An optimized solution for retrofitting building façades: Energy efficiency and cost-benefit analysis from a life cycle perspective

The study aims to conduct a comprehensive cost-benefit analysis (CBA) for incremental energy star ratings in Melbourne and Perth by upgrading the thermal performance of the building façade. CBA is performed over 20, 40, and 60 years by considering the refurbishment of an existing building façade or a newly constructed house to ensure the highest energy efficiency at the lowest reasonable cost. The hybrid approach of using a dynamic energy simulation tool (FirstRate5) and @RISK optimizer provides a feasible solution for obtaining a specific star rating. This study shows energy saving costs can offset the additional investment of insulation levels and energy-efficient glazings. However, life cycle energy savings are minimized after a certain point of supplementary yield insulations, such as ceilings R(6) and walls R(3). Hence the results are evaluated in terms of financial appraisals, such as net present value (NPV), benefit-cost ratio (BCR), internal rate of return (IRR), and other indicators for incremental star-rated designs. The results of the financial appraisals recommend upgrading the obligatory star rating from 6-star to 8-star is a cost-effective solution irrespective of climate and time horizon. Sensitivity indices of design variables exhibit the significance of functionality and cost implications in the established energy rating scheme. Possible economic recession (at > 7%) due to COVID and the Ukraine war, the investment coefficient (r ≤ −0.56) with NPV increases significantly against energy savings cost (r ≥ 0.8). Given the present energy rating scheme, these findings provide an exhaustive perception of policy implications.