Energy renovation of single-family houses in Denmark utilising long-term financing based on equity

This paper aims to present an economic overview of the opportunities for energy renovation of single-family houses in Denmark financed over the long term. The paper focuses on the economic difference between energy savings and the repayment of investment. Taking out the average remaining 20% equity in long-term property mortgage loans and utilising it for extensive energy renovation improves both the economy and the extent of included measures.
Approximately 30% of energy consumption in Denmark is used for space heating. The existing 1 million single-family houses account for approximately half of this, thus making energy renovation a key factor for the reduction of CO2 emissions.
The conclusions were that in average the possible budget for renovation varied between €20,000 - 40,000 per single-family house. The equity of the house was particularly dependant on geographical location and construction period. Different energy renovation measures were analysed in terms of economy showing that a wide range of specific measures had a positive economic balance for the homeowner from year 1. The economic balance between saved energy and repayment of the investment is however very dependant on the assumed future energy price. An example showed that a typical house from 1925, still in its original form, could yield annual savings for the homeowner of approximately €2600, assuming a future energy price of 0.2 €/kWh. At the current energy price level of 0.1 €/kWh energy renovation in general is almost economically neutral for the homeowner.