Costs of Modernization and Improvement in Energy Efficiency in Polish Buildings in Light of the National Building Renovation Plans

Abstract

Long-term renovation strategies (LTRSs) play a central role in achieving the European Union’s objective of a climate-neutral building stock by 2050. In Poland, the challenge is particularly acute: a majority of the building stock was constructed before 1990 and does not even meet basic thermal performance standards. In view of the state of the buildings in Poland and the assumptions made about obtaining the necessary energy parameters in the coming years, it is necessary to undertake thermal modernization measures. The purpose of the paper is to assess the economic efficiency of the variants of modernization of building stock in Poland, taking into account the constraints related to improving energy efficiency. Additionally, the article also points out the problem of discrepancies resulting from climate zones that may significantly affect the final primary energy results (on average, 5–15%). In order to achieve the objectives, the paper focuses on the analysis of energy sources. According to the overall score in the analytic hierarchy process (AHP) method, the best solutions, with a global priority of 0.46, are renewable energy sources (RESs). The evaluation of selected fuel types in the 2055 perspective, using the technique for order preference by similarity to ideal solution (TOPSIS) method, indicate favorable environmental performance by sources based on electricity, i.e., air-source heat pumps, ground-source heat pumps, and electric heating, which achieved the highest relative closeness to the ideal solution. Heat pump systems can reduce energy consumption by 26–41% depending on the building and heat pump type. The final analysis in the paper concerns different options for thermal modernization of a model single-family house, taking into account different energy sources and stages of thermal modernization work. The scenario involves the simultaneous implementation of all renovation measures at an early stage, resulting in the lowest investment burden over time and the most favorable economic performance.

1. Introduction

1.1. Review of the Literature

Decarbonization of the building sector plays a critical role in the climate and energy policies of the European Union (EU). Buildings account for roughly 40% of final energy consumption and 36% of greenhouse gas emissions in the EU, making them a key target for deep renovation strategies under the European Green Deal and the Renovation Wave initiative [1,2]. Building energy renovation plays a crucial role in meeting the European Union’s decarbonization objectives [3]. The European Commission’s Renovation Wave strategy, launched in 2020, aims to at least double the annual renovation rate of buildings by 2030. This initiative has been significantly strengthened by the 2024 revision of the Energy Performance of Buildings Directive (EPBD), which requires member countries to implement National Building Renovation Plans (NBRPs) that outline how the national building stock will achieve net-zero emissions by 2050, with milestones in 2027, 2030, 2035, and 2040 [4,5]. It is a huge challenge not only because of the unprecedent climate changes but also because of overpopulation, intensive urbanization, excessive use of resources, and social inequalities that are present in many regions [6]. It is important to note that similar decarbonization objectives are being pursued by other non-European countries, including Japan and South Korea [7,8]. Likewise, China has announced a comparable commitment, setting 2060 as its target year [9].

According to simulation-based studies, a substantial share of these buildings should achieve an EP index (unit demand for primary energy) below 50 kWh/m²/year by 2050, requiring large-scale public and private investments and long-term renovation strategies [10].

Cost analyses indicate that while energy-efficient upgrades can be cost-optimal over time, upfront expenses for extensive retrofits remain a barrier, especially in the low-income and multi-family housing sectors [11].

To address this, the European Commission and national governments have introduced various tools and incentives such as Building Renovation Passports (BRPs), minimum energy performance standards (MEPS), digital one-stop-shops, and financing schemes. BRPs, in particular, have shown strong potential to support decision-making and reduce lock-in effects from suboptimal, one-off upgrades [12,13,14,15]. Studies also highlight the role of regional climate zones, typological differences in buildings, and integration of the renewable energy system in tailoring cost-effective strategies [16,17,18,19,20,21,22].

Developing cost-optimal and environmentally sustainable strategies for household heating systems is a critical task that aligns with the principles of sustainable development, enhances energy efficiency, and supports environmental protection for future generations, with impacts that extend well beyond local and national boundaries [23,24].

Well-structured maintenance strategies are closely tied to improving energy efficiency and expanding the share of energy-efficient buildings across EU member states. These strategies must be thoughtfully designed and systematically implemented to be effective. The academic community has extensively explored the domain of building maintenance, addressing numerous aspects of the topic. For instance, scholars have examined approaches for maintenance prioritizing strategies [25], proposed methods to enhance the overall effectiveness of maintenance management systems [26], and developed guidance to support decision-making processes in maintenance planning [27]. In addition, studies have identified key factors and structured procedures that influence the success of building maintenance activities [28]. Comprehensive analytical frameworks have also been introduced, such as a multi-criteria decision-making model aimed at optimizing maintenance processes [29], as well as models designed to assess and estimate maintenance costs in building operations [30]. In reference [31], the authors highlight the urgent need for sustainable maintenance approaches, especially for heritage buildings, which often suffer from insufficient maintenance, delayed repairs, and financial limitations.

In addition to maintenance, several further challenges must be addressed to ensure the effective implementation of renovation policies across EU countries. One of the most pressing issues is the development of a sufficiently skilled workforce [32], along with the resolution of regional disparities in renovation capacity. According to the European Construction Sector Observatory, the availability of human capital remains a major bottleneck in increasing the rates of renovation in many member countries, including Poland [33].

Digitalization, such as the use of BIM-supported tools, also plays an increasingly central role in enabling effective and affordable building upgrades [34]. Furthermore, successful renovation frameworks tend to align energy objectives with broader social policies, particularly by addressing energy poverty and ensuring access to adequate housing in line with just transition goals. The integration of renewable energy technologies, including photovoltaics and heat pumps, has become a standard element of comprehensive renovation packages.

Lastly, long-term renovation strategies (LTRSs) play an important role in achieving the European Union’s objective of a climate-neutral building stock by 2050. LTRSs have been researched in many studies such as [35,36,37,38,39].

As highlighted in the manuscript [40,41], a comparison of LTRSs across EU member countries reveals that, depending on the country, LTRSs vary significantly. For example, Belgium does not have a single nationwide strategy; instead, separate strategies have been developed for its different regions. Countries such as Germany, Greece, and Lithuania have set a clear objective of achieving a 100% reduction in CO₂ emissions by 2050. In contrast, Poland’s LTRS lacks a clearly defined CO₂ reduction target. One of the key indicators presented in the LTRS documents is the annual renovation rate, which defines the percentage of the total building stock that is to be renovated each year. Moreover, by the end of 2025, all EU member countries are required to submit draft National Building Renovation Plans, which will be evaluated by the European Commission. Final versions of these plans must be submitted by the end of 2026 [42]. The National Building Renovation Plan represents an evolution of the existing long-term renovation strategy and is intended to replace it.

The long-term strategy for the renovation of buildings is not a legal act in itself, so it does not directly introduce legislative obligations. It is a strategic document that defines the directions and goals of the country’s energy policy for modernization of the building stock. By the time the new strategy for minimum energy performance standards and building renovation is adopted, it is estimated that, at least, the effects of the implemented 2022 LTRS renovation scenario will be achieved.

