Building energy retrofits under capital constraints and greenhouse gas pricing scenarios

•Present a methodology to select retrofit paths depending on capital availability.•Demonstrate the methodology using a case study with sub-metered end-uses.•Measure cost and available capital are more significant than greenhouse gas price.•Investment into energy retrofits is a key for reduction of greenhouse gas emissions.

This study demonstrates that capital availability needs to be considered while developing retrofit measures. Specifically, this study established a methodology using building energy simulations to determine optimal retrofit options over a range of NIST greenhouse gas pricing projections, full and half-price measure costs, and capital availability ranging from $1/ft2-yr ($10.76/m2-yr) to $100/ft2-yr ($1076.39/m2-yr), representing no capital constraint. The demonstration considers a sub-metered office building in Philadelphia with central heating and cooling equipment nearing replacement. When capital is restrained, measure installation occurs over several years, reducing energy and cost savings over the investment lifetime. This effect is as significant as the greenhouse gas price. Furthermore, changing measure installation order matters most when capital availability is constrained to $1/ft2 ($10.76/m2), resulting in a difference of $0.34–0.43/ft2 ($3.66–4.63/m2) between the least-optimal and optimal measure ordering. All but $0.05/ft2 ($0.54/m2) of this difference is explained by when fast-payback measures are installed; load-reduction benefits were insufficient to justify delaying fast-payback measures. This suggests that capital availability is a determinant of retrofit financial performance, and ordering measures for optimal load reduction is inferior to ordering measures with fast-payback when these strategies conflict. Therefore, increasing investment in energy retrofits is key to reducing greenhouse gas emissions.