Assessment Methods for Building Energy Retrofits with Emphasis on Financial Evaluation: A Systematic Literature Review

Abstract

The building sector remains one of the largest contributors to global energy consumption and CO₂ emissions, yet selecting optimal retrofit strategies is often hindered by inconsistent evaluation practices and limited integration of environmental and social impacts. This review addresses that gap by systematically analyzing how various assessment methods are applied to building retrofits, particularly from a financial and environmental perspective. A structured literature review was conducted across four major scientific databases using predefined keywords, filters, and inclusion/exclusion criteria, resulting in a final sample of 50 studies (green colored citations of this paper). The review focuses on the application of Life Cycle Cost Analysis (LCCA), Cost–Benefit Analysis (CBA), and Life Cycle Assessment (LCA), as well as additional indicators that quantify energy and sustainability performance. Results show that LCCA is the most frequently used method, applied in over 60% of the studies, often in combination with LCA (particularly for long time horizons). CBA appears in fewer than 25% of cases. More than 50% of studies are based in Europe, and over 60% of case studies involve residential buildings. EnergyPlus and DesignBuilder were the most common simulation tools, used in 28% and 16% of the cases, respectively. Risk and uncertainty were typically addressed through Monte Carlo simulations (22%) and sensitivity analysis. Comfort and social impact indicators were underrepresented, with thermal comfort included in only 12% of studies and no formal use of tools like Social-LCA or SROI. The findings highlight the growing sophistication of retrofit assessments post-2020, but also reveal gaps such as geographic imbalance (absence of African case studies), inconsistent treatment of discount rates, and limited integration of social indicators. The study concludes that future research should develop standardized, multidimensional evaluation frameworks that incorporate social equity, stakeholder values, and long-term resilience alongside cost and carbon metrics.

1. Introduction

According to data from the United Nations Framework Convention on Climate Change (UNFCCC) [1], in order to limit global temperature rise to 1.5 °C—thus meeting the commitments set by the Paris Agreement—global greenhouse gas (GHG) emissions must be reduced by 43% by 2030. Europe, in particular, has demonstrated strong political will toward fulfilling these commitments, having initiated the European Green Deal with the overarching objective of achieving climate neutrality (“net zero”) by 2050 [2]. The ambitious timeline for these targets underscores the urgency of the situation.

Nevertheless, the latest United Nations Environment Programme (UNEP) Emissions Gap Report reveals that progress has been limited, based on the most recent assessment of 107 countries that have pledged emission reduction targets [3]. In terms of the contribution of the building sector to this effort, the European Commission, based on Eurostat and European Environment Agency (EEA) data, presents the following findings [4]:

• Approximately 40% of total energy consumption in the European Union is attributed to buildings;
• More than one-third of energy-related GHG emissions in the EU originate from the building sector;
• Around 80% of energy used in EU households is dedicated to heating, cooling, and domestic hot water production.

Furthermore, the same UNEP Emissions Gap Report [3] highlights stark disparities in per capita emissions among countries. As stated in the executive summary, “average per capita GHG emissions are nearly three times the global average in the United States and the Russian Federation while remaining significantly below the global average in the African Union, India, and the least developed countries. Consumption-based emissions also remain highly unequal”.

Building energy retrofits—particularly those targeting operational energy use—offer one of the most immediate and scalable strategies to reduce emissions in the sector. By improving thermal performance, optimizing energy systems, and integrating renewables, retrofits can significantly lower a building’s carbon footprint and contribute meaningfully to bridging the emissions gap.

Typical retrofit interventions include building envelope upgrades (e.g., insulation, window replacements), HVAC system improvements, lighting enhancements, and, increasingly, the integration of renewable energy systems. These measures vary in cost and impact, and their evaluation requires a structured methodological approach.

It is important to note that the literature includes some gaps and lacks consistency. For instance, while previous studies have provided valuable insights through their bibliographical research on the subject [5,6], certain aspects remain underexplored, such as how social criteria are integrated into the evaluation process, or how cost-optimal and environmentally optimal solutions can be balanced. What distinguishes the present study is its combined focus on financial, environmental, and emerging social evaluation criteria, synthesized across a structured sample of recent case studies. Unlike prior reviews, which tend to focus on one or two dimensions, this work identifies methodological interdependencies, maps shared indicators (e.g., NPV, GWP), and highlights research blind spots—particularly the limited use of social metrics and lack of geographic diversity. This integrated, multidimensional lens allows for a more holistic understanding of retrofit assessment frameworks.

The aim of this study is to explore the most recent literature concerning building energy retrofits, with a particular focus on evaluation methods emphasizing economic efficiency. However, the review revealed that energy retrofit assessments cannot be based solely on economic performance; other dimensions of performance improvement must also be considered. Through the careful selection and in-depth analysis of relevant literature, the novelty of this study lies not only in its comprehensive mapping of existing retrofit evaluation methods but also in its structured comparison of financial (LCCA, CBA), environmental (LCA), and risk-based approaches. In contrast to previous reviews that focus on isolated techniques or geographic regions, this work synthesizes technical and socio-economic dimensions, highlights underrepresented factors such as social impact indicators, and reveals methodological gaps in global representation and standardization. As such, the study contributes a multidimensional perspective that is essential for developing future retrofit frameworks aligned with sustainability, policy goals, and equitable energy transition.

The review is grounded in widely applied evaluation frameworks such as Life Cycle Costing (LCC), Life Cycle Assessment (LCA), and Cost–Benefit Analysis (CBA), which collectively inform financial and environmental decision-making. In addition, the present study examines the treatment of social sustainability aspects—including affordability, user comfort, and, where available, equity and social acceptability—as emerging indicators within retrofit evaluation models.

Initially the broader theoretical context is presented in Section 2, and the methodology steps are analyzed in Section 3. Next, Section 4 displays the results of the study accompanied with useful conclusions, leading to Section 5, where key trends are summarized, challenges are highlighted, and future research topics are proposed.

The objective is to identify and summarize patterns, connections, and trends that may prove valuable for future research and contribute to the acceleration of the energy transition in the building sector. Key research questions such as the following are expected to be answered via the current research: (i) What are the predominant evaluation methods used in the economic and environmental assessment of building energy retrofits? (ii) How consistently are cost, environmental, and social indicators integrated into decision-making frameworks? (iii) What are the current gaps and future opportunities for developing more holistic and transferable assessment models?

2. Theoretical Background

2.1. Sustainability and Building Retrofit

The concept of building retrofit involves the enhancement or addition of features to existing structures that were not part of the original construction, targeting systems such as heating, cooling, insulation, and lighting [7]. According to Keppel [8], retrofitting aims to deliver environmental benefits, reduce costs, enhance community well-being, and preserve asset value. In the EU, these measures are central to achieving carbon neutrality in buildings by 2050 [9]. JLL company categorizes retrofits as “light”, “mechanical, electrical & plumbing”, and “whole”, depending on their scope [10]. The notion of sustainability, rooted in the Brundtland Report [11] and supported by further discourse [12], emphasizes intergenerational equity, thus shaping the global sustainability agenda through events such as the 1992 Earth Summit in Rio de Janeiro, which subsequently led to further landmark events, as illustrated in Figure 1.

This study approaches building retrofits through the lens of the three foundational sustainability pillars—social, economic, and environmental—commonly found in the literature [13]. While the focus lies on economic evaluation methods such as LCC and CBA, environmental metrics (via LCA) and social indicators (via Social-LCA) are also considered, particularly those relating to thermal comfort and energy poverty. The interdependencies among these pillars reveal how one retrofit measure can yield multi-dimensional benefits. Despite their widespread use, the theoretical grounding of these pillars is still debated, as noted by [14].

