difficulties of a general renovation strategy and the feasibility in a practical scenario. Strategies for making renewable energy economically profitable will be presented and discussed. One major problem
to the renewable energy market will be discussed to highlight changes that can make it easier to make the investment into renewable energy profitable.
2. Literature study
In this chapter we present previous research on renewable energy systems, the housing market in Sweden, renovation strategies and sustainability related to the topic of this paper
2.1 EU2030 climate and energy framework
The 2030 climate and energy framework includes EU-wide targets and policy objectives for the period of 2021-2030, where the key target will be a 40% cut in the emission of green-house gases from 1990 levels. It also includes a goal of at least 32% renewable energy and at least 32.5% in energy efficiency (EU commission, 2019).
Sweden has always been one of the leading countries when it comes to reducing the emission of carbon dioxide, from 2003 to 2018 the level of emission in Sweden sunk from 64 to 44.8 (Million Metric tons)(Sönnichsen, 2020). One of the biggest contributors to the emission of carbon dioxide is the real estate and construction sector that accounted for an average of 10 Million Tones every year (Byggindustrier, 2014). To achieve the goal of a 40% reduction in green-house gas emissions from the 1990 level, the country of Sweden has to reach an emissions level of 36.4 (Million Metric tons).
Buildings are a significant source of pollution, not only during the construction face but especially during the usage of the building. In the year 2002, the emission of carbon dioxide originating from electricity and heat production accounted for 39% of the EU`s total. Residential buildings are the fourth largest source of green-house gases in the EU and account for 10% of the total green-house gases (EEA 2014). Depending on the basis of electricity and thermal energy, buildings account for more than a third of the total energy-related carbon dioxide emissions (IPCC, 2001). To minimize the impact electricity and heat production have on the carbon dioxide emission two solutions can be found: firstly, decreasing the amount of energy used by a building and secondly using renewable energy sources. The first solution implies isolating the buildings more to minimize energy loss. The presented solutions are insulation of external walls, weatherproofing of openings, installation of
2.2 Sustainability
Sustainability is often defined as a balanced intersection between environmental, social and economic dimensions. Recently four new dimensions have been added to the sustainability definition; these are cultural, political, ethical, and institutional (Doan et al., 2017). However, no substantial progress towards more sustainable societies can be found on a global scale. According to Lobo (2019), progress towards more sustainable societies are through higher education. The
education will provide the necessary knowledge about the importance of balancing the
environmental, economic, and social costs and benefits. The demand for the consumer has been closely linked to supply, process, quality, and price. The extent to which green buildings will grow is closely related to the consumer demand (Häkkinen and Belloni, 2011). Given the cost
consequences, consumers and the public are likely to be motivated to follow green building policies if they are adequately informed and educated about all the benefits of such an action (Abidin and Powmya, 2014).
Strong evidence has been found that stakeholders need to get motivated to act sustainably. To act sustainably, stakeholders have different compelling motivators such as government regulations and policies (Murtagh et al., 2016). In addition to legislative proposals and local authorities several countries and cities provide incentive programs to attract more stakeholders to get involved in the planning of green buildings (Olubunmi et al., 2016). An example is the Eco-roof incentive program in Toronto which grants for green roofs (Toronto, n.d). However, green building projects often lack financial feasibility for other key stakeholders, particularly in the private sector, the initial cost is an obstacle to the growth of green building for the private sector (Sentman et al., 2008).
The construction of a new building or neighborhood usually is something to remember since a building is constructed to stand for at least 50 to 100 years. This highlights that to reach the EU's 2030 goals, the solution must mainly come from renovating the existing supply on the market (Balaras et al., 2007). A lot of focus is now on the buildings constructed during the
“miljonprogrammet” that ranged from 1964 to 1975 (Warfvinge 2008). The need to renovate these buildings is not a new problem, and a lot of different papers have been written on the issue. Still, the most troubling issue is the fact that these neighborhoods have also been developed into ethnically segregated neighborhoods (Magnusson, 2008). The energy savings that can be achieved by
renovating the miljonprogrammet are discussed by Warfvinge (2008). The presented renovations by
Warfvinge all imply rent increases, which are a major problem for the residents of the
miljonprogram apartments. If the apartments of the miljonprogrammet were to be renovated, the increase in rent will force most of the families living in these neighborhoods to move, which discourages investors from helping finance the renovations (Säll, 2011).
These renovations have to be aligned with the economic sustainability goals real estate companies have. Plans for economically sustainable renovation projects are to prolong the use of the existing resources, maintaining real estate value, and safeguard the affordability of dwellings (Botta, 2005).
