Low‐energy versus conventional residential buildings: cost and profit

Abstract

Purpose

The purpose of this paper is to investigate the commercial aspect of “green” building construction and whether increased investment costs are profitable taking the reduction in operating costs into account. The investment viability is approached by comparing investment in conventional and “green” residential building, particularly passive houses, using real construction and post‐occupancy conditions.

Design/methodology/approach

The key data were obtained by surveys and personal interviews. The first survey was directed to the companies which had experience of building low‐energy housing and the second survey to housing companies that actively manage operation of low‐energy houses.

Findings

Findings indicate that low‐energy buildings are considered an interesting and sound business opportunity, and investment analysis indicates that low‐energy houses (particularly passive houses) can be more attractive investments than conventional residential buildings. The long‐term strategy of building low‐energy buildings can give competitive advantages. The government initiative and the construction regulations are found to be necessary in eliminating the initial barrier to energy‐efficient projects and achieving long‐term environmental goals.

Originality/value

This paper provides insights into the investment decisions and contributes to the understanding of the construction, operation and profitability of energy‐efficient residential buildings.

Citation

Zalejska‐Jonsson, A., Lind, H. and Hintze, S. (2012), "Low‐energy versus conventional residential buildings: cost and profit", Journal of European Real Estate Research, Vol. 5 No. 3, pp. 211-228. https://doi.org/10.1108/17539261211282064