1.2. Building Stock in Poland

Poland has an extensive and diverse building stock composed of approximately 15.2 million buildings [43], with a significant amount constructed before modern energy standards were implemented. According to the 2011 National Population and Housing Census and the Central Register of Building Energy Performance (CEEB), most existing buildings fall well below the performance thresholds defined for nearly zero-energy buildings (nZEBs) and zero-emission buildings (ZEBs).

According to [42], each member state is required to establish a maximum energy performance threshold such that 16% of its national non-residential building stock exceeds this limit (hereinafter referred to as the “16% threshold”). A second threshold must also be set so that 26% of the non-residential building stock exceeds it (the “26% threshold”). These maximum energy performance thresholds may be defined for the national non-residential building stock as a whole or separately for specific building types or categories. Minimum energy performance standards shall, as a minimum, ensure that all non-residential buildings meet:

(a)

A threshold of 16% from 2030;

(b)

A threshold of 26% from 2033.

EU member countries shall ensure that the average primary energy consumption in kWh/(m²/year) of the total residential building stock is as follows:

(a)

Reduced by at least 16% by 2030 compared to 2020;

(b)

Reduced by at least 20–22% by 2035 compared to 2020;

(c)

By 2040, and every 5 years thereafter, equal to or below a value determined at the national level and resulting from a gradual reduction in the average primary energy consumption over the period 2030–2050, consistent through the transformation of the residential building stock to fully decarbonized buildings.

The energy classification of Polish buildings, currently in transition, follows the guidelines set out in the draft regulation of the Minister of Development and Technology (July 2024) [44]. Energy performance is measured using the primary energy (EP) index, expressed in kWh/m²·year. The buildings are categorized into classes A + (best performance, EP ≤ 0) to G (worst performance, EP > defined thresholds varying by building type). However, significant discrepancies exist between Poland and other EU countries, with Polish thresholds often being more demanding for some building types.

In order to highlight differences in energy performance across various EU countries,

Table 1. Comparison of EP values across different energy classes for selected EU countries; values provided in [kWh/m²·year] [45].

Class	Poland		Germany	Slovakia
	Single-Family Buildings	Multi-Family Buildings	Residential Buildings	Single-Family Buildings	Multi-Family Buildings
A+	EP ≤ 0	EP ≤ 0	EP ≤ 30	EP ≤ 54	EP ≤ 32
A	EP ≤ 63	EP ≤ 59	EP ≤ 50	EP ≤ 108	EP ≤ 63
B	EP ≤ 75	EP ≤ 70	EP ≤ 75	EP ≤ 216	EP ≤ 126
C	EP ≤ 94	EP ≤ 88	EP ≤ 100	EP ≤ 324	EP ≤ 189
D	EP ≤ 113	EP ≤ 105	EP ≤ 130	EP ≤ 432	EP ≤ 252
E	EP ≤ 131	EP ≤ 123	EP ≤ 160	EP ≤ 540	EP ≤ 315
F	EP ≤ 150	EP ≤ 140	EP ≤ 250	EP ≤ 648	EP ≤ 378
G	EP > 150	EP > 140	EP > 250	EP > 648	EP > 378

presents a comparison of the EP values within different energy classes for selected member countries [45]. The values provided in the table were calculated by authors of the study [45] and were gathered in February 2025. This comparison provides insight into national approaches to energy classification and the resulting disparities in energy efficiency thresholds.

As can be seen in Table 1, the range of classes for single- and multi-family buildings proposed in the draft regulation of the Minister of Development and Technology (July 2024 [44]) is quite narrow compared to that of Poland’s neighbors.

The analysis of primary energy thresholds across energy classes in selected EU countries reveals that Poland imposes significantly stricter energy performance requirements (proposed in the draft regulation of the Minister of Development and Technology—July 2024 [44]), particularly when compared to Germany and Slovakia. For instance, a building classified as energy class A+ in Poland must achieve an EP value of zero, whereas the same classification allows up to 30 kWh/m²/year in Germany and 54–32 kWh/m²/year in Slovakia, depending on the building type. This pattern of stricter thresholds persists across nearly all classes (A–F), with Polish values consistently lower than those in the other two countries. While the stringency of Polish requirements may impose greater challenges for compliance and renovation, particularly in older buildings, it also signals a strong national commitment to reducing energy consumption and advancing decarbonization.

Additionally, an overview of the building stock in Poland, which presents the number of buildings by category of use, is shown in

Table 2. Number of buildings by category of use in Poland [43].

Building Type	Number of Buildings [Units]	Total Usable Floor Area [m2]	Average Usable Floor Area [m2]
Single-family residential building	6,930,433	806,033,666.4	116.30
Multi-family residential building	570,889	420,354,270.6	736.32
Collective residence building	29,564	32,815,628.3	1109.99
Public utility building for healthcare	21,914	21,661,677.1	988.49
Other public utility buildings	569,727	283,101,912.1	496.91
Industrial, storage, and agricultural buildings	7,084,289	966,922,058.6	136.48
Total	15,207,356	2,530,889,214.1

. This breakdown illustrates the distribution of different types of buildings, offering context for further analysis related to energy performance and construction characteristics of the building stock. The structure of this stock is dominated by single-family residential buildings, which constitute around 45% of all buildings. Another important segment is industrial, storage, and agricultural buildings, which together constitute a large percentage of buildings with a very diverse structure. The data were gathered from the National Building Renovation Plan draft accessed in March 2025.

Table 3. Age structure of the housing stock in Poland built before 2002 and the baseline unit energy demand indicators of its buildings [46,47].

Period of Construction	Buildings [Thousand]	Apartments [Million]	EP [kWh/(m2·Year)]	EK [kWh/(m2·Year)]
Until 1918	404.7	1.18	>350	>300
1918–1944	803.9	1.45	300–350	260–300
1945–1970	1363.9	3.11	250–300	220–260
1971–1978	659.8	2.07	210–250	190–220
1979–1988	754.0	2.15	160–210	140–190
1989–2002	670.9	1.52	140–180	125–160

presents the age structure of the building stock in Poland constructed before 2002, along with the corresponding baseline unit energy demand indicators. This information highlights the relationship between the age of residential buildings and their typical energy consumption levels, providing a basis for assessing primary energy efficiency improvements. The information was gathered by co-authors in March 2025 from the Central Statistical Office in Poland [46], as well as from the National Baseline Assessment on Underperforming Renovations Poland report [47].

Table 4. Median value of the annual non-renewable primary energy demand indicator by building use and year of commissioning [kWh/(m²·year)] [46].

