Passive House Module; Blog Assignment 2

Report Title: Economic Analysis of passive houses and low-energy houses compared with standard houses.

Authors: A. Audenaert, S.H. De Cleyn, B. Vankerckhove (2007)

This study investigates three different buildings types, the Passive House (PH), the Low-Energy House and the Standard Traditionally Built House. The paper begins by introducing the drivers and need for these more energy efficient dwellings which include the global warming epidemic and protocols such as Koyoto. It is stated that the potential GHG emissions reduction in the housing sector from an economic point of point of view is what will be addressed throughout this paper. This is to be done by carrying out an economic analysis on the three previously stated house types.

The first details which were stated in the report were what house types were to be used. It was decided that five different types of PH were to be used along with three different types of low-energy and standard houses. All of these houses are to be exactly the in same geometry and size to each other with the only difference being the materials used in constructing them. All of the various different materials were all shown in a table detailing all the different specifications and construction types. In terms of energy cost analysis two different types of data and calculations are presented, these being at constant energy costs and growing energy costs. All of this analysis also takes into account specific surplus costs during building, possible subsidies and potential energy savings over a 20 year term.

Through this analysis it is shown that the break-even time for a low-energy house compared with the standard house is 12.3 years and 29.9 years for the PH at constant energy prices. In terms of growing energy costs the time needed to recover the greater cost of a PH is 18 years in comparison to a standard house and 9.5 years for a low-energy house in comparison. This also states that when comparing the PH to the low-energy house the break-even time is 24 years.

There is also a cash flow analysis in this report which tries to predict the evolution rate of a variable mortgage for the coming 20 years by using a fixed rate. In this section three separate comparisons are made: Standard to low-energy, standard to PH and low-energy to PH. This analysis was also carried out in two parts, constant energy costs and growing energy costs. The results from the constant energy costs are clearly in favour of the low-energy house after the initial additional costs have been incurred and spread over the 20 year period. In assessing the cash-flow analysis in terms of growing energy costs three scenarios were simulated. These included annual growth rates of 5%, 10% and 15%, with the figures in the tables being ones which show the impact on the annual family budget for each scenario.

One of the most important factors detailed in this paper is the fact that the more energy prices increase, the more the impact of the PH becomes positive. This is very apt at this moment in time in the current climate of constantly increasingly energy prices. Comparison of the low-energy house with the PH demonstrates the profitability of the low-energy house after 2 years. The PH is only profitable in cases where the growth of energy costs are higher than 10% and is only more profitable than the low-energy house if the growth is more than 15%. The low-energy house is profitable in all cases in comparison with the standard house.

Overall the analysis shows the break-even time is always shorter for the low-energy house than for the PH over the period which was analysed. Nevertheless it is very dependent on the growth of energy prices. The cash flow results show that the low-energy house is the safest choice with a minimal impact on the family budget considering constant energy prices. The impact of the PH is strongly dependent on the evolution of the energy prices and needs more time to break-even to begin paying back than the low-energy house. The final conclusion and finding of this paper which was presented was that as the energy price and growth rate is so unpredictable, at this moment in time the low-energy house is the safest choice at this moment in time because the profit is less dependable on an irregular variable.

Please feel free to comment on or ask questions about what it written above or the report in general. I would be glad to answer any questions or queries that you may have or more information which may be wanted.