2.2. Financial Evaluation and Building Retrofit

Economic analysis is of critical importance in the process of energy upgrading of a building. Considering that the high installation cost can significantly influence the decision to adopt retrofit measures [15], it becomes evident that due attention must be paid to the development of tools and methods for accurately documenting and interpreting this cost. According to the study in [16], the main obstacle in implementing building retrofits lies in the owner’s reluctance, primarily due to the high upfront costs. Specifically, within the European Union, the revised Energy Performance of Buildings Directive (EPBD) states, among other points, that energy upgrades of buildings should aim at achieving “cost-optimal levels” [17].

This study focuses on four economic evaluation approaches, as follows:

• Cost–Benefit Analysis (CBA);
• Life Cycle Cost Analysis (LCCA);
• Life Cycle Assessment (LCA);
• Risk Management.

All of the above approaches align with the direction set by the aforementioned EPBD, each bearing distinct characteristics that will be discussed in the following sections.

2.2.1. CBA

According to the summary presented in study [18] based on the book Cost–Benefit Analysis: Concepts and Practice, Fourth Edition by Anthony E. Boardman, David H. Greenberg, Aidan R. Vining, and David L. Weimer, Cost–Benefit Analysis (CBA) is defined as a decision-making tool characterized by the systematic listing of impacts as benefits (advantages) and costs (disadvantages), the valuation of which is carried out in monetary terms with predefined weights. The proposed scenario is then assessed against the baseline scenario using either net benefits (benefits minus costs) or the benefit–cost ratio. This methodology is employed, among other domains, in the evaluation of the economic viability and efficiency of a specific investment or building retrofit. Its rationale is to compare the total costs of a retrofit (e.g., construction expenses, material costs, labor, etc.) with the expected benefits (e.g., energy savings, increased property value, improved comfort, reduced operating expenses, etc.).

According to Harvard Business School [19], the CBA methodology consists of the following steps:

• Establishing the analytical framework: This stage involves defining the analyst’s scope, determining the objectives of the analysis, and selecting the metrics that will be used to compare costs and benefits;
• Identification of costs and benefits: Considered costs include direct costs (those directly associated with the production and development of a product or service or the execution of a project or business decision, e.g., labor, construction, materials) and indirect, intangible, or opportunity costs (e.g., public fees/licenses, design costs, architect fees, increased user satisfaction, improved image and reputation in the case of commercial building upgrades);
• Assignment of a value to each cost and benefit: Each cost and benefit is expressed in a common metric unit to enable accurate comparisons. Indirect and intangible costs and benefits are naturally more difficult to quantify;
• Calculation of the total value of each cost and benefit and comparison: This step involves computing the net value (benefits minus costs) and making a decision based on the initial framework and whether the initial objectives were achieved.

Following the Harvard Business School approach, the CBA process for building retrofits can be summarized as follows:

• Definition of objectives for evaluating retrofit measures and selection of appropriate indicators and metrics;
• Estimation of all expected benefits and cost components from the retrofit, including economic, environmental, and social aspects;
• Quantification of the variables used in the study (e.g., thermal comfort);
• Calculation of net benefits (benefits minus costs) and comparison of values to assess the economic feasibility of the retrofit. Decision-making is based on the analysis outcomes and whether initial goals (e.g., maximum possible CO₂ emissions reduction) have been achieved.

This analysis supports rational decision-making and the assessment of investment value in building retrofits, taking into account both economic and non-economic parameters.

Within the CBA framework, various indicators and sub-methods are employed, as confirmed by the literature reviewed:

• Break-Even Point Analysis;
• Return on Investment (ROI);
• Internal Rate of Return (IRR);
• Net Present Value (NPV);
• Loan Life Coverage Ratio (LLCR);
• Cost–Benefit Ratio (CBR);
• [Discounted] Payback Period;
• Rent Increase Benefit;
• Energy Cost Benefit;
• Productivity Cost Benefit;
• Levelized Cost of Energy (LCOE);
• Residual Value.

Below is a brief explanation of the most commonly used financial indicators in the context of CBA:

• Payback Period (PBP): This indicator represents the time it takes for the initial investment in a retrofit project to be fully recovered through the annual net benefits (e.g., energy savings, maintenance cost reductions). It is calculated by summing the net annual benefits until they equal the upfront investment. While it provides a simple measure of risk, PBP does not account for the time value of money or post-payback profitability;
• Return on Investment (ROI): ROI is a profitability ratio used to evaluate the efficiency of an investment. It is typically calculated as the net benefit (total return minus investment cost) divided by the initial investment cost, expressed as a percentage. ROI enables quick comparison of different retrofit options, but does not consider time horizons or cash flow distribution;
• Internal Rate of Return (IRR): The IRR is the discount rate at which the Net Present Value (NPV) of all future cash flows (both incoming and outgoing) from a retrofit investment equals zero. It reflects the effective annual rate of return expected from the investment and is often used for comparing mutually exclusive retrofit options. A project is typically considered financially viable if the IRR exceeds the chosen discount rate;
• Net Present Value (NPV): NPV calculates the difference between the present value of total benefits and the present value of total costs over the retrofit’s lifecycle, using a specified discount rate. A positive NPV indicates a financially worthwhile investment. NPV is widely used due to its ability to incorporate the time value of money, long-term impacts, and varying cost and benefit streams;
• Break-Even Point: The break-even point marks the threshold at which cumulative benefits equal cumulative costs. It can be expressed in time (years) or output (e.g., energy saved). Reaching this point signifies that the investment has neither incurred loss nor profit. In energy retrofits, the BEP is often used to communicate risk exposure and benefit timing to stakeholders.

2.2.2. LCCA

According to the Whole Building Design Guide (WBDG) [20], Life Cycle Cost Analysis (LCCA) for building upgrades is a methodology that estimates the total cost of a building or project over its entire lifespan. This includes acquisition and initial investment costs, operating expenses, maintenance costs, upgrades, financial costs (e.g., loan interest payments), dismantling or decommissioning expenses, as well as non-monetary and intangible benefits and costs—an approach aligned with CBA in this respect.

Focusing on this last point, LCCA is particularly useful in comparing different retrofit options by evaluating not only the initial investment but also the long-term benefits and savings, such as reduced energy consumption, increased building value, and enhanced functionality. One illustrative example cited by the WBDG [20] is the “benefit derived from a quiet HVAC system or the productivity gains resulting from improved lighting. By nature, such effects are external to LCCA, but if they are significant, they should be incorporated into the final investment decision.”

Thus, LCCA enables facility managers and investors to make more informed and sustainable decisions regarding building retrofits, with the aim of maximizing both economic efficiency and long-term sustainability.

Historically, LCCA was first introduced for investment evaluation purposes in the mid-1960s with the support of the U.S. Department of Defense and was later applied in the automotive and engineering sectors [21].

Within the framework of Life Cycle Costing, several indicators and sub-methods are employed, as confirmed in the literature reviewed:

• Internal Rate of Return (IRR);
• Net Present Value (NPV);
• Net Savings Method;
• [Discounted] Payback Period;
• Discounted Cash Flow (DCF);
• Total Cost of Ownership (TCO);
• Global Cost.

It is evident that some evaluation metrics are shared between LCCA and CBA, reflecting the partial overlap between the two approaches. Some scholars even consider the LCCA model a variant of CBA, one that focuses exclusively on cost elements [22].