However, housing companies do not only try not to lose money on renovation projects as they often have an expected rate of return on the investments they make to assess if the investment is
economically beneficial (Olsson et al., 2015). The way housing companies function with calculating renovation projects with a rate of return higher than 0% is not news and is encouraged. The current legislation in Sweden concerning municipal housing companies encourages the companies to act in a “business-like way”. The interpretation of “business-like way” is that companies should act when the investments show a positive rate of return (Bröchner et al., 2015). However, this can be
problematic, as explained in Almeida et al. (2015). The authors explain that the evaluation of renovations has to be seen from a different point of view to find the best solution in general. They concluded that real estate firms have to change their focus from just economic aspects as the most convenient solutions can be unique. Therefore, the solutions should be compared to find the best solution from a social and private perspective.
The growing interest in environmentally friendly buildings under recent years is undeniable.
Researchers have, under the years, adopted the terms ZEBs (zero energy buildings) and NZEBs (net-zero energy buildings). The term NZEBs refers to buildings connected to the energy
infrastructure, where there is a balance between the energy the building is using and the energy that the building is producing and supplying to the energy grid under a specific time period (usually one year). ZEBs are buildings that are built to be operated independently from the city's power grid;
ZEBs usually include autonomous buildings. (Li et al ., 2013)
2.3 Energy and sources
2.3.1 Electricity usage in Sweden
Nuclear power plants and hydro plants produce the majority of electricity in Sweden. However, an estimated 50 percent of the electricity is generated from renewable sources. The three major sources generating renewable energy are hydropower, solar power, and wind power. The total amount of electricity produced in Sweden, 2018, was 159 700 GWh. Of the total amount of electricity produced, 27% is used by Swedish households (SCB, 2018).
Operational use, i.e., real estate and service sector operational use, is influenced mainly by GDP, which is the economic development. The GDP is expected to increase, which affects the need for premises and increases the number of appliances used. Over time, the industrial use of electricity correlated with the growth of the economy as new devices are adapted. In the report deducted by North European Power Perspective, a reference case shows that the economic development in Sweden is projected to be relatively good until 2050 and thus indicate higher use of electricity.
(NEPP, 2015).
Figure 1. Reference scenario of electricity usage (IVA, 2015) for highest level (black interfered line), high scenario (blue line), reference scenario (green line), low scenario (red line), lowest level (black interfered line) and historically (black line)
The household electricity has increased according to Swedish statistics, in the last four years. The price in the statistics show the price of electricity, grid, electricity certificate, electricity tax, and VAT calculated in kWh. The difference between the lines in figure 2, is that the blue one shows electricity prices for smaller apartments with an annual consumption of 1000-2499 kWh and larger apartments an annual consumption of 2500-4999 kWh (SCB, 2020).
Figure 2. Graf of electricity prices for small apartments (blue line) and larger apartments (orange line) (SCB,2020)
Fluctuations in electricity prices can be an effect of conversion to renewable energy. The conversion to a 100 percent renewable energy-based power system is likely to contain a large amount of
electricity from unexpected production; high prices correlated with the heavy use of energy in the past. With more renewable energy sources, high prices will be related to both high electricity demand and low production. In a case with minimal use and low output production, the electricity prices can be high as the output is low. This causes a general problem as the energy sources have to be adjusted in a manner to achieve a balance in electricity production and usage (Konsumenternas energimarknadsbyrå, 2020).
2.3.2 Energy source
Electricity is not the main energy provider for multi-dwelling buildings. According to
Energimyndigheten, the majority of the energy is provided by district heating with an estimated 80%. The second biggest energy source is district heating combined with mainly air-water pumps (Statens energimyndighet, 2017).
Energy Companies in Sweden have developed price statistics for district heating prices from 2009- 2019. The overall price increase for smaller apartment buildings from 2018 to 2019 is 0.7% and 1.2% for larger apartment buildings (Energiföretagen, 2020).
Figure 3. Graf of district heating energy price development for houses (blue), small (pink) and large (orange) apartment buildings (Energiföretagen, 2020)
The district heating mentioned earlier provides hot water to properties from a heating plant. The water is distributed under high pressure in a well-insulated pipe system connected to households in a larger area. The water is kept between 70 and 120 degrees with regards to the season and weather and is distributed to different properties central heating system. In the heating centers, the heat exchanger utilizes the hot water in which it heats radiators and the tap water. However, the water that flows into the district heating center in the property is not the same as heating exchangers used in the apartments. Once the water turns cold in the heat exchanger, the water returns to the district heating plant (Vattenfall, 2020).