Building Use	<1994	1994–1998	1999–2008	2009–2013	2014–2016	2017–2018	2019–2020	2021–2024
Single-family residential	222.3	157	134.8	118.8	108.6	94.1	88.8	68.3
Multi-family residential	148.2	129.7	127.0	111.4	99.1	88.1	82.9	72.9
Collective residence	220.2	252.2	198.5	198.5	187.1	191.8	163.1	122.2
Healthcare buildings	326.3	291.6	296.7	298.4	314.4	304.1	286.8	224.2
Other utility buildings	216.7	208.8	190.2	181.9	160.2	143.3	140.0	94.9
Industrial, storage, and agricultural	256.0	201.2	189.3	172.7	165.9	150.8	148.5	102.6

presents the median values of the annual non-renewable primary energy demand indicator for buildings in Poland categorized by building use and year of commissioning. The data, compiled from the Central Register of Building Energy Performance and official government sources [46], provides a comprehensive overview of typical energy demand patterns across different building types and construction periods.

The median values of the annual non-renewable primary energy demand indicator by building use reveal a clear downward trend in energy consumption per square meter across all building types. Both single-family and multi-family residential buildings have shown continuous improvement in energy efficiency. Collective residences and healthcare buildings have the highest and most persistent energy consumption levels. Despite some improvements, healthcare buildings still consume significant amounts of energy due to specific requirements and restrictions related to their equipment and safety. The steady improvement reflects the impact of stricter building regulations, better insulation, modern heating systems (e.g., heat pumps, district heating), and growing use of renewable energy. Retrofitting older buildings remains crucial, as a significant portion of Poland’s building stock was constructed before 1994.

In Poland, the challenge is particularly acute: a majority of the building stock was constructed before 1990 and fails to meet even basic thermal performance standards [48]. The study indicated that achieving the target energy performance parameters requires substantial financial investment [49,50].

The renovation of buildings can be initiated by various technical, functional, or ownership-related factors. Based on sources [42,51] and the reviewed Draft of the National Building Renovation Plan for Poland [43], several potential triggers for initiating the renovation process can be identified:

• Renovation due to, for example, the deterioration or loss of durability of certain building elements or installations;
• Change in ownership to a person intending to renovate the building;
• Change in the building’s use, such as the adaptation of an attic for residential purposes;
• Structural alteration, extension, or superstructure of the building;
• Repair of structural damage, such as roof damage, combined with the removal of asbestos-containing materials;
• Elimination of technical defects resulting from construction errors, for example, the detachment of the thermal insulation layer;
• Modernization of buildings and production lines in industrial or service facilities.

In line with global trends, researchers in Poland have undertaken numerous studies aimed at improving the energy performance of buildings. These investigations often focus on specific building types, such as single-family houses, seeking to identify optimal solutions already implemented within the European Union [52,53]. A considerable body of simulation-based and analytical work also addresses the potential application of renewable energy sources in Polish buildings [54,55]. Other studies examine aspects of building thermal retrofitting [40,41,56], as well as broader topics such as the profitability of energy sector companies in Poland [57] and the national energy policy outlook through 2050 [58].

A literature review reveals that there is a notable lack of studies performing comparative economic evaluations of building energy retrofits across Poland’s diverse climate zones. The novelty of the present work lies in its integration of economic and multi-criteria analyses within a framework that explicitly accounts for these climate differences.

The objective of this study is to evaluate the economic efficiency of alternative modernization strategies for the building stock in Poland, within the context of constraints arising from energy efficiency improvement requirements. The analysis seeks to identify and assess the factors influencing decision-making processes aimed at upgrading a building’s energy performance class, while ensuring that modernization measures are implemented in a rational manner consistent with national and European Union climate neutrality targets. Given that the definitive energy class ranges for specific building types have not yet been established and the relevant draft regulation remains under review, the study adopts energy efficiency thresholds expressed by the EP indicator [kWh/(m²·year)], as defined in the scenario framework of the long-term building renovation strategy.

To address the stated objectives, Part 2 of this paper examines the characteristics and implications of various energy sources. Part 3 presents an evaluation of selected fuel and heat source types in the 2055 time horizon. Part 4 analyses alternative thermal modernization strategies for a model single-family house, incorporating different energy sources and sequential stages of renovation measures. The study concludes with a discussion of the findings. The overall analytical framework and workflow of the study are illustrated in Figure 1.

2. Energy Performance Analysis

2.1. General Information

In preparation for detailed analyses, the selection of energy supplied to the building and the influence of the building’s climate zone on the differences in the EP result were analyzed. To support the Part 3 assessment of the cost implications and energy performance potential outlined in Poland’s long-term renovation strategy (LTRS), a detailed analytical approach was adopted. The assumptions for the primary energy sensitivity case study were based on parameters consistent with current technical regulations, ensuring alignment with both national and EU standards. To maintain comparability and isolate the effects of building envelope and energy source choices, the model buildings were assumed to rely solely on natural (gravity) ventilation and to operate without renewable energy sources.

Climatic conditions have a significant impact on energy consumption in buildings. Poland is divided into five climate zones (Figure 2), with over 60 meteorological stations located within each. Each station provides specific climate data allowing for the determination of energy performance adapted to the weather conditions prevailing in the environment of the building under study. A building’s energy demand parameters will vary depending on its location on the map of Poland. Recognizing the significant impact of climatic variability on building energy demand, the analysis incorporated representative climate conditions across Poland by selecting three distinct locations corresponding to different climate zones: Szczecin (zone I), Warsaw (zone III), and Zakopane (zone V). These locations were chosen to capture the range of heating degree days relevant to the country’s diverse geography. Additionally, the geographical distribution of buildings indicates their greatest concentration in climate zone III, where dense development generates high energy needs. This methodological framework allowed for a robust evaluation of primary energy consumption variability and investment needs across varying climatic contexts, providing a grounded basis for the discussion of cost-effective pathways toward achieving the LTRS renovation targets.

The analysis conducted in the Audytor OZC 7.0 Pro software [59] was prepared for a representative set of nine building types commonly found in Poland, including single-family detached houses (both single- and two-story); multi-family residential buildings of various sizes; and public buildings such as kindergartens, schools, clinics, and office buildings; as well as sports facilities. For each of the above-mentioned building types, a representative building was presented whose partition parameters were adapted to the current requirements in accordance with [60,61] for eight heat sources and three domestic hot water sources. Applied values of the thermal transmittance coefficient (U) were as follows: walls (0.2 W/m²K), roof (0.15 W/m²K), ceiling above the basement (0.25 W/m²K), windows (0.9 W/m²K). Each of the building models was analyzed for different types of heating and domestic hot water preparation. The types of final energy sources were selected based on the structure of heating energy consumption in buildings in Poland developed by EUROSTAT. Figure 3 shows the structure of heating energy consumption in buildings in Poland in 2021 based on Eurostat.