2.2.3. LCA

According to the international standard ISO 14040:2006 Environmental management—Life cycle assessment—Principles and framework [23], Life Cycle Assessment (LCA) is a methodology for evaluating the environmental impacts of a building throughout its entire life cycle. This includes the extraction of raw materials, construction, operation, maintenance, and ultimately demolition or reuse of materials. The objective of LCA is to identify and quantify impacts related to energy consumption, CO₂ emissions, water consumption, and other environmental indicators during the various phases of a building’s life cycle in order to support decision-making for sustainable and efficient upgrades [24].

Based on the aforementioned standard [23], which is also adopted by the European Platform on LCA (EPLCA) [25], the LCA process is structured into four key phases:

• Goal and Scope Definition: In this phase, the purpose of the study is defined, the methodology and modeling approach are selected, system boundaries and data quality requirements are established;
• Life Cycle Inventory (LCI): This phase involves data collection and computational procedures aimed at quantifying inputs and outputs of the studied system. These include energy, raw materials, and other natural resources as inputs, and products, by-products, wastes, and emissions to air, water, and soil as outputs, along with other environmental aspects;
• Life Cycle Impact Assessment (LCIA): In this phase, the results of the LCI are linked to categories and indicators of environmental impacts. This stage is illustrated descriptively in Figure 2;

4.

Life Cycle Interpretation: The results of the LCI and LCIA (phases 2 and 3) are interpreted in accordance with the defined goal and scope (phase 1). This step includes completeness, sensitivity, and consistency checks.

Through this analysis, designers and investors can identify opportunities to reduce environmental impacts and increase energy efficiency.

Within the framework of Life Cycle Assessment, various indicators and sub-methods are employed, as confirmed by the literature reviewed:

• Life Cycle Carbon Emissions Assessment;
• Life Cycle Inventory (LCI);
• Quantity Index;
• Global Warming Potential (GWP);
• Embodied Carbon;
• Delivered Energy.

It is worth noting that, compared to the previous two approaches (CBA and LCCA), LCA is more rooted in environmental considerations than economic ones.

To synthesize the key characteristics of the three main evaluation methods,

Table 1. Comparative Overview of LCCA, CBA, and LCA Methods in Building Retrofit Evaluations.

Ev. Method	Key Strengths	Limitations	Typical Application in the Literature
LCC	Enables long-term cost optimization; widely applicable; transparent and replicable	Ignores non-financial factors such as environmental or social impact; sensitive to input assumptions	Most frequently applied method in retrofit evaluations focused on cost-effectiveness
CBA	Captures broader economic, social, and policy outcomes; adaptable to different retrofit contexts	Monetizing intangible impacts (e.g., quality of life) can introduce subjectivity; discount rate selection is critical	Applied in policy-driven and multi-criteria assessments
LCA	Comprehensive environmental profiling; aligned with sustainability goals	Does not evaluate financial viability; highly data intensive; less standardized in retrofit studies	Used to complement financial tools; prominent in environmentally focused studies

below summarizes their comparative strengths, limitations, and typical use cases as drawn from the reviewed literature.

Among the three, LCCA appears most frequently in the reviewed literature, particularly in studies focused on cost-optimality. However, CBA and LCA are often employed in more holistic frameworks that account for broader societal or environmental goals, highlighting a growing trend toward integrated approaches.

While LCCA and CBA are primarily economic evaluation methods—focusing on life-cycle costs and broader societal Cost–Benefit outcomes—LCA is designed to quantify environmental impacts across the entire life cycle of a building or retrofit intervention. Although these tools assess different dimensions, they are increasingly applied in combination (e.g., LCCA-LCA or CBA-LCA) to provide a more integrated and holistic decision-making framework.

In recent years, another critical dimension in retrofit assessments has emerged: the explicit consideration of risk and uncertainty. This includes sensitivity analysis, probabilistic modeling, and other tools that support financial evaluations by addressing variability in inputs such as energy prices, investment costs, and discount rates. Section 2.2.4 introduces these risk management approaches, which are not standalone evaluation methods but rather complementary tools that enhance the robustness and credibility of financial and environmental assessments, particularly in retrofit scenarios where long-term outcomes are uncertain.

2.2.4. Risk Management

As described by the Center for Construction and Architectural Excellence (CCAE) [27], Risk Management in a project—in the context of this study referring to building retrofits—pertains to the process of identifying, assessing, and addressing potential risks that may arise during the renovation process of a building. This process involves the analysis of technical, financial, environmental, and legal parameters, as well as the estimation of both the likelihood and impact of each risk. The objective of Risk Management is to mitigate adverse effects and to ensure the safety, quality, and sustainability of the renovation project.

Specifically, in terms of the economic dimension of retrofitting projects, the process includes the analysis of potential risks such as unforeseen expenses, delays in project completion, market fluctuations, and legal disputes, along with the development of strategies and action plans to minimize the negative consequences of these risks [28].

Within the framework of Risk Management, various indicators and sub-methods are used, as confirmed by the reviewed literature and summarized below:

• Transaction Cost Theory
  As summarized in [29], the Transaction Cost Theory, introduced by Nobel Laureate economist Ronald Coase in 1937, posits that markets incur costs beyond production itself, referred to as transaction costs. These include the cost of information search, negotiation, contracting, and enforcement. Williamson later expanded this theory by identifying three primary factors that influence transaction costs: asset specificity [30], uncertainty, and transaction frequency [31]. Studies such as [32,33] demonstrate the integration of Transaction Cost Theory into Risk Management, the latter focusing on Supply Risk Management in particular.
• Borda Count of Risk j (bj)
  The Borda algorithm, also known as the Borda count voting method, was initially used in voting theory to rank candidates based on the totality of their positions across ballots, rather than solely on first-place votes [34]. Although there are earlier references to its use, it was named after the French mathematician and engineer Jean Charles de Borda in 1770 [35]. Garvey later incorporated the Borda algorithm into the Risk Matrix [36] to reduce ties, introduce control over scoring in the matrix, and detect shifts in the likelihood or severity of consequences that could constrain critical risks [37]. The formula for calculating the Borda count of risk j is given as follows:
  Bj = ∑k(N − rjk)

  (1)
  where
  N: total number of risks
  rjk: number of risks with higher scores than risk j under criterion k
  j = 1, 2, …, N|k = 1 and 2
• Damage Indicator
  This is one of the indicators proposed by the EEnvest platform [38] for the evaluation of technical risks. According to the report “Recommendations for minimizing technical risks” [39], damage is defined as a potential disturbance due to malfunction, failure, or structural breakdown of building components. It is calculated as a percentage of the investment.
• Energy Gap Indicator
  Also proposed by EEnvest [38], this technical indicator reflects the discrepancy in energy performance between planned and actual measured energy consumption. It is expressed as a percentage of energy performance and is influenced by multiple factors, including some damage-related parameters [39].
• Payback Time Indicator
  This is the third indicator derived from the EEnvest platform [38] and falls under the category of financial indicators. It represents the time required to recoup the initial cost of an investment. Investors typically prefer shorter payback periods compared to longer ones [40].

Table 2. Overview and illustrative applications of Risk Management tools and indicators in retrofit evaluations.