2.3.3 Renewable energy
During the 1970s, the relationship between energy and economics was a major priority; during this time, the correlation between energy and the environment did not receive. It was during the 1980s that environmental concerns such as acid rain, ozone depletion, and global climate change started to gain public knowledge and concern (Brulle et al 2012). After the link between energy and the environment gained attention, it became more clear that energy production, transformation and transport, have an impact on the earth's environment. Researchers found that the environmental impacts are closely associated with the thermal, chemical, and nuclear emissions, which are a necessary consequence of the processes that provide significant benefits to humanity. This conclusion sparked a new era that highlighted the importance of the earth's environment; many researchers and companies have now devoted themselves to developing methods for achieving sustainable development. Some solutions to the environmental problems that are being used are recycling, materials substitution, application of carbon and/or fuel taxes, promoting public
transportation, and better education on the subject, etc. During the last decades, more and more potential solutions to energy-related environmental concerns have evolved: increasing energy efficiency, alternative energy forms and sources of transport, use of renewable and advanced energy technologies, usage and more efficient energy storage (Dincer, 2013)
2.3.4 Renewable and advanced energy technologies
Renewable energy technologies have become widely spread, and most of the population will know one or more renewable energy technologies, whether it is solar, wind, or water generated energy.
Renewable energy is also often referred to as clean energy that comes from natural sources or processes that are constantly and naturally occurring (Gupta et al., 2010).
Solar energy
The use of solar energy has been known to humans for many thousands of years, and it has been used to grow crops, stay warm, dry food, and much more (EnergySage, 2018). According to studies by the National Renewable energy Laboratory (2019) they found that more energy from the sun falls on the earth in one hour than is used by everyone in the world in one year. Nowadays, the use of solar energy has expanded and is used for things like heating homes and businesses, heating water, powering electronic devices, and many more. The importance of solar energy is undeniable but to convert the solar energy into electric energy a solar panel is needed (Lumb et al., 2017). The first solar panel for commercial purpose was invented in 1954 by Bell Labs. By 1960 Hoffman Electric achieved a 14% efficiency in photovoltaic cells (Spanggaard et al., 2004). We have come a long way since then, and breakthroughs happen every day. In July 2017, a group of scientists developed a solar cell that was able to reach an efficiency of 44,5% (Lumb et al., 2017). The solar cell is set up with different layers that manage to extract energy from sunlight at different
wavelengths. They are able to convert energy from long-wavelength photons that are usually lost in standard solar cells that are widely available to the public (Lumb et al., 2017)
Solar energy is generated with a solar panel; this is done by using photovoltaic cells that absorb the
Figure 4. How solar panels generate electricity from sunlight. Taken from (https://us.sunpower.com/solar- array-definition, 2020)
To calculate the annual energy output of a photovoltaic (PV) solar panel installation, the global formula is:
𝐸 = 𝐴 × 𝑟 × 𝐻 × 𝑃𝑅
Where A is the total solar panel area (𝑚!), r is the solar panel yield or efficiency(%), H the annual average solar radiation on tilted panels (excluding shadings), PR is the performance ratio and E the total energy produced (kWh)( Photovoltaic-software, 2020)
Wind energy
The wind has, for many centuries, been used to power machines. It was even used during the bronze age, where it was used for sailboats. The first use of wind energy turned into electricity was in 1888 when Charles F. Brush invented the first wind turbine, and it was able to generate 12 kilowatts of power (Schaffarczyk, A. 2014). During the last couple of decades, the interest in wind energy has grown dramatically. This is mostly due to the increased awareness of greenhouse gas emissions from other sources of energy and the low price of wind energy compared to the environment
damaging energy sources. Innovations and system optimization that have occurred have also helped increase the popularity of wind energy (Schaffarczyk, A. 2014). Nowadays, wind energy has
become widely known that almost everybody knows what a wind turbine is when they see one. A modern wind turbine can generate energy with a 35-45% efficiency (Kinhal, 2014).
Figure 5. Short illustration of the different components that go into a small scale wind turbine system. Taken from (http://protorit.blogspot.com/2011/06/wind-turbines-types-and-components.html, 2006)
The way wind turbines generate power is by having the wind get the rotators/blades to start turning;
the turning motion of the rotator head will activate the turbine inside, which will generate power due to the constant movement of the rotators. The efficiency of a wind turbine is calculated with the relationship between wind speed, power, and range of operation of the turbine; the result is usually viewed in a power curve. For micro/small wind turbines the power curve is calculated using the formula shown below where P is the power (W), ρ the density of air, A the rotor area, V the wind speed and Cp is the coefficient of power (Bahaj et al. 2007).