2.2. Results of Energy Performance Analysis

Based on nine model buildings, Figure 4 illustrates the impact of the energy carrier on the primary energy index. A common energy carrier was assumed for central heating and domestic hot water. The database created indicates that there is no problem meeting the minimum requirement for the primary energy index for buildings powered by a pellet boiler. A ground-source heat pump will also be suitable for some buildings but, in most cases, only in the mildest climate zone, zone I. Due to their power source, heat pumps require the use of photovoltaics to reduce the non-renewable primary energy input factor (w_i for electricity = 2.5, w_i for solar energy = 0) [62]. This solution is neither cheap nor easy from the investor’s perspective due to the importance of properly selecting the heat pump and photovoltaic systems, which can achieve varying levels of efficiency. Installing a heat pump is fairly justified in buildings with good thermal insulation. If installed in a building with poor insulation, the heat pump’s electricity consumption will be significantly higher, limiting the savings associated with its installation. Heat pump systems within the prepared scenarios of selecting the heat source reduce energy consumption by 26–30% for air-to-water heat pumps and by 36–41% for ground heat pumps depending on the building type. Relatively good results can be achieved by connecting the building to a district heating network or, more specifically, to an energy-efficient district heating system that produces energy through cogeneration. According to the Central Statistical Office (GUS), in 2021 [62], over half of households (52%) used district heating because most apartments are located in multi-family buildings using this type of heating. The significantly higher primary energy demand for the clinic is influenced by the shape of the building, the significant number of windows, and most importantly, the high value of auxiliary energy typical for buildings of this category.

The analysis indicates that a reasonable solution would be to further divide the catalog of public buildings into subcategories based on the building’s intended use, taking into account differences in energy efficiency classes. Based on the prepared calculations, it should be noted that in the case of sports facilities, the issue of room height and difficulties in obtaining the EP index are decisive, as it is a surface-based indicator, not a cubic capacity one. Another specific example can be a warehouse building with a low operating temperature and daylighting, which should not be compared with a manufacturing plant producing, for example, electronic devices, where both require the same EP level. Furthermore, the current regulations and the planned division into energy performance classes do not take into account the diversity of local climate conditions. This is particularly important for low-energy buildings, where there is a significant discrepancy between a building located in zone I and a building located in zone V. The EP results within this study range between zones I and III and are, on average, about 7% (max. 14%), while the EP differences between zones I and V are usually in the range of 10–20%, but in some cases the discrepancy was even ~40% (Figure 5).

The presented analysis highlights that the primary energy result is strongly dependent on the type of energy supplied, the category of the facility, and the climate zone in which it is located. The study confirms that upcoming energy performance classifications (classes A–G) should incorporate regional climate variation to ensure fairness and feasibility across different locations. Without such consideration, some regions—especially colder zones—face systemic disadvantages in meeting national renovation and energy efficiency targets. These insights provide a foundation for future legislative adjustments and technical guidelines, supporting a more accurate, equitable, and cost-effective transition toward a decarbonized building stock in line with EU climate policy.

3. Assessment of Selected Fuel Types in the 2055 Perspective

3.1. Estimation of Fuel Prices

In accordance with the provisions of the Energy Performance of Buildings Directive (EPBD), member countries are required to pursue the gradual phase-out of individual fossil fuel boilers. As an initial measure, starting from 2025, member countries should discontinue the provision of financial incentives for the installation of individual fossil fuel boilers, including those powered by natural gas, with the exception of systems for which investment decisions were made prior to 2025. This approach reflects the broader objective of decarbonizing the heating and cooling sectors across the European Union. In addition, member countries are obligated to develop and implement National Building Renovation Plans, which should outline specific measures and policies aimed at systematically eliminating the use of fossil fuels in heating and cooling applications. These plans are intended to serve as strategic instruments to accelerate the transition towards a low-emission and energy-efficient building stock.

In the Polish context, the national strategy for the development of renewable energy sources within the power generation system plays a key role in shaping the future direction of heat generation technologies. The planned increase in the share of renewable energy sources (RESs) in electricity production is expected to drive the transformation of the heating sector, promoting the adoption of cleaner, low-emission solutions. The development of RESs is seen as fundamental to achieving national and EU-level climate targets, enhancing energy security, and reducing dependence on imported fossil fuels. The main assumptions concerning the targeted share of RESs in electricity generation are presented in

Table 5. The targeted share of RESs in electricity generation [43].

Year	2020	2025	2030	2035	2040	2045	2050
RES share	24.0%	31.0%	56.1%	69.9%	69.4%	82.2%	95.0%

. In

Table 6. Assumptions regarding the fuel mix in heating [43].

Year/Fuel	2020	2025	2030	2035	2040	2045	2050
Biomass/biogas	12.3%	15.2%	21.1%	22.2%	28.2%	21.2%	21.3%
Heat pump	0.0%	0.0%	3.7%	14.8%	28.2%	49.5%	63.8%
Coal	69.0%	60.0%	44.0%	32.0%	30.0%	0.0%	0.0%
Gas and other fossil fuels	19.0%	25.0%	31.0%	31.0%	41.0%	20.0%	0.0%
Non-RESs with zero emission	0.0%	0.0%	0.0%	0.0%	0.0%	9.0%	15.0%

, assumptions regarding the fuel mix in heating are presented.

The Directives on the Emissions Trading System introduced a new ETS2 mechanism covering transport and buildings and parallel to the current EU ETS. The mechanism is to start operating in 2027, and in 2030, ETS1 and ETS2 will be merged. The highest costs of the ETS2 system will be borne by residents of the oldest, uninsulated single-family buildings.

Based on analyses prepared in mid-2024 by W. Buk and M. Izdebski [63] and established on forecasts of allowance prices prepared by the European Commission regarding the introduction of ETS2, the cost increases of supplying energy from coal and gas for a typical house in the perspective of 2055 were prepared. Additionally, according to Mc Kinsey & Company [64], the prediction of electricity costs fluctuations in Poland until 2055 was estimated. The expected changes in energy prices from gas, coal, and electricity over the next 30 years are presented in

Table 7. Expected price changes over 30 years for an average house in Poland.

Year	Gas	Coal	Electricity
2025	100%	100%	100%
2027	106%	123%	96%
2028	110%	138%	95%
2029	111%	142%	93%
2030	111%	142%	91%
2035	127%	207%	82%
2040	156%	322%	81%
2045	183%	428%	80%
2050	195%	474%	79%
2055	201%	497%	78%

.

EPBD assumes decarbonization of heating and cooling, including through district heating and cooling systems, and the gradual phase-out of fossil fuels from heating and cooling, with the aim of completely phasing out fossil fuel boilers by 2040 at the latest. As can be seen in Table 7, the increase in coal and gas prices until 2030 will be gradual, and then from 2035 onwards, the price jump will be significant. For coal-based heating, the annual cost for 100 m² residential buildings with exceptionally low energy efficiency is expected to increase fourfold by 2055. Similarly, for gas-based heating, the cost for the same energy demand category is projected to increase by 101% over 30 years.

These projections underscore the urgent need for significant thermal renovation and the transition to low-emission heating technologies to mitigate the financial impact of ETS2, in line with the EU’s decarbonization goals.