Risk Management Tool/Indicator	Purpose/Focus	Type of Risk Addressed	Application Context	Example Application
Monte Carlo Simulation	Probabilistic modeling of uncertainty in energy/cost performance	Economic, Technical	Used to simulate variability in inputs (e.g., discount rate, lifespan) in LCC/CBA for residential or office buildings	Used in an Italian office retrofit project to assess the impact of lifespan uncertainty on economic feasibility using stochastic LCC [41]
Borda Count Mehtod	Risk prioritization based on expert evaluation	Multi-criteria (technical, financial, operational)	Applied in ranking risks of retrofit options such as HVAC system failure, supply chain delays, or tenant disruptions	Applied in residential energy retrofit projects in China to rank risks such as lack of construction skills and insufficient funds, enhancing prioritization in risk management strategies [42]
Damage Indicator	Estimates failure—related loss as % of investment	Technical	Evaluates retrofit components like façade, HVAC, insulation for failure probability and cost impact during retrofit decision-making	EEnvest project has developed methodologies to quantify the impact of component failures, such as façade insulation or mechanical ventilation systems, on the overall investment in commercial building retrofits. These assessments aid in selecting retrofit alternatives by identifying options with lower operational risks and higher long-term reliability [39]
Energy Gap Indicator	Measures discrepancy between predicted vs. actual energy use	Performance/Predictive risk	Used post-retrofit to validate model accuracy and inform recalibration of simulation assumptions	Used in the retrofit of a commercial office building in Rome to quantify the discrepancy between projected and actual post-renovation energy performance, helping to assess technical risk in investment decision-making [43]
Transaction Cost Theory	Assesses costs of coordination, contracting, monitoring	Institutional/Organizational	Applied in large-scale residential retrofits to evaluate procurement inefficiencies and administrative burdens, particularly in public–private models	Applied in the Brogården passive house renovation project in Sweden to identify and quantify transaction costs—such as extended pre-studies, procurement complexities, and monitoring requirements—highlighting their significant impact on the overall retrofit process and emphasizing the need for strategies to mitigate these costs [44]
Sensitivity Analysis	Tests robustness of results under varying assumptions	Economic/Technical	Often combined with Monte Carlo; identifies which inputs (e.g., discount rate, energy price) most influence retrofit feasibility	Applied in the retrofit of a typical villa in Abu Dhabi to evaluate the impact of various energy efficiency measures on cooling load, aiding in the selection of optimal strategies under urban heat island conditions [45]

below summarizes practical uses of Risk Management tools and indicators in retrofit projects, including also Monte Carlo Simulation and Sensitivity Analysis, which are further discussed in Section 4.4.2.

2.2.5. The Function and Selection of Discount Rates in Retrofit Evaluation

Discount rates are a fundamental parameter in the financial assessment of building retrofit projects, acting as a bridge between future benefits and present investment decisions. They reflect not only the time value of money, but also investor expectations regarding inflation, opportunity cost, and risk. In practical terms, the discount rate determines how future energy savings and maintenance cost reductions are valued today, significantly influencing the outcomes of economic indicators such as Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period (PBP) [46,47].

The selection of an appropriate discount rate is highly context-dependent. Private investors often apply higher rates (typically between 6% and 12%) to account for market-based opportunity costs and perceived project risk, whereas public authorities tend to adopt lower “social discount rates” (commonly between 2% and 4%) to reflect long-term societal benefits and policy priorities such as climate change mitigation [48]. For instance, the United Kingdom’s HM Treasury recommends a social discount rate of 3.5% for public sector projects, reflecting considerations of intergenerational equity and long-term societal benefits. This divergence can yield radically different financial outcomes for the same retrofit project: a deep renovation with a 25-year life span may appear financially unattractive under private discounting but highly viable from a public-sector standpoint.

In retrofit analysis, NPV is especially sensitive to variations in the discount rate. A small increase in this rate can disproportionately reduce the present value of long-term savings, particularly when those savings are back-loaded—as is often the case with insulation or renewable energy installations. Likewise, the Payback Period, although a simpler metric, becomes increasingly unreliable at higher discount rates due to the heavy devaluation of future benefits [49,50].

The literature reflects two dominant practices in handling discount rates. Some studies adopt fixed rates for ease of comparison, while others include sensitivity analyses to explore financial robustness across a range of assumptions. However, this practice remains inconsistent. As highlighted in multiple studies (e.g., [49,51,52]), the absence of standardized assumptions complicates cross-study benchmarking and can undermine the policy relevance of financial conclusions.

Given their pivotal influence on investment outcomes, discount rates should not be treated as a secondary input. Instead, retrofit evaluations should explicitly justify the selection of discount rates—taking into account the source of capital, risk exposure, and intended policy outcomes—and assess their impact through sensitivity or scenario analysis. This approach promotes transparency, enhances comparability, and ensures that conclusions drawn are robust and relevant for both investors and policymakers.

2.2.6. Social Impact Considerations

While the majority of the reviewed studies focused on economic (e.g., LCC, CBA) and environmental (e.g., LCA) performance metrics, relatively few incorporated explicit social impact assessment in their evaluation frameworks. Social aspects—such as thermal comfort, occupant health, housing equity, affordability, and community resilience—are increasingly critical, particularly in public and social housing retrofit contexts. However, these outcomes are often qualitative and underrepresented in conventional cost-based metrics. A limited number of studies (e.g., [53,54]) reference broader sustainability frameworks or participatory stakeholder processes, but do not apply formalized tools like Social Return on Investment (SROI) or Social Life Cycle Assessment (S-LCA). These emerging methodologies offer structured means of quantifying benefits like improved well-being, indoor air quality, or reduced fuel poverty. For instance, the REBAT (Retrofit Benefits Assessment Tool) incorporates qualitative scoring and stakeholder input to evaluate social outcomes alongside financial indicators [55]. Integrating such tools into standard retrofit evaluation frameworks could enhance equity and inclusivity, especially in low-income or vulnerable populations where social outcomes may be as important as financial viability.

3. Methodology

3.1. Literature Review Methodology

The development of this study followed a structured methodological approach. Initially, a broad exploration of the thematic area of building retrofits was conducted, which was subsequently narrowed down to focus specifically on evaluation methods for building energy retrofits. The next step involved verifying the validity and credibility of sources, followed by a systematic keyword search across relevant academic databases. The collected data from the identified studies were then organized and documented using structured Excel spreadsheets. Finally, the literature database underwent a comprehensive review and refinement process to ensure coherence and relevance. Notably, Source [56] provided valuable guidance for the literature review methodology.

3.2. Databases and Sources of Information

To support the literature search, three primary databases were utilized: Google Scholar, an openly accessible search engine for academic publications; Scopus, an international academic database available through institutional access; and ScienceDirect, a platform that provides extensive access to Elsevier’s scientific publications, also through institutional subscription.

3.3. Keywords and Search Strategies

The search strategy incorporated a set of well-defined keywords as per

Table 3. Search keywords.

No	Search Keywords
01	“LCC” AND “building” AND “retrofit”
02	“LCA” AND “building” AND “retrofit”
03	“Cost–Benefit Analysis” AND “building” AND “retrofit”
04	“Risk Management” AND building AND “retrofit”
05	“Financial Evaluation” AND “building” AND “retrofit”
06	“Discounted Cash Flow” AND “building” AND “retrofit”

. These keywords were strategically combined with the core term “Building Retrofit” and supplemented with relevant abbreviations, such as “LCA”, to broaden the scope of the search. After retrieving the initial results, filtering criteria were applied based primarily on the year of publication. The temporal scope of the final dataset spans studies published from 2016 to the present, with the majority of selected works dating from 2020 onward.

3.4. Inclusion and Exclusion Criteria

The aim of this study was to provide a comprehensive overview of the literature related to the evaluation of building energy retrofits, focusing on three core methodological approaches. The objective was to extract meaningful conclusions from the analysis.

To this end, studies were included if they

-

Focused on the economic, environmental, or risk-based evaluation of building energy retrofits (e.g., LCCA, CBA, LCA);

-

Featured clear research objectives and well-defined evaluation methods;

-

Provided traceable outcomes and data transparency;

-

Were peer-reviewed and published from 2014 onward.