𝐶𝑝 = 𝑝 0.5𝑝𝑉!𝐴
2.3.5 Cost of installing and maintaining renewable energy Technologies
The cost of a renewable energy system has changed drastically during the last decades, here we explain the decline in hardware cost, installation, and maintenance cost. We also highlight the
Solar panels
When solar panels first emerged during the 1980s on the consumer market, mainly the US market, the price of installation and maintenance were extremely high due to limited supply and high production cost. During that time, low natural oil prices from the middle east made a investment into solar energy a long time investment with the risk of never breaking even. This all changed in 2008 when the supply of solar panels exploded as new manufacturing capacity was built, the total system cost declined by 80% from the year 2008 to 2012 as a result of falling module prices. Soft costs like marketing, customer acquisition, design, installation, permitting, and inspection also declined rapidly in Europe, particularly due to supply from china and strong feed-in tariff incentives (Fraas, L.M. 2014). As shown in figure 6 the price of PV solar systems has been steady and on an almost constant decline since 2013, where the price for small roof-mounted commercial systems was 12.3 SEK/Wp and 11.6 SEK/Wp for larger roof-mounted commercial systems in 2016. The lifespan of a solar panel is estimated to be between 25-35 years (Richardson, L 2019).
Figure 6 . Historic development of the weighted average prices for turnkey photovoltaic systems (excluding VAT), reported by Swedish installation companies (National Survey Report of PV Power Applications in Sweden, 2018).
Small wind Turbines
When it comes to micro-scale/small wind turbines, one of the leading countries is the UK driven by advances in device design, increasing energy prices and the financial incentives offered to aid their uptake in buildings. Micro wind turbine developers realized early that units must be self-contained,
requiring little to no input from the consumer. Self-contained devices were already available in the UK by mid-2006 (Bahaj et al. 2007). The cost for a small wind turbine is composed of the
investment cost and the annual cost. The investment cost consists of purchasing the wind turbine, foundation, connection fee for the electric grid and permits. Moreover, the annual cost consists of cost of capital, operation and maintenance, insurance, administration, and tenancy cost
(Thorstensson, 2009). To show the investment cost for a residential small wind turbine, four turbine models have been chosen: Energy Ball v200, Hannevind 2,2, Windon 2kW and, Betek P 1000. The different parameters are shown in table 1.
Table 1. Technical specifications and costs for four different small scaled wind turbines (Thorstensson, 2009)
Energy Ball
v200 Hannevind
2,2 Windon 2kW Betek P 1000
Designed power (kW) 2.25 2,2 2 1
Rotor diameter (m) 1.98 3,5 3,2 1,8
Annual production (kWh)
1 800 3 000-5 000 8 000 na
Average wind speed (m/s)
7 5-6 7 na
Investment cost (SEK) 89 000 54 600 57 000 40 000
Note Tower
excluded
VAT excluded
The cost shown above only concerns the investment cost, this means that the price will increase due to operation and maintenance, insurance, administration, and tenancy cost. The lifespan of a small scale wind turbine is estimated to be between 20-25 years (Rolling. M 2018).
2.3.6 Cost of energy storage
city's power grid to funnel back the excess energy. Innovations and discoveries in the field of energy storage, in particular, lithium-ion batteries have made it possible for residential buildings to install energy storage batteries in their building to save the excess energy instead of selling it back to the cities grid (Vieira et al 2017). The leading company in residential batteries is Tesla with its Powerwall that was introduced in 2015 and is described by tesla as a “rechargeable lithium-ion battery with liquid thermal control”. The starting price for one powerwall unit is SEK 79 800 without the installation cost and for additional hardware to support the unit. The supporting
hardware and other installations are estimated to be an additional SEK 10 000-15 000 depending on the electrical setup. An estimation of the cost of a fully installed powerwall is between SEK 96 000- 156 000 (Marsh, 2020). One unit has a usable capacity of 13,5kwh and an efficiency of 90% in and out effect. One powerwall can store enough energy for a three bedroom apartment and can be scaled up to a max of 135kwh by adding nine additional powerwall units (Tesla. 2020). The powerwall comes with a 10-year warranty by tesla that guarantees that the battery will maintain at least 70 percent of its capacity to hold a charge during that time period.