3.2. Fuel Evaluation According to AHP Analysis

In order to compare energy sources and determine their perspectives, an analysis using the AHP method was conducted. The main problem of the AHP method concerns the measurement of uncountable factors. The alternatives were scored relative to each other based on the decision-maker performing a series of pairwise comparisons. This process leads to the generation of a total score for each alternative, by which they are ranked. For the analysis, descriptive data for each energy source were used; these are presented briefly in

Table 8. Descriptive data used for AHP analysis.

Energy Source	I Energy Performance	II Cost Performance	III Future Performance
Coal	High calorific value, independent of external supply; low efficiency in old boilers, high CO2 emissions	Low cost of fuel in mining regions; high cost of CO2 emissions, rising coal prices	Opportunity to upgrade existing plants; climate constraints, plans to move away from coal
Gas	Stable supply, high efficiency of modern boilers; dependence on imports, high CO2 emissions	Relatively low operating cost with good building insulation; volatility of gas prices, connection costs	Short-term stability as transitional fuel; dependence on imports and geopolitics
Fossil fuels	Easy to store and transport; high CO2 emissions, dependence on oil prices	Low capital costs for boilers; high and volatile fuel prices	Potential for use in emergency systems; no long-term prospects for environmental reasons
Biomass	Renewable, local availability; lower energy density, dependence on fuel quality	Low local fuel costs; installation and fuel storage costs	Support for local economy, carbon neutrality; potential variability in resource availability
RES (heat pump, solars, etc.)	High efficiency, no local emissions; weather-dependent (solar), high power consumption (heat pumps)	Low operating costs with high efficiency; high investment costs (heat pumps, solar panels)	Compliance with climate policy, subsidies; dependence on grid and electricity sources
Electricity	Easy availability, no need for storage; high energy intensity, emissions dependent on energy mix	No need for fuel installation; high electricity costs	Flexibility, ability to integrate with RES; emissions dependent on mix, pressure for zero-carbon
District heating	Central management, high system efficiency; transmission losses, dependence on infrastructure	Stable prices, no need for individual investments; connection and subscription costs	Compatibility with urban policy and EU decarbonization; risk of increased costs and environmental requirements

.

The heat sources were then compared pairwise according to the nine-point scale proposed by Saaty [59]. All heat sources were compared among themselves according to three criteria: energy performance, cost performance, and future performance. All evaluations presented are the authors’ subjective assessments, based on the descriptive data provided in Table 8. The sample size of experts consulted is small; however, such sample sizes are not uncommon in the literature on expert surveys (e.g., [65]). Calculations were carried out for four alternative criterion weighting schemes: (a) each criterion assigned an identical weight; (b) Criterion I assigned 60% weight, with the remaining criteria each assigned 20%; (c) Criterion II assigned 60% weight, with the remaining criteria each assigned 20%; and (d) Criterion III assigned 60% weight, with the remaining criteria each assigned 20%. The results are presented in Figure 6.

3.3. Result of Fuel Analysis

The results of the AHP analysis are presented in Figure 5; these illustrate the priority index assigned to each heating source. Across almost all weighting scenarios, renewable energy sources (RESs) and biomass obtained the highest priority values or one of the highest importance, reflecting their strong alignment with sustainability objectives and long-term energy policy targets. The only exception occurs in the scenario where “energy performance” is assigned the highest weight (60%), in which case, the relative advantage of RESs decreases. The greatest margin of preference for RESs over other heating sources is observed when the “future performance” criterion receives the highest weighting, underscoring the importance of forward-looking energy considerations. Conversely, fossil-based options demonstrate declining relevance in future heating strategies, largely due to their high environmental costs and the decarbonization imperatives set by the European Union. The ranking confirms a strategic shift toward clean and electrified heating technologies, with RESs emerging as the most resilient option within the multi-criteria decision-making framework.

4. Case Study—Optimization of Thermal Modernization for a Model Single-Family House

4.1. Thermal Modernization Assumptions

This chapter presents a case study-based cost and primary energy analysis of a representative single-family detached, two-story residential building erected in the 1970s in Poland. The house has the form of a cube with a usable area of 150 m² and was built using traditional technology. The so-called “Polish cube” houses were built over a period of almost thirty years, beginning in the 1960s. The landscape of Polish villages, towns, and most cities is still largely shaped by older cube-shaped buildings. Cube-shaped houses were built under building regulations that limited all individualistic features to a minimum. Currently, this type of house is eagerly modernized due to its wide adaptability to current aesthetic and energy requirements [66].

Using national construction cost databases estimates, investment needs for meeting EPBD thresholds have been calculated. The case study illustrates the present and future costs connected with energy supply choices. The research draws upon current EU renovation practices, EPBD legal frameworks, and real-world implementations across Europe to offer recommendations for effective large-scale modernization in Poland. Poland’s long-term renovation strategy, developed in alignment with EU requirements, presents a roadmap for modernizing the national building stock. The strategy targets three main renovation periods: 2021–2030, 2031–2040, and 2041–2050. For each period, the expected number of completed renovations is specified, including both basic and deep renovations.

The long-term building renovation strategy presents the so-called recommended scenario, which assumes the rapid implementation of the first stage of thermal modernization of buildings from the worst energy efficiency ranges combined with the popularization of deep thermal modernization in the coming years and, subsequently, the dissemination of a high standard of renovation on a market scale. This scenario assumes that by 2050, 65% of buildings will achieve an EP index of no more than 50 kWh/(m²·year), and 22% of buildings will achieve an EP index ranging from 50 to 90 kWh/(m²·year). The remaining 13% of buildings, which for technical or economic reasons cannot be modernized so deeply, will achieve an EP index in the range of 90–150 kWh/(m²·year). To sum up, the recommended scenario seems to be justified with the current building resources in Poland and leads to a gradual shift in the building layout towards the targeted low-EP values.

The strategic goals for building performance improvements are aligned with EU LTRS mandates:

• By 2027, renovation of buildings with EP > 330 kWh/m²·year (classes F and G);
• By 2035, renovation of buildings with EP > 230 kWh/m²·year (classes E and below);
• By 2045, renovation of buildings with EP > 150 kWh/m²·year (classes D and below);
• By 2050, the majority of buildings should reach class A to C (EP ≤ 90 kWh/m²·year), with 65% achieving EP ≤ 50.

The adopted range of primary energy demand values is presented in

Table 9. Adopted ranges of primary energy demand [kWh/m²·year].

Energy Class	G	F	E	D	C	B	A
Primary energy demand [kWh/m2·year].	>450	330–450	230–330	150–230	90–150	50–90	<50

.