Studies were excluded if they

-

Focused on unrelated evaluation methods (e.g., multi-criteria decision-making) [57,58,59];

-

Fell outside the scope (e.g., seismic retrofitting [60];

-

Lacked case studies or used purely theoretical models without applied data [61,62,63,64,65];

-

Contained missing or ambiguous information that compromised data quality.

Although no formal scoring system was applied, all studies included met basic eligibility criteria such as clarity of objectives, defined evaluation methods, and traceable outcomes. Studies with missing or ambiguous data were excluded to maintain minimum quality standards.

3.5. Evaluation and Selection Process

The overall process is described in the following steps and in Figure 3 below:

• Search Stage: Literature was retrieved from reputable academic databases, as described above. The keyword combinations ensured a well-defined search framework;
• Screening Stage: Inclusion and exclusion criteria served as the main filters for selecting relevant studies. Many studies were excluded without in-depth review, based on titles or abstracts clearly outside the defined scope. This group was not numerically recorded. A second group of articles underwent closer review but were ultimately excluded from the final database due to evolving selection dynamics. For instance, study [66] adopted a fuzzy-based approach, which deviated from the deterministic framework prevailing in the included literature. This second group totaled 24 studies;
• Inclusion Stage: Ultimately, 50 studies met all inclusion criteria and were incorporated into the final database. Key elements of each study were summarized in Excel for ease of reference and comparative analysis.

3.6. Study Recording Method

The overall documentation of the results was carried out in Excel, which was structured in a way that facilitates the extraction of conclusions and the graphical representations accompanying them.

The table can be divided into four sections, which are presented in full in the appendices of this review. The database is organized as per

Table 4. Section 1 (“General Information”) of literature review table [Appendix A].

ID	Title	Type	Journal	Author	Year
Serial number of the study	The title of the study	The type of source (e.g., article, book chapter, etc.)	The journal, or alternatively the book or conference where the study was published. For simplicity, this category is labeled as “Journal”	The authors of the study	The year of publication of the study

,

Table 5. Section 2 (“Building Information”) of literature review table [Appendix B].

ID	Building Function	Type of Model	Location	Year of Construction
Serial number of the study	The use or function of the building	The type of model used in the case study	The location of the building(s) under study	The year the building(s) under study was/were constructed

,

Table 6. Section 3 (“Evaluation Indicators”) of literature review table [Appendix C].

ID	Evaluation Method	Energy	Comfort	Environmental Impact	Trade-Off
Serial number of the study	Indicators and objective functions associated with the evaluation methodology adopted in each study. Divided into the four methods in parenthesis (CBA, LCCA, LCA, Risk Mgmt) with each indicator categorized accordingly	Metrics related to energy	Metrics related to (thermal) comfort	Metrics related to environmental footprint	Indicators related to the trade-off between evaluated parameters

and

Table 7. Section 4 (“Methods and Tools”) of literature review table [Appendix D].

ID	Methodology	Objective Function	Retrofit Measures	Constraints	Tools
Serial number of the study	The steps followed in each study	The main evaluation method used in each study	The examined energy retrofit measures in each case study	Constraints in the models used	Software and tools for modeling, simulation, optimization

:

4. Results

4.1. Statistics of Selected Studies

We begin by examining the distribution of studies by year of publication in Figure 4. Notably, from 2020 onwards, the literature becomes more abundant regarding the topic under investigation and the adopted research direction. A significant number of studies related to the evaluation approaches analyzed were published in 2021.

The majority of the studies were published articles, either in a scientific journal or initially presented at a conference. Other types of sources were included to a significantly lesser extent (Figure 5). In Figure 6 below, the distribution of articles across publication outlets is presented in greater detail.

Finally, a graph is presented showing the distribution of the geographical region of the case study of each paper (Figure 7). The majority of the case studies examined are located in Europe, with some even concentrated within the same city. This strong representation of European countries can be attributed to the significant emphasis placed by the European Union on building retrofits, as demonstrated by a series of directives and legislative frameworks introduced over the past fifteen years [67,68]. However, there is also a noteworthy presence of studies from countries in the Middle East and Asia. In particular, the Middle East has seen a growing momentum in the field of building retrofits, with ambitious targets set in recent years by countries such as the United Arab Emirates and Saudi Arabia [69,70].

To a lesser extent, studies originating from the United States and Canada are also included. It is also notable that no case studies were identified from the African continent. Overall, the geographic distribution of the studies appears to reflect the governmental policies of each country—specifically, the extent to which ecological objectives are prioritized in the national agenda—as well as the broader political and economic conditions of each country. In support of this argument, the “Global Retrofit Index” report (2022), published by the sustainability consultancy 3Keel, is presented in Figure 8, offering an assessment of G20 countries’ performance in reducing building-related emissions [71]. A comparison of the case study distribution with the index reveals a similar geographical pattern.

It should be further noted that, according to the chart, a satisfactory performance is defined as a total score between 80 and 100—a benchmark that was not met even by the top-ranking country.

4.2. Building Data

4.2.1. Building Function

A summary of the characteristics of the examined buildings is presented in Figure 9.

As illustrated in the figure above, the overwhelming majority of studies are conducted on residential buildings, including both single-family houses and apartment units, followed by public buildings (most commonly educational institutions). The dominant representation of residential buildings can be attributed to the fact that they comprise the largest portion of the building sector [72]. It is, thus, rational to focus extensive research on the building category that contributes most significantly to greenhouse gas emissions and environmental degradation. Large-scale retrofitting of residential buildings is expected to yield substantial emission reductions, particularly when considering the projected growth of the global population and the aging of the existing stock, both of which are anticipated to further intensify the sector’s environmental burden [73].

Beyond their numerical predominance, residential upgrades also hold substantial social value. Enhancing the energy efficiency of homes has been shown to reduce energy poverty and improve citizen satisfaction, thereby promoting broader societal well-being, as evidenced in studies [74,75]. Public buildings are also notably present in the literature, aligning with the European Union’s policy emphasis on the retrofitting of government-owned infrastructure [67]. Although their overall share is smaller compared to that of residential buildings, the retrofitting of public buildings is imperative for governments that pursue sustainable development policies and align with the principles of the Paris Agreement.

Included in the public building category are educational institutions, which are frequently the subject of case studies—likely due to two main factors: firstly, university buildings are high energy consumers due to their extended operating hours and large-scale facilities; and secondly, they often serve as research environments, making them accessible for academic investigation.

There are also studies that take a broader approach, examining multiple buildings of different categories within larger-scale projects. Even in such cases, the consistent presence of residential buildings remains evident. A much smaller fraction of the literature examines traditional, listed, or heritage buildings, as seen in studies [51,76,77].

4.2.2. Type of Model

As previously mentioned, the contents of the appendices’ tables refer to case studies involving one or more buildings. The evaluation methods applied in each study are based either on data related to an actual building (or buildings), on a simplified model of a building, or on an archetype. As illustrated in Figure 10, the application to real buildings ranks first by a significant margin among the case studies, while several studies also rely on simplified models. Real buildings provide realistic data, which are likely favored by researchers to enhance the reliability of their results. In many cases, the objective is to evaluate retrofit measures specifically tailored to existing buildings. The acquisition of tangible and objective data is of critical importance for accurate assessment. The application to building archetypes appears in a limited number of studies—only three cases were identified in the reviewed literature [78,79,80]. This strong preference for real buildings over archetypes or simplified models suggests a methodological emphasis on empirical validity and site-specific outcomes. However, it also raises a potential limitation regarding comparability and generalizability across studies, since evaluations tied to individual buildings may not always translate to broader retrofit strategies applicable across different building typologies or regions.