2.4 Renovation strategies
In more recent years, a shift in housing companies renovation strategies can be seen. They have changed from a priority of measures with a short payback time and renovations that give the possibility for rent increases to a strategy that puts more weight on holistic housing renovation approaches. A study conducted by Mjörnell et al. (2019) shows that sustainability and social responsibility are gaining importance in the public sector as well as in companies' renovation strategies. They also conclude that companies are moving away from extensive total renovations to more tenant-specific and step-by-step renovations. This usually still implies a rent increase for the tenants living there, where it is typical that the company increases rents by 10-20%. A study by Bo- analysis (2017) concludes that even with a smaller increase in rent of 5-10%, more than 25% of the current tenants would have to leave their homes.
2.4.1 Thermal transmittance
In the real estate sector, the heat transfer coefficient (U-value) is the standard indicator of the heat losses per square meter surface. The U-value differs for different materials as the structure varies depending on the material. 1 U-value is equal to 1 W loss per square meter per difference in the one degree inside and outside. In that manner, low U-values represent good insulating properties. Table 2, shows the U-values for different materials (Bellander et al., 2017).
Table 2.Material thermal conductivity and U-values (Bellander et al., 2017) Material Thickness (mm)(d) Thermal conductivity
(W/m, *K)(λ)
U-value (W/m^2,*K)
Brick (1500kg/m^3) 200 0,6 3,0
Solid concrete 200 1,7 8,5
Wood (pine) 200 0,14 0,7
Mineral Wool 200 0,038 0,19
2 glass window 3,0
3 glass window 1,1
2.4.2 Energy cost calculation
To calculate the cost of energy per square meter wall surface, the required values are U-values, degree hours, and energy price. In table 3, the calculations for the different values are displayed.
Table 3. Energy cost calculation and variables (Bellander et al., 2017)
Values Calculations
U (with additional
material) 𝑈 = 1/((1/𝑈𝑏𝑎𝑠) + (𝑑/𝜆)) , 𝑊/𝑚2𝐾
G= Degree hours, K*h per year (is a Constant
dependent on the location)
92 000˚h per year in Stockholm (appendix A1)
E= Energy price, SEK/kWh
Retrieved from Energy Companies Sweden (look at topic 2.3.2) 0,83 SEK/kWh = 0,00083 SEK/Wh
2.4.3 Renovation alternative cost
The cost of renovation alternatives differ for different competitors. In Table 4 the cost of the different alternatives are presented, which have been retrieved from a book with maintenance costs Repap Fact (2018). All of the alternatives are based on an exterior renovation, including the initial investment cost based on the square meter.
Table 4. Renovation alternatives for plaster and concrete facade (External insulation) (Repap fact, 2018)2 Work cost per square
meter (ex VAT)
Material price per square meter (ex VAT)
Total square meter price
Total renovation (inc door and windows renovations)
SEK 1 140 SEK 1 820 SEK 2 520
Total renovation (inc door and windows renovations) + additional insulation
SEK 1 300 1 820 + SEK 1,2 per mm insulation
3 120 + SEK 1,2 per mm insulation
Facade renovation (ex door and windows renovations)
SEK 800 SEK 540 SEK 1 340
Facade renovation + additional insulation
SEK 980 540 + SEK 1,2 per mm
insulation
1 520 + SEK 1,2 per mm insulation
2 The prices is based on concrete/plaster facade houses with 2 or higher stories with balcony
Table 5. Renovation alternatives for roof (External insulation) (Repap fact, 2018) Work cost per square
meter (ex VAT)
Material price per square meter (ex VAT)
Total square meter price
Roofing felt 1-layer covarage (SEP 5500)
SEK 67 SEK 118 SEK 185
Roofing felt + additional insulation
SEK 134 118 + SEK 2,1 per mm
insulation 252 + SEK 2,1 per mm insulation
Table 6. Renovation alternatives for windows (Repap fact, 2018) Work cost per square meter (ex VAT)
Material price per square meter (ex VAT)
Total square meter price
Adding additional glass on existing window (1.3 U-value) (Appendix A2)
SEK 900 (Estimation) SEK 500 (Estimation) SEK 1 400
Wood windows 3-glas multiple air (0,8 U-value)
SEK 1 130 SEK 6 570 SEK 7 700
Aluminium windows 3 glas multiple air (0,8 U-value)
SEK 1 310 SEK 9 390 SEK 10 700
2.4.4 Payback period
The payback period is calculated using the payback period formula where T is the payback period, G is the investment and a is the generated energy multiplied with the electricity price
Furthermore, the net present value formula is used to convert the future cash flows into the present value to calculate the investments profitability.