4.2. Analysis of Heat Sources for the Analyzed Single-Family House

The analysis aims to assess the heat sources available for a single-family house. The TOPSIS (technique for order preference by similarity to ideal solution) method was selected for the analysis. The TOPSIS method is one of the most popular methods for solving discrete multi-criteria decision-making problems. It is used to rank (or sort) decision alternatives based on their similarity to an ideal solution which represents the most desirable option. This is achieved by minimizing the distance to the ideal solution (the reference ideal solution) while maximizing the distance from the anti-ideal solution (the reference anti-ideal solution). Distances between each alternative and the ideal and anti-ideal solutions are calculated, and these distances are used to determine a value. The data presented in

Table 10. Parameters considered in the TOPSIS evaluation.

Energy Source	Ecology	EP [kWh/m2 Year]	Price of 1 kWh (EUR)	Price 2055r. Increase [%]
Ground heat pump	5	93.90	0.06	60%
Air heat pump	5	110.47	0.08	60%
Fossil fuel	3	135.13	0.11	60%
Wood pellets	2	31.97	0.08	60%
Coal	1	155.67	0.07	397%
Gas	3	135.13	0.10	101%
Electricity	4	334.31	0.25	20%
District heating	4	96.91	0.16	60%

were used for the TOPSIS analysis. The resulting rankings provide a structured basis for identifying the most economically and environmentally advantageous heating option under the defined evaluation criteria.

The evaluation of heating systems was conducted using the TOPSIS method, which enables the ranking of alternatives based on their proximity to an ideal solution. Four criteria were adopted for the analysis:

• Ecology (environmental impact);
• Primary energy demand (EP) in kWh/m²·year;
• Current energy price;
• Projected price increase by 2055.

The ecology criterion primarily accounted for greenhouse gas emissions, with particular emphasis on CO₂. It was evaluated using a five-point scale, where one represented the lowest performance (highest emissions) and five the highest performance (lowest emissions). Heat pumps, both ground and air source, were rated highest (score of five) due to their zero on-site emissions and high compatibility with renewable energy sources. Coal received the lowest score (one), reflecting its substantial environmental burden and high carbon intensity.

The remaining criteria were based on earlier energy performance and economic analyses of a reference single-family building. These included actual energy demand values, current energy prices, and long-term cost trends projected to 2055. Calculations were performed for five alternative criterion weighting scenarios: (a) all criteria assigned equal weight; (b) “ecology” weighted at 70%, with the remaining criteria each assigned 10%; (c) “EP” weighted at 70%, with the remaining criteria each assigned 10%; (d) “price” weighted at 70%, with the remaining criteria each assigned 10%; and (e) “price increase” weighted at 70%, with the remaining criteria each assigned 10%. The final ranking obtained through the TOPSIS method is presented in Figure 7.

When equal weights were assigned to all criteria, the air-source heat pump achieved the highest relative closeness to the ideal solution (0.67), followed closely by the ground-source heat pump (0.66) and electric heating (0.65). These systems not only provide favorable environmental performance but also demonstrate stability in operating costs, particularly with respect to projected energy price changes. Fossil fuel-based heating systems and gas boilers received intermediate scores (0.60 and 0.58, respectively), reflecting trade-offs between operational expenses, environmental impacts, and exposure to fuel price volatility. District heating (0.57) exhibited similar mid-range performance, with results strongly influenced by the fuel mix and overall system efficiency. By contrast, coal-fired heating ranked lowest (0.37), primarily due to its poor ecological rating, the highest EP value (155.67 kWh/m²·year), and a projected price increase of nearly 400% by 2055, making it the least favorable option from both an economic and environmental perspective.

These relationships become even more pronounced when the highest weighting is assigned to the “ecology” and “price increase” criteria, further amplifying the advantage of low-emission, price-stable technologies—particularly heat pumps and electric heating—over fossil fuel-based alternatives.

4.3. Analysis of Building Renovation Costs in Light of Planned Energy Requirements

To evaluate the cost implications of the LTRS, renovation costs were estimated for four key policy milestones—2027, 2035, 2045, and 2050—with each milestone aligned with specific primary energy thresholds. Generally, three stages of work are planned for the building: Stage 1—insulation of walls, roof, and the ceiling above basements and replacement of window and door joinery; Stage 2—modifications from variant 1 and mechanical ventilation with heat recovery (60%); Stage 3—modifications from variant 2 and the use of renewable energy sources (PV panels). The scope of improvements applied in each variant has been specifically designed to meet the assumed primary energy demand ranges imposed by the strategic goals for improving the energy efficiency of buildings described in Section 4.1, i.e., at least class E from 2028 onwards, class D from 2036 onwards, and class C from 2046 onwards, reaching the most energy efficient classes in 2050. Five renovation variants were defined for each model building, reflecting different scopes and timelines of energy efficiency improvements. Each variant was designed to meet the required non-renewable primary energy demand threshold but with varying strategies in terms of investment phasing and technological implementation:

• Variant 1—“Minimum–Delayed”

This scenario involves the minimum scope of work necessary to meet the required EP value, implemented at the latest possible dates. Wall, roof, and basement ceiling insulation, as well as the replacement of window and door joinery, are scheduled for 2034. Mechanical ventilation with 60% heat recovery efficiency is introduced in 2044, and photovoltaic (PV) panel installation is delayed until 2049.

• Variant 2—“Minimum–Phased”

Similar to variant 1 in terms of scope, this option distributes the renovation tasks over several years. The thermal envelope improvements (insulation and joinery replacement) are spread over the period 2030–2033. Mechanical ventilation with heat recovery is added in 2044, and PV systems are installed in 2049. This variant reflects a gradual approach to modernization, aiming to ease the financial burden.

• Variant 3—“Minimum–Early Start”

This variant implements the required scope of modernization as early as possible. The thermal envelope is upgraded in 2027, mechanical ventilation is added in 2030, and PV panels are installed in 2040. The goal is to maximize energy savings and performance benefits by frontloading the interventions.

• Variant 4—“Integrated Envelope and Ventilation”

In this scenario, the building envelope improvements and the installation of mechanical ventilation with heat recovery are implemented simultaneously in 2027, allowing for early and synergistic energy efficiency gains. PV panels follow later, in 2040.

• Variant 5—“Comprehensive–Immediate”

This is the most ambitious variant, in which all three modernization components—envelope insulation and joinery replacement, mechanical ventilation with 60% heat recovery, and PV panel installation—are completed simultaneously in 2027. This variant represents a deep, immediate retrofit strategy maximizing long-term energy and environmental benefits.

The analyses were carried out for three initial heating system configurations: buildings originally equipped with a coal-fired boiler, a gas-fired boiler, or an electric heating system.

CEIC data [67] for long-term interest rates in Poland are updated monthly and available from Jan 2001 to Feb 2025. The rate reached an all-time high of 11.86% in August 2001, and the lowest rate, 1.19%, was recorded in January 2021. Poland’s harmonized long-term interest rate was reported at 5.83% in Feb 2025, compared with 5.94% in the previous month. Based on these relationships, NPV values were calculated for all modernization variants under varying discount rate (r) assumptions ranging from 2% to 8%. The results are presented in

Table 11. NPV values for different heating options and variants calculated with assumption of different “r” rates; values provided in [EUR/m²].