4.2.3. Year of Construction

Regarding the year of construction of the studied buildings (Figure 11), the majority corresponds to the period from 1941 to the present. Among these, only 7.4% represent buildings constructed in the last two decades. It is also noteworthy that in a substantial proportion of cases (34%), no reference was made to the construction year of the building under study. Older buildings account for even smaller percentages. The oldest building analyzed [77] was constructed in 1879 and falls under the category of historic/preserved buildings. The concentration of case studies on mid-to-late 20th century buildings reflects the retrofit urgency associated with aging, energy-inefficient building stock—particularly relevant in Europe and North America. However, the large proportion of studies that omit construction year data highlights a documentation gap that may undermine lifecycle-based evaluations, especially in models like LCA and LCC that rely on assumptions about material longevity, embedded energy, and system degradation over time.

4.3. Evaluation Indicators

4.3.1. Evaluation Methods

Each of the studies included in the analysis focuses primarily on one of the four identified approaches—Cost–Benefit Analysis (CBA), Life Cycle Cost Analysis (LCCA), Life Cycle Assessment (LCA), and Risk Management—and their associated performance indicators. As previously mentioned, and corroborated by the literature, the first two approaches (CBA and LCCA) exhibit overlapping cost-related metrics.

Specifically, the following indicators

• Payback Period (PBP);
• Discounted Payback Period (DPBP);
• Internal Rate of Return (IRR);
• Net Present Value (NPV);
• Discounted Cash Flow (DCF).

are used in both CBA and LCCA. The key similarities and differences between these indicators (1 to 5) are summarized below:

• Similarities:

• All are based on financial data and cash flow analysis to draw conclusions;
• All indicators require an evaluation of the expected cash flows resulting from the investment.

• Differences:

• PBP and DPBP focus on the time required to recover the initial investment, whereas IRR, NPV, and DCF assess the overall profitability and value of those cash flows;
• DPBP is more accurate than PBP as it incorporates the time value of money. Cash flows are discounted using the required rate of return before calculating the payback period;
• The choice of indicator depends on the specific objectives of the analysis and the contextual characteristics of the investment being evaluated.

In Figure 12, we present the distribution of the main evaluation approach selected in each included study. Additionally, Figure 13 illustrates which methodological approach (CBA or LCCA) was adopted in studies that used one or a combination of the aforementioned indicators (1 to 5).

We may draw the following conclusions:

• The majority of the examined case studies adopted LCC as the primary evaluation approach. The fact that it is so widely used as a standalone evaluation method indicates that it constitutes a comprehensive methodology capable of producing reliable results. Furthermore, most studies were conducted in Europe, where relevant policy guidelines recommend and promote the application of LCC [81]. It is also worth noting that all studies conducted on industrial buildings employed LCC. Due to its long-term perspective, this method is particularly suitable for assessing big assets with extended life and evaluation cycles [82];
• Although LCC and CBA share certain similarities [82], they are not frequently used together. Most studies rely exclusively on one or the other, with only a few employing them in combination. This limited overlap may be attributed to the fact that LCC can incorporate elements of intangible benefits, while CBA on its own can also provide a robust and well-rounded framework;
• LCC is often combined with LCA, especially in cases where the evaluation horizon exceeds 25 years. These two methods are inherently lifecycle-based and assess the project throughout its lifespan—LCC with a focus on cost elements, and LCA with a focus on environmental impact. Therefore, their parallel application is suitable for long-term projects where the analyst aims not only to assess economic viability but also to minimize environmental footprint;
• Risk Management appears in a limited number of studies as the main analytical approach. This may be due to the fact that most LCC and CBA analyses already incorporate risk considerations within their structure, particularly through sensitivity analysis of various measured variables. Moreover, risk mitigation is not usually the primary objective in studies of retrofit interventions; rather, the emphasis is typically placed on optimizing cost and performance parameters.

Focusing on Figure 13, which includes studies that employed one or more of the indicators 1 through 5, we may conclude the following:

• The NPV method appears frequently, being employed across all the broader methodological categories depending on the case. Its prominent presence is due to the fact that it is a reliable indicator capable of incorporating the time value of money. In a robust assessment of retrofit measures, future monetary values must be translated into present values in order to accurately evaluate the effectiveness of the proposed measures and determine whether a measure is economically beneficial. Similarly to the LCC method, the widespread use of NPV is also attributed to its recommendation in relevant Guidelines and Standards, such as ISO 15686-5 [83].
• NPV is almost always combined with either the IRR, the PBP, or both. This is performed to compensate for potential limitations of NPV, particularly when comparing alternative retrofit measures or scenarios. NPV and IRR often yield conflicting results in terms of final selection, so calculating both indicators provides a more informed evaluation and decision-making basis. As for the PBP—whether simple or discounted—it directly answers the question: “How long will it take to recover the initial investment?”. This is a critical consideration for decision-makers, providing essential additional information to the analysis;
• Studies incorporating one or more of indicators 1 through 5 that fall under the broader CBA category always include the payback period (simple or discounted/PBP, DPBP) as one of the metrics. This is consistent with the fact that identifying the moment when the initial investment is recovered—and benefits begin—is fundamental in any benefits-driven evaluation. This trend highlights the importance of determining when the expected returns will actually be realized.

Beyond the shared indicators 1 through 5—which are found in more than one methodological framework—the following observations were made:

• The Cost–Benefit Ratio (CBR) was the most frequently used indicator within the CBA approach. This indicator, too, can incorporate the time value of money into its calculations, a factor essential for the proper evaluation of an investment. This characteristic makes CBR robust enough to be used independently, which explains its frequent dominance in CBA applications;
• The indicators Total Life Cycle Cost (TLCC) and Global Cost were the most prevalent within the LCC approach. These two indicators are similar; thus, studies employing one rarely used the other. Both encapsulate the concept of aggregating various individual cost components in order to accurately represent total cost, which aligns well with the LCC methodological framework;
• The Global Warming Potential (GWP) was the most widely used indicator in the LCA methodology, serving as the principal global emissions metric (using carbon as the reference gas). It functions as an internationally accepted common language for measuring the environmental burden of various gases, and, thus, few variations were observed in how this metric was applied.

In conclusion, when the primary focus is the cost-oriented evaluation of retrofit measures, NPV alone cannot produce reliable and comprehensive results unless combined with at least one of the remaining indicators from group 1 through 5. The optimal combination depends on the specific focus of the study. NPV can be used independently, or paired with environmental metrics (e.g., GWP), when the goal includes not only cost-effective but also environmentally sustainable solutions.

4.3.2. Energy

Indicators related to energy (Figure 14)—such as consumption—appear in a significant proportion of the reviewed studies (78%), as they are essential for identifying cost components and estimating savings. The most frequently used combination of indicators included Consumption and Savings, while a frequent triad observed was Consumption, Savings, and Demand. When analyzing the frequency of each indicator’s individual usage across the studies where they were applied, it becomes evident that Savings and Demand had the highest occurrence. Both metrics are essential for estimating or predicting reductions not only in energy but also in cost and, consequently, in environmental footprint. The fact that Consumption was less frequently used than Demand reflects the integration of uncertainty into the analytical frameworks. While consumption data are real and measurable, demand reflects projected energy needs over a given period, influenced by various external factors (e.g., weather forecasts).

Therefore, the preference for demand metrics over actual consumption seeks to introduce a level of “safety”, in the sense that these estimates account for variables that might alter expected performance outcomes. This practice could be interpreted as a form of risk management, aiming to enhance the reliability of the predictions by incorporating potential deviations and uncertainties that may arise when relying solely on measured consumption values.