Net present value:
𝑁 = 𝑓! × 𝐴 𝑓! = 𝑞"−1 𝑟 × 𝑞"
Where N is the net present value, f is the capital factor, A is the annual revenue, q=1+r, r is the real rate of interest and n is the number of years.
Formula for calculating the annual capital cost is:
𝑎 =𝑟 × 𝑞"
𝑞"− 1
where q is 1+r, n is the depreciation time and r is the real rate of interest.
2.5 Swedish housing market
2.5.1 Macroeconomy
According to the Swedish Central Bank, the Swedish economy has staggered from a strong
conjunction to a more stable and balanced economy. The inflation rate goal is 2% and it is estimated to be achieved as it currently stands at 1,7%. To have stable inflation, the central bank of Sweden decided to keep the repo rent at 0 percent.
Moreover, growth in Sweden, compared to previous assessments, is expected to be slightly higher.
The Swedish government has announced in their Spring Budget that additional funds will be allocated to municipalities and regions, which ensures the public consumption will be somewhat stronger this year. The housing market has been strengthened as optimism has increased, and therefore, the forecast for investment in housing has been revised up (Riksbanken, 2020).
Furthermore, data derived from Datscha shows how the average yield for residential buildings has changed from year 2006 to 2019, where the average yield for B areas in the municipality of Stockholm is 3,50%, and C areas are 3,75%. The B area consists of the following areas: Farsta strand, Hässelby gård, Southside, and West Stockholm. Rågsved, Rinkeby-Tensta-Hjulsta, Skärholmen, and Skarpnäck are considered to be part of the C area within the municipality of Stockholm .
Figure 7. Average yield in Stockholm municipal B and C locations (Datscha, 2020)
2.5.2 Apartment building market prices
Sweden Statistics (2019) illustrates how the price trend from 1981 to 2018 has changed for
apartment buildings. The price level of 1981= 100 is presented as an index. The index for apartment buildings is based on three different categories with the codes 320, 321, and 325. The definition of these categories are:
● 320 - Rental unit, principal residential premises
● 321 - Rental unit, residential and commercial premises
● 325 - Rental unit, principal commercial premises
The index series has been calculated by analyzing the K/T values that indicate the coefficient of the purchase price. The K standard for the purchase price of the asset and T is the assessed value of a property, lot and building, done by the Swedish Tax Agency. The graph in figure 8 illustrates how the development of the consumer price index (CPI) has changed to demonstrate the gap between CPI and the rental unit index.
2.5.3 Shortage of housing
According to economic commentaries made by Katinic (2018), Stockholm has a noticeable deficit of housing and beds. In addition, some estimates suggest that there is a large surplus of households and beds considering the number of households and population growth. However, Riksbanken (2020) mentioned in the global assessment that it is difficult to define and quantify housing
shortages. Still, the study indicates that a large proportion of housing in Sweden that is not located in metropolitan areas have a smaller demand. This suggests the existence of a disparity between supply and demand, rather than actual housing shortfall.
Figure 9. County wise breakdown of the deficit calculated based on the 2016 housing stock (Katinic, 2018)
2.5.4 Ability to pay by the tenants of miljonprogrammet
In an article conducted by Sweden’s Statistical Office the occupants of tenant houses often are low- income households. In Sweden, 25 percent of the population live in tenant housing. However, the amount of households that live in rental apartments is dependent on where in Sweden they live and their households income. The income of the households can be divided into 4 quadrants where 1 is the low-income household and 4 the high-income as illustrated in table 7 (SCB, 2017).
Table 7. Disponible income of different quadrants (SCB, 2012) Income (SEK)
Quadrant 1 125 680 Quadrant 2 253 230 Quadrant 3 403 600 Quadrant 4 715 280
In metropolitan areas, a higher percentage of households live in rental apartments. Households with a disponible income in quadrant one housing differs markedly between metropolitan and rural areas.
In metropolitan areas 14 percent live in detached houses and nearly 60 percent live in rental housing. Compared with 50 percent live in detached houses and 40 percent in rental housing for neighborhoods outside of the metropolitan areas.
Figure 10. Form of housing in metropolitan areas for households in income group 1 (Quartile 1). Rental - Turquoise, Co-operative apartment - Light blue, Detached house - Green, Special residential - Purple (SCB,2017)
3. Result and analysis
In this chapter, the information and data gathered are presented and analyzed. The presented result and analysis will set a base for the discussion. The structure of this section is firstly a presentation of the renovation strategies in three different scenarios using an LCC calculation. Following is the result and analysis of renewable energy solutions. The third section a table with critical information about the interviewees and following with a summarized transcript from the interviews.