Energy Source	Variants	NPV (r = 2%)	NPV (r = 3%)	NPV (r = 4%)	NPV (r = 5%)	NPV (r = 6%)	NPV (r = 8%)
Coal	Variant 1	784.82	691.28	612.43	545.58	488.59	397.63
	Variant 2	876.03	777.32	693.61	622.19	560.90	462.11
	Variant 3	572.56	533.09	498.95	469.19	443.04	399.32
	Variant 4	572.32	534.62	502.13	473.89	449.16	407.94
	Variant 5	437.28	415.24	396.50	380.37	366.31	342.87
Gas	Variant 1	659.77	588.83	528.32	476.41	431.62	358.92
	Variant 2	750.98	674.88	609.51	553.02	503.94	423.40
	Variant 3	526.39	495.62	468.51	444.46	422.99	386.26
	Variant 4	526.15	497.16	471.70	449.18	429.11	394.88
	Variant 5	411.35	395.63	381.84	369.60	358.62	339.57
Electricity	Variant 1	554.44	499.83	452.73	411.90	376.30	317.67
	Variant 2	645.65	585.87	533.92	488.51	448.62	382.15
	Variant 3	479.97	455.97	434.46	415.06	397.48	366.79
	Variant 4	480.05	457.83	437.95	420.07	403.88	375.67
	Variant 5	390.08	378.58	368.14	358.57	349.72	333.77

and illustrated in Figure 8. The range of discount rates was selected to reflect both historical variability and realistic future financing conditions in the Polish context.

Net present value (NPV) analyses were conducted for three initial heating system configurations: a single-family building equipped with a coal-fired boiler, a gas-fired boiler, and electric heating. For each configuration, five renovation variants were evaluated, differing in terms of implementation timing, investment phasing, and technological scope.

The results reveal a clear hierarchy of cost-effectiveness among the technologies. Electric heating, particularly in variant 5, emerged as the most economically viable solution. Gas boiler systems ranked moderately, demonstrating competitiveness with electric heating in scenarios with lower capital expenditures and favorable gas prices. In contrast, coal boiler systems proved to be the least cost-effective option, especially in extended or phased configurations such as variants 1 and 2, which include higher infrastructure and operational costs.

Across all technologies and variants, NPV values decrease linearly with increasing discount rates. However, while absolute NPV values diminish, the relative cost ranking of the variants remains largely stable. Even at a high discount rate (8%), the order of cost-effectiveness does not shift, underscoring the robustness of the comparative outcomes.

From a variant perspective, variant 5 consistently outperforms others within each heating category. This scenario involves the simultaneous implementation of all renovation measures at an early stage, resulting in the lowest investment burden over time and the most favorable economic performance. Conversely, variants 1 and 2, which delay or phase investments, are burdened by higher cumulative costs due to inflationary effects, extended inefficiencies, and more complex project staging.

These findings carry important investment implications. For new or renovated buildings with standard energy performance profiles, electric heating under variant 5 represents the most financially secure and future-proof strategy. Gas-based systems may be considered where infrastructure is available and gas prices are stable. However, coal-based heating, even in its most efficient form (variant 5), does not achieve cost parity with its gas or electric counterparts and thus cannot be justified economically under the assumptions applied.

The results presented above (Figure 8) provide a baseline understanding of the cost-effectiveness of different heating technologies and renovation variants under a range of discount rate assumptions. To further assess the robustness of these findings, a sensitivity analysis was conducted, examining the impact of varying macroeconomic and market conditions—particularly energy price trajectories on NPV results. Additional assumptions were applied in the later stage of the analysis, shown in

Table 12. Average energy prices change according to base assessment, assumption 1 and assumption 2.

Year	Average Energy Prices Change
	Base Assessment According to Research			Assumption 1	Assumption 2
	Coal	Gas	Electricity	All Energy Sources
2025	100%	100%	100%	100%	100%
2027	123%	106%	96%	104%	100%
2028	138%	110%	95%	106%	100%
2029	142%	111%	93%	108%	100%
2030	142%	111%	91%	110%	100%
2035	207%	127%	82%	120%	100%
2040	322%	156%	81%	130%	100%
2045	428%	183%	80%	140%	100%
2050	474%	195%	79%	150%	100%
2055	497%	201%	78%	150%	100%

and Figure 9, which illustrates the relationship between the discount rate and NPV for three heating technologies—coal, gas, and electricity—across three sets of assumptions: the base assessment, assumption 1, and assumption 2. In all cases, NPV values decrease as the discount rate increases, meaning that the present value of future costs is reduced under higher capital cost assumptions. However, the relative ranking of technologies remains stable across most discount rates within each assumption set.

In the base assessment, coal shows the highest NPV at low discount rates (r = 2–3%), indicating the highest total cost among the three technologies in present value terms. Gas performs slightly better, while electricity consistently exhibits the lowest NPV, thus representing the most cost-efficient option in this reference case.

Under assumption 1, which foresees a linear increase to 150% in the 2025 energy price values by 2050, the pattern changes. Electricity remains the lowest-cost solution at lower discount rates, but the gap between it and gas narrows, while coal’s costs are significantly higher across the entire discount rate range. Assumption 2, which projects no additional energy source price changes, reinforces the tendency detected in the results of assumption 1: electricity and gas maintain lower NPVs compared to coal. This suggests that the choice of heating technology is sensitive not only to discount rate assumptions but also to fuel price developments and technology cost dynamics.

The three energy price scenarios were considered in the analysis, differing in their long-term fuel price trajectories and underlying assumptions:

Base assessment (research-derived forecast): strong coal price escalation (up to ~500% of the 2025 baseline by 2055), moderate gas price growth, and a gradual decrease in electricity prices relative to other fuels, driven by efficiency gains and renewable integration.

Assumption 1.

uniform moderate price growth for all fuels, reaching ~150% of 2025 levels by 2055, resulting in smaller cost differentials between fuel types.

Assumption 2.

Constant energy prices over time, isolating the effect of investment timing and efficiency measures from market volatility.

Overall, the sensitivity analysis confirms that while discount rate assumptions affect the magnitude of NPVs, the cost hierarchy between technologies and strategies is more strongly determined by long-term energy price trajectories. In the base assessment, which reflects the research-based forecast of substantial fossil fuel price increases by 2050 alongside a gradual decline in electricity prices, electricity-based systems—particularly when combined with early and integrated renovation measures—consistently achieve the lowest cost burden. Under the same scenario, coal-based systems represent the most expensive option, with costs escalating sharply in response to fossil fuel price growth.

In contrast, under assumption 1 and assumption 2, coal-based systems emerge as the most economically favorable and least costly solution. In these two scenarios, electricity-based systems shift to the opposite end of the spectrum, becoming the most expensive option from an economic perspective.