4.3.3. Comfort

Comfort-related indicators were used in only 12% of cases, primarily focusing on Thermal Comfort [84]. Studies [85,86] highlight its relevance, including metrics like Window-to-Wall Ratio (WWR). The limited inclusion of comfort indicators suggests that retrofit evaluations remain dominated by financial and technical parameters, potentially overlooking occupant-centered outcomes such as health, productivity, or thermal satisfaction. As energy retrofits increasingly intersect with social equity and well-being objectives—especially in public and residential housing—systematic integration of comfort metrics will be essential for more holistic performance assessments.

4.3.4. Environmental Impact

Environmental impact indicators appeared in 28% of studies, primarily GHG and CO₂ emissions. These are vital for building sector decarbonization [87] and are used across LCC, CBA, and LCA approaches. Study [88] exemplifies this by investigating the dilemma between “demolition” and “deep renovation” through the lens of the LCA methodology, utilizing the aforementioned GHG and CO₂ emissions indicators to support its assessment.

4.3.5. Trade-Off

Trade-offs involve sacrificing one aspect to gain another [89], extending beyond monetary terms [90]. Studies [78,91] analyze trade-offs between operational and embodied energy. Study [92] highlights the complexity in quantifying embodied energy and the need for standardizing the parameters that influence it across different geographic regions. The discussion of trade-offs illustrates the evolving complexity of retrofit evaluation, where cost-optimal, energy-efficient, and low-carbon solutions do not always align. However, very few studies translate these trade-offs into decision-making frameworks or visual tools that support stakeholder negotiation, indicating a methodological opportunity to formalize multi-criteria decision support systems in retrofit planning.

4.4. Methodology and Tools

4.4.1. Retrofit Measures

The majority of studies included a combination of retrofit measures targeting various building features. In contrast, studies [93] and [53] focused on a single upgrade measure—green roofs and lighting, respectively.

Most commonly, retrofits addressed the envelope, insulation (walls, windows, roof), and HVAC systems, as heating and cooling represent a significant portion of building energy use—38% according to [94]—and offer potential for both economic and environmental optimization. The substantial contribution of these measures to reduced building energy demand is supported by [95,96,97,98,99,100].

A notable example is study [101], which evaluates measures aligned with the ProGETonE project under the EU Horizon 2020, aiming to integrate diverse technologies for multi-benefit retrofits in existing buildings. These include enhanced seismic safety and near-zero energy performance [102]. The retrofitting package consists of an exoskeleton, façade insulation, heat pumps for heating/cooling/domestic hot water, controlled mechanical ventilation, smart building systems, and rooftop photovoltaics. The results project a 30% reduction in emissions and 50% in energy consumption.

Photovoltaic panels appeared in 22% of the cases. In study [103], three gas boiler replacement options were assessed using LCC and LCA: electric boiler, air source heat pumps, and photovoltaic systems. The combination of heat pumps and photovoltaics was deemed most effective, reducing CO₂ emissions by 77%. However, its life cycle cost was 2.1% higher than a conventional gas boiler due to high upfront installation costs (including equipment and labor). Maintenance costs during operation were not significant enough to drive the increase, confirming that higher initial investment was the primary factor. Across all studies involving photovoltaics, environmental and consumption metrics improved, although cost-effectiveness was not always optimal.

The consistent targeting of HVAC and envelope measures highlights the field’s prioritization of interventions with direct energy-saving potential. However, the limited exploration of emerging or integrative strategies—such as building automation, modular retrofitting, or combined energy-seismic upgrades like those seen in [101]—suggests that innovation is still unevenly reflected across case studies. Moreover, the trade-off between high-impact measures (e.g., photovoltaics) and their up-front cost constraints reinforces the need for improved modeling of long-term benefits and financing mechanisms, particularly in contexts with limited access to capital or incentives.

4.4.2. Simulation/Optimization Tools

Below are some statistics regarding the software tools or mathematical techniques employed in each case study to derive results. Under the broader framework of the evaluation method(s) adopted, appropriate technological and mathematical tools were utilized to synthesize the findings.

• The Monte Carlo method was applied in 22% of all cases. In 14.29% of these, it was used in combination with EnergyPlus [(E+), Version 6.0, where mentioned] as the simulation engine. Specifically, this combination was noted in studies [51,52];
• In 28% of the total cases, the simulation software EnergyPlus was used. Of those, 57.14% combined EnergyPlus with DesignBuilder, which provides a more user-friendly, graphical interface built on top of EnergyPlus;
• The remaining 50% of cases reported the use of a variety of other tools and techniques, some of which were encountered in more than one study. For instance, GenOpt was used in studies [104,105], while One Click LCA appeared in studies [88,101,103]. Additional tools included TRNSYS, Autodesk Revit, and general-purpose applications like Microsoft Excel and Power BI.

Other tools not mentioned here can be found in

Table A5. Database of Methods and Tools. [background color used for better transitioning & readability between the studies]

