Computation Of Variations In Net Profit Due To Energy Efficiency Measures

Savings from energy conservation can be evaluated on the basis of different measures, such as parameter studies, life cycle costing, and investment return in financial terms. In this paper, we report the development and evaluation of a tool for estimations of the return on financial investment in energy conservation. The tool was designed for evaluations in the design stage for commercial buildings. The method for calculating the investment return was based on three components: 1) An estimation of the building production cost. 2) A simulation of the energy use based on the building specification. 3) A traditional present value computation. From this calculation the investment return was calculated in terms of net profit, from the net rental income, property value and investment costs. The tool has been evaluated on the basis of data from completed buildings. These investigations indicated that the simulated energy use and building production costs were reliable. The tool has in addition been used and evaluated by HVAC-engineers and real estate developers at the company NCC AB in Sweden. Based on this evaluation it was concluded that the obtained method for illustrating the investment return capacity of energy conservation measures shows promising features for future use in discussions of energy efficiency in buildings.