5. Discussion

This study evaluated the economic and environmental viability of multiple building renovation strategies in the context of thermal modernization, including an analysis of heating systems using a combination of net present value analysis, analytic hierarchy process, and the TOPSIS decision-making method together with energy performance analysis. These complementary approaches provided both a quantitative and qualitative basis for assessing long-term renovation investments aligned with the EU’s decarbonization goals.

NPV calculations revealed clear differences in economic performance across renovation variants and heating sources. In general, variant 5—characterized by the simultaneous implementation of all modernization measures (thermal insulation, mechanical ventilation with heat recovery, and PV installation) in the first year—consistently delivered the lowest investment burden over time. This variant outperformed phased approaches (i.e., variants 1 and 2), which were negatively affected by delayed benefits, higher operational inefficiencies, and additional infrastructure costs. Early, comprehensive renovations enable building users to benefit from reduced energy consumption and lower operational costs from the outset, thus improving long-term cost effectiveness. For the single-family “Polish cube” house, early and integrated retrofitting can reduce primary energy consumption by up to approximately 80% compared with delayed, phased approaches, thereby further strengthening the economic and environmental case for front-loaded modernization strategies.

Furthermore, increasing the discount rate resulted in a linear decrease in NPV across all technologies, yet the relative order of variant profitability remained unchanged. Even at a high discount rate of 8%, variant 5 retained its dominant position, confirming its resilience under various financial conditions.

The heating system type was also a critical factor affecting overall economic viability. Electric heating systems, especially when combined with PV and implemented under variant 5, achieved the best NPV outcomes. Their strong performance reflects relatively low installation costs and growing alignment with renewable energy trends. Gas-based systems provided moderate economic results, with competitiveness strongly dependent on the availability of infrastructure and the future stability of gas prices. In contrast, coal-based systems were consistently the least cost-effective, particularly under variants 1 and 2, due to high emissions, operational complexity, and projected fuel price increases.

The findings suggest that fuel switching, particularly away from coal, is not only environmentally necessary but also economically justified. Electrification—supported by renewable integration—emerges as a resilient strategy across all analytical dimensions.

The AHP method enabled a weighted ranking of heating sources based on multiple criteria, including cost, emissions, and technical feasibility. Renewable energy sources, such as heat pumps and electric systems, received the highest preference values, while coal and other fossil fuels ranked lowest, reflecting their environmental burden and long-term uncertainty. This outcome reinforces earlier economic conclusions and aligns with current EU policy directions.

The TOPSIS analysis further validated these results by ranking systems according to four criteria: ecology, primary energy demand, current energy price, and projected price increase by 2055. Air-source and ground-source heat pumps were consistently ranked at the top due to their favorable environmental profiles, energy efficiency, and long-term cost stability. Electricity-based heating also scored highly, and coal was placed at the opposite end of the ranking, with the worst ecological rating and a projected cost increase of nearly 400%, making it unsustainable both financially and environmentally. Gas, biomass, and district heating achieved intermediate scores, reflecting a balance of moderate costs and variable ecological performance depending on source mix and implementation conditions.

The combined analysis underscores the importance of early and integrated renovation strategies, particularly for buildings constructed before 1990 that predominate across Poland and are characterized by low energy efficiency. The selected single-family house model was chosen due to its high representativeness within the Polish building stock. As supported by references from the literature, this building type was constructed on a massive scale in Poland during the 1960s–1980s. Owing to its prevalence and architectural characteristics, it is currently among the most frequently targeted for thermal retrofitting, making it a suitable and relevant case study for evaluating modernization strategies with broad applicability. In future research, the authors intend to expand the scope of the analysis to include additional building types, thereby providing a more comprehensive assessment across the diversity of the national building stock. This applies primarily to single-family buildings, as 60% of them use fossil fuels as their main heating source. These technical and operational deficiencies result in elevated energy consumption and contribute significantly to deteriorating air quality in Poland, particularly during the heating season. Due to Poland’s diverse climatic conditions, it is recommended that performance standards be adapted to specific climate zones—particularly in colder areas such as zone V. Introducing climate-sensitive benchmarks would enhance both the equity and feasibility of national renovation strategies, ensuring that all regions can realistically contribute to energy efficiency and decarbonization targets. From both economic and environmental perspectives, the most effective approach is to implement deep retrofits early and comprehensively. Policymakers should prioritize incentive schemes, regulatory frameworks, and financial tools that support this model. The analysis also emphasizes the urgent need for phasing out coal heating in residential buildings, as it represents the least favorable option under every criterion. Additionally, the varying economic viability of gas systems highlights the importance of regional context, energy market forecasts, and infrastructure availability.

These analytical outcomes provide a strong foundation for translating technical findings into actionable strategies. Building on the evidence from economic modeling and multi-criteria assessments, the implications extend beyond technical feasibility to inform broader policy, investment, and renovation phasing. All analyses undertaken by the authors show important implications for policymakers and investors. Electrification, supported by on-site renewables, represents a future-proof strategy that can meet both climate targets and economic efficiency objectives. Renovation programs should prioritize early, integrated retrofitting approaches and include financial mechanisms to overcome the upfront cost barriers, particularly in vulnerable segments of the housing stock. Although the present study focuses on the economic assessment of modernization pathways, it does not explicitly address the practical barriers to their implementation. In reality, factors such as owner–occupant decision-making, policy uncertainty, upfront capital constraints, and contractor availability may limit the adoption of cost-optimal solutions, particularly for early comprehensive retrofits such as variant 5. These challenges are often more pronounced in older housing stock located in rural or low-income areas, where social and economic constraints can be significant. While an in-depth investigation of these aspects lies beyond the scope of this paper, their potential influence on feasibility warrants attention. Future research will therefore aim to incorporate qualitative analyses and stakeholder perspectives to better understand and address these barriers. At the same time, national strategies must recognize regional disparities and infrastructure constraints when promoting fuel switching.

6. Conclusions

In conclusion, the study provides strong evidence that early, deep renovation combined with clean energy heating technologies constitutes the most viable path forward for reducing building-sector emissions and ensuring long-term affordability. These conclusions support the goals of the European Green Deal and the revised Energy Performance of Buildings Directive, and they offer practical guidance for shaping the upcoming National Building Renovation Plans due by 2026; in addition, these conclusions can inform national decisions regarding heating technology support, renovation phasing, and prioritization in achieving the EU-wide 2050 zero-emission building stock target. In the context of Poland’s building sector transformation, long-term renovation strategies play a crucial role, serving as a key policy instrument for aligning modernization efforts with the decarbonization targets set out in the European Green Deal and the revised Energy Performance of Buildings Directive. Their integration with national implementation plans ensures that renovation activities are strategically phased, financially supported, and technically feasible.

Future research directions may focus on the development of a comprehensive mathematical decision-support model that will integrate both ecological and economic parameters, enabling policymakers, designers, and investors to systematically evaluate and select the optimal renovation variant tailored to specific building conditions, environmental goals, and financial constraints.