3.1 LCC analysis - Renovation
The results of the different LCC analyses have been divided into three scenarios. The scenario is changing intermittently with the variables presented in table 8 below. Furthermore, the LCC analysis span is 50 years and has specific U-values for the different construction elements. For the calculations, the U-values used is:
• Wall - 0.55 W/𝑚!*K
• Roof - 0,45 W/𝑚!*K
• Window - 2,4 W/𝑚!*K Table 8. Variable difference in scenarios
Pessimistic Neutral Optimistic Fluctuation
Discount rate 3% 6% 9% 3%
Inflation 3% 2% 1% 1%
Energi price change (excl.
inflation)
3% 2% 1% 1%
The values presented in the different cases are achieved from the general average of the U-values of a regular miljonprogrammet building. The building is based on being a four story with a facade of plaster or concrete-building with more or less than 25% balcony and windows of the facade. The equations change depending on the percentage of the windows to facade ratio. In the cases below, calculations are made with less than 25% window to facade ratio.
In the total cost, figure 11, there are three different alternatives. The first one illustrates the cost to renovate the building without changing the standard. The second staple visualizes how much the cost is to renovate the building to achieve the EU2030 framework's goal of 32,5 % energy efficiency . The third alternative illustrates the total cost when combining the most cost-effective solutions.
In figure 12 and 13, with roof and facade renovation, the staples illustrate the different cost per meter insulation installed. The orange-colored staple illustrates where the most cost-effective insulation amount is, and the grey staple illustrates the most expensive alternative. The most
effective insulation amount is decided by where the deepest valleys are in the figures. By increasing the insulation amount from the orange staple, the cost also increases as it is the lowest point of the valley. The first staple in the graphs indicates the cost of renovating without making standard changes.
3.1.1 Neutral case
The difference between the first and second staple is a 10% decrease in cost per square meter. The difference between standard renovation and most cost-efficient renovation is a 16% decrease in price per square meter.
Figure 11. Total cost different with three alternatives (neutral scenario)
In figure 12&13 it is observed that the lowest point is when the insulation thickness is at 0,165m,
Figure 12. Facade renovation with additional insulation (neutral case). Grey=highest cost, Orange=lowest cost
Figure 13. Roof renovation with additional insulation (neutral case). Grey=highest cost, Orange=lowest cost
In figure 14, the standard renovation alternative is not the most profitable from an LCC perspective.
The most profitable alternative is to add an insulation to the window that decreases the U-value of the window in total. The two other alternatives with three glass windows are not profitable.
Figure 14. Windows renovation alternatives in neutral scenario
3.1.2 Pessimistic
In the pessimistic scenario, the total cost per square meter illustrates the different total costs of three alternatives with high inflation, high energy cost, and low discount rate (table 8). The difference between the first and second staple in figure 15, is a 31% decrease in cost per square meter. The difference between standard renovation and most cost-efficient renovation is a 40% decrease in cost per square meter.
Figure 15. Total cost different with three alternatives (pessimistic scenario)
In figure 16&17, it can be observed that the most efficient insulation, in fact, is the most insulation.
Figure 16. Facade renovation with additional insulation (pessimistic case). Grey=highest cost, Orange=lowest cost
Figure 17. Roof renovation with additional insulation (pessimistic case). Grey=highest cost, Orange=lowest cost
In figure 18, the standard renovation alternative is the worst from an LCC perspective. The most profitable alternative is to add an insulation to the window that decreases the U-value of the window in total. The three glass window alternatives are less expensive than the standard renovation but more expensive than additional window installation. The wooden frame 3 glass window is 5% more expensive than the additional window installation.
Figure 18. Windows renovation alternatives in the pessimistic scenario
3.1.3 Optimistic
In the optimistic case, the total cost per square meter illustrates the different total costs of 3 alternatives with low inflation, low energy cost, and a high discount rate. The difference between the first and second staple, figure 19, is a 14% increase in cost per square meter. The difference between standard renovation and most cost-efficient renovation is a around 0% change in cost per square meter.
Figure 19. Total cost different with three alternatives (optimistic scenario)
In figure 21, it can be observed that the most efficient insulation amount is 0,055m for the roof
Figure 20. Facade renovation with additional insulation (optimistic case). Grey=highest cost, Orange=lowest cost
Figure 21. Roof renovation with additional insulation (optimistic case). Grey=highest cost, Orange=lowest cost
In figure 22, the standard renovation alternative is the best from an LCC perspective. The additional window alternatives are 6.5% more expensive than the standard renovation.
