Abstract
Nearly zero-energy refurbishments provide many of the benefits of nearly zero-energy buildings to the aging building stock and offer an opportunity to make them more resource-efficient and environmentally friendly, with an increased social and financial value. However, high initial costs and uncertainties about the expected benefits characterize this type of investment and affect the building stakeholders’ decision on whether to go ahead with such a project or not. Given the special case of existing buildings and associated challenges to refurbish them to nearly zero energy, this chapter identifies and classifies uncertainties that characterize and make this type of investment a highly uncertain endeavor over the project life cycle. It also provides recommendations about managing these uncertainties during the project evaluation phase. Finally, a new approach to project evaluation based on the option pricing theory is presented along with a case study example.
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Acknowledgments
The authors would like to acknowledge the financial support for this work received from the United States National Science Foundation (NSF) Grant NSF-CMMI-BRIGE 1125478. Any opinions and findings in this book chapter are those of the authors and do not necessarily represent those of NSF.
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Menassa, C.C., Ortiz-Vega, W. (2013). Uncertainty in Refurbishment Investment. In: Pacheco Torgal, F., Mistretta, M., Kaklauskas, A., Granqvist, C., Cabeza, L. (eds) Nearly Zero Energy Building Refurbishment. Springer, London. https://doi.org/10.1007/978-1-4471-5523-2_6
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