Figure 22. Windows renovation alternatives in an optimistic scenario
3.2 Analysis of Solar power energy system
The analysis of solar energy has been divided into two goals, where the first goal was to reach the EU2030 goal of 32,5% renewable energy, and the second goal was to create a net-zero energy building (NZEB). To account for the fact that not all buildings are located in the same area and don't have the same amount of sun intensity, three different scenarios have been chosen.
Table 9. Variables in different scenarios
Pessimistic Neutral Optimistic
Solar panel efficiency 12% 16% 20%
Sun intensity 900 1000 1100
Discount rate 2% 4% 6%
The presented results have been calculated using an apartment building from Tensta with 18 apartments; the apartment building consists of 12 apartments with 2-3 rooms and six with four rooms. For the calculations, the energy usage of a small apartment 1-3 rooms has been estimated to be 1500kWh and 3000kWh annually for bigger apartments with 4-5 rooms. The estimated annual energy usage of the building is 40 000 kWh taking into account energy used outside of the
apartments. Furthermore, the investment cost, including the materials and installations, will be
which translates into a price per square meter of SEK 2750. After 15 years, an additional investment of SEK 9180 is calculated for the change of the inverters. An annual degradation rate of 0.3% has been used to account for the loss in efficiency of the solar panels.
3.2.1 Neutral
For the neutral scenario solar panels with an efficiency of 16% and a discount rate of 4% has been chosen. The building is located in an area with the average sun intensity for the city of Stockholm.
For this building, 69𝑚!of solar panels are needed to reach the EU2030 goal of 32,5% renewable energy. The investment cost after the reduction will be SEK 162 160 with a break-even point of over 25 years. The present value of the investment is SEK -109 390. Furthermore, it would take 250𝑚! of solar panels to convert the building into a NZEB, with an investment cost after the reduction of SEK 584 400 and a break-even-point of over 20 years and a present value of SEK 109 400 after 25 years.
3.2.2 Pessimistic
For this scenario, solar panels with an efficiency of 12% have been chosen; the discount rate is set at 2%. The sun efficiency for the location of the buildings in this scenario is lower than the average, which means that less energy will be produced annually. To reach the EU2030 goal of 32.5%, renewable energy, 92𝑚! of solar panels need to be installed with an investment price after the reduction of SEK 162 160. The break-even point of this type of investment will be over 25 years, and the present value will be SEK -105 625. To reach the second goal of a net zero energy building, 330𝑚! of solar panels need to be installed. The investment cost after reduction will amount up to SEK 584 400 with a break-even point of 18 years and a present value of SEK 186 449 after 25 years.
3.2.3 Optimistic
In this scenario, solar panels with an efficiency of 20% and a discount rate of 6% are being used.
The building is in a prime location with near-maximum sun efficiency. To reach the goal of 32.5%
renewable energy set by the EU2030 framework, 55𝑚! of solar panels are needed on the roof. The cost for this investment after the price reduction will be SEK 162 160 with a break-even point of over 25 years and a present value of SEK -112 684. The second goal of a net-zero energy building could be reached by installing 200𝑚! of solar panels with an investment cost of SEK 584 400 after
the reduction. The break-even point of this scenario is 22 years and has a present value of SEK 46 858.
3.3 Analysis of small scale wind turbines
To analyze the profitability of small scale wind turbines for residential use, three different turbines have been chosen. The reason being that wind conditions are the driving force behind the amount of energy a device can produce. The three different turbines have been specifically chosen because they maximize their production of energy at different wind speeds. The turbines’ lifespan is estimated to be 25 years without any major investments during the life cycle of the turbine. The average wind speed for the Stockholm region is estimated to be 5,5m/s with areas that can reach up to 8m/s, and others that are as low as 3-4 m/s, depending on how open or covered the area is.
Furthermore, the investment cost, including the materials and installations, will be calculated with a 20% investment support for renewable energy and a 25% (VAT) reduction on work costs related to the project. Note that if the diameter of the turbine is over 2m, a building permit is needed, which adds a cost of SEK 2000-10 000. To calculate the profitability of the different turbines, the same apartment building as presented in the solar energy part is used with 18 apartments and an annual energy consumption of 40000 kWh. Moreover, the annual energy price was set to SEK 1.2 to calculate the break-even point and the present value of the investment after its life cycle.
Table 10. Small scale wind turbines used in the analyzes.
Windstar 1000 Dali Performance 5.5 WT 15000
Wind Speed 4m/s 5.5m/s 8m/s
Investment cost after
reduction SEK 32 720 SEK 189 600 SEK 312 000
Break-even point
(years) 24 Over 25 Over 25