ID	Main Idea	Methodology	Objective Functions	Retrofit Measures	Constraints	Modeling, Simulation and Optimization Tools	Key Conclusions
[126]	A case study in Hawaii quantifying the benefits of an IS retrofit approach compared to two traditional retrofit approaches	Simulation study to calculate and analyze the energy saving benefits of the IS approach compared with the Standard Practice and the Improved Practice retrofits (3 retrofit scenarios)/Economic analysis	• LCC • Energy • Comfort	• Lighting and plug load systems • Building envelope • HVAC system	Embodied energy cost from the production and transportation phases of the ECM materials and technologies not considered/Cost associated with cooling tower water use is not considered	EnergyPlus Version 6.0	84% energy savings obtained by using the IS retrofit approach/IS retrofit demonstrates a significant advantage over the two traditional retrofit scenarios
[127]	Specific DCF approach to quantify the value created for the owners of the building by the investment in renovation via energy-saving investments	Case study of a 16-apartment building/DCF model to quantify the value created by the investment retrofit (3 approaches and comparison)	• LCC • Energy	Initial investment capital, quantification of energy savings after the retrofit, tax savings, end value of building	Not taken into consideration: (1) any difference in the cost of use of capital (discount rate) for every resident in the building (2) he presence of a constraint of age for residents to conduct investment (3) the determination of the time horizon (OT) and the lack of consideration of any outflows over OT (4) transaction costs related to investment property (5) the presence of any unexpected charges due to the application of technologies (6) the presence of possible claims by tax agencies related to tax requirements	IRR > k (discount rate)/period: 20yrs (Sensitivity analysis required)—Monte Carlo	Investments improving the quality of the buildings have an IRR from a minimum of 4.907% to a maximum of 12.980%
[128]	Investment analysis of different retrofit strategies through deterministic and stochastic financial models	Analyzing energy consumption for 5 scenarios of building envelope retrofit and comparison with base-case/Deterministic financial analysis for measuring the effectiveness of each scenario/Sensitivity analysis and Monte-Carlo simulation for stochastic financial assessment	• CBA • Energy	• Envelope component • Envelope material • Thickness • Existing U- value • Maximum acceptable U value	N/A	Monte-Carlo, Design-Builders software	Economic superiority of roof insulation/potential benefits for both owners and stakeholders
[104]	2 scenarios as following: (1) optimal designs by minimizing LCC of retrofitting measures over a span of 60 years, (2) minimization of delivered energy to the building and LCC limited to a predefined value	Choice of building/assumption that chosen building meets the Norwegian building code TEK 10 (low energy building level)/simulation of building energy performance/implementation of 2 scenarios/input parameters based on the most selected in the literature/min functions/GS module	• LCC • LCA	(1) Building envelope properties/(2) HVAC systems	1st scenario: building energy use for space heating and cooling so as to satisfy Norwegian passive house standard level/	IDA-ICE version 4.8, GenOpt, Graphical Script module approach	Facilitation in selection of cost-effective building retrofitting measures, LCC could be reduced up to 11%, delivered energy to the building could be decreased by up to 55%
[95]	Evaluation of 5 renovation strategies/measures	Simulation of energy demands of building with the rennovation measures/costs of rennovation masures over 35 years/global warming potential of each measure estimated/Pareto efficiency analysis to trace the most efficient scenario in all terms	• LCC • LCA	• Improving wall • Improved windows • Improve ventilation with heat recovery • Replacing district heating with ground source heat pumps • Adding PV panels on the roof	No renovation measures for basements in this study	Wikells database, SketchUp, Rhino 6, Sefaira, System Advisor Model (SAM), Microsoft Power BI	All 5 strategies reduced the building complex energy demand/Smart1, GSHP and Large PV are beneficial in all situations/opposite conclusions depending on the perspective [primary energy and LCC or LCA and LCC]
[93]	Impact of microclimate on retrofit and LCC of a community of buildings rather than a single isolated building	Data collection (from neighbourhood plans, energy bills etc.)/combination with weather data/comparison of energy consumption before and after retrofitting/calculation of LCC of the strategy employed	• LCC • CBA • Energy	Green roofs	N/A	Envi-met v4.0, DesignBuilder, Weather Converter EnergyPlus	After implementing green roofs: annual energy consumption decreased by 11%, payback period will be after 9.5 years and the cost–benefit during the lifetime of the green roofs will be 150%.
[129]	Best efficiency measures/packages for improving the building’s energy performance/Real discount rates of 3% and 1% were used in the financial evaluation	Methodology as per EU directives/NS method combined with dynamic energy simulation/energy performance of “base-building” and “building after the measures”/	• LCC • Energy	(1) Installation of internal insulation of the roof; (2) installation of internal insulation of the vertical envelope; (3) installation of an aerothermal heat pump for the DHW system	(1) The sensitivity analysis developed in this study comprised the selection of interest rates only; (2) only one of the six climate zones of Portugal mainland is covered and only buildings of the pre-1960 age considered; (3) the analysis assessed the economic and energy performance of selected energy retrofitting measures/packages	EnergyPlus (DesignBuilder), AutoCAD	The staged renovation approach used in the analysis is economically feasible/retrofit solutions that do not include improvements on the building envelope are generally the most cost-effective options
[130]	Computer tool for detrmination of nZEB	Computer tool divided into two calculation modules: (1) BDU and (2) LCA tool/BDU results for case study in hospital/before and after retrofit measures	• LCC • LCA • Energy • Environmental Impact	• Windows replacement • thermal insulation of the façade • thermal insulation of the ceiling	N/A	BDU module, E^tool	LCA significantly helps in the decision-making process/different approaches lead to different optimal solutions
[131]	Assessment of an industrialised deep building retrofit approach from a cost perspective to better understand its competitiveness towards traditional retrofits	Comparative economic analysis of 3 different retrofit scenarios [(1) Traditional shallow retrofit, (2). Traditional deep retrofit, (3) Industrialised deep retrofit]/LCC]	• LCC	(1) Thermal insulation wall; (2) thermal insulation roof; (3) windows; (4) ventilation; (5) heating and cooling; (6) renewable energy sources	Manufacturing and installation of all building components in the current status were excluded from the study boundaries/no sensitivity analysis conducted but its crucial role was underlined	TRNSYS, H2020 CRAVE zero	The two deep retrofit approaches (traditional and industrialised) are comparable in terms of investment costs/operation and maintenance phase has shown to be crucial to increasing the competitiveness of the industrialised retrofit
[105]	Exploration of cost-effective retrofitting combinations of building envelope, energy systems and BACS measures in-line with automation standard EN 15232 [2 case studies]	Case study modelling/retrofit measures definition/objective functions/optimization algorithm for min Of/comparison between the reference model and each retrofitted model/cost and comfort assessment/Pareto optimal combinations	• LCC • Energy • Comfort	Bulding envelope, energy systems and BACS: (1) Heating Control; (2) Ventilation Control; (3) Lighting Control; (4) Blind Control	(1) maintenance cost not considered in LCC (2) energy price fixed (3) 30yrs calculation period (4) results only valid for the two modeled apartments (5) ground floor retrofit not considered	IDA-ICE, GenOpt	Implementing BACS achieved cost-effective energy savings up to 24%/Energy savings up to 57% were estimated when BACS was combined with the other retrofitting measures
[78]	Assessment of optimum building energy efficiency retrofit packages for houses built in Ireland between 1991 and 2000/comparison with cost-optimal strategies as per nZEB regulations	Assessment of building components to building operational energy use [Material production stage, Use stage: building operation, Net construction costs, Operational economic costs, Cost-optimal methodology framework, SIF)/5 case study buildings/Sensitivity analysis on the impact of pre- and post-retrofit EPG	• LCC Energy • Environmental Impact • Trade-offs Assessment	• Roof Insulation • Window and Door Replacement • Renewable Energy Technology	Energy saving measures for the floor of the house were not considered in this analysis	DEAP	Without the use of tax breaks and/or grants, only shallow retrofits (attic insulation) were cost-effective for an energy efficiency retrofit in Ireland’s houses
[132]	Determining the most influential parameters in LCC calculations	OAT approach to identify the most influential parameters to the output/OAT results further used to rank the next five most sensitive parameters (Sensitivity analysis under Monte Carlo)	• LCC • Energy	Most influential parameters: (1) Unit cost of electricity; (2) attic insulation unit cost; (3) PV unit cost; (4) attic insulation amount (first 4 in all models); (5) New windows unit cost (District Heating model); (6) Gas unit cost (Gas model); (7) lifetime of heat pump (HP model)	(1) Calculation period; (2) Discount rates and price development	Monte Carlo, LCCByg (version 3.2.14), Sobol sampling	The sensitivity analysis determined the unit price of attic insulation, the gas price, and the lifetime of the Heat Pump (HP) as the most sensitive parameters in the three investigated models
[121]	“stochastic” LCC approach, so as to evaluate whether and how much the future macroeconomic scenario could influence the investment gap between a Cost-Optimal (CO) and a nearly Zero Energy (nZE) refurbishment solution	(VAR) models of four alternative macro-economic scenarios [regular growth, intense growth, stagflation, deflation]/LCC results obtained and compared under these four alternative cases/existing building case-study/Sensitivity analysis with Sobol Mehtod (STi)	• LCC • Energy	• Opaque building envelope • Transparent building envelope • Heating and DHW equipment	N/A	Monte Carlo	Often the cost optimal solution tends to dominate the zero-energy solution BUT (1) the cost-optimal solution may vary depending on the macroeconomic environment and (2) there can be peculiar macroeconomic circumstances that can make the nZE solution competitive with the CO solution for risk averse investors
[117]	Examining affordability of measures & energy	4 main stages: (1) base case selction and investigation (2) determination of the passive retrofitting measures (3) implementation of retrofit measures in base case model & affordability assessment (4) LCA	• LCC • LCA • Energy	• wall insulation • roof insulation • window retrofitting • solar shading • infiltration rate • finishing colors	lifetime: 50 years	IES-VE/ApacheSim	Many retrofitting measures suitable for residential buildings would be affordable for a large portion of the Jordanian community BUT initial investment cost of retrofitting is the major obstacle to implementing measures
[115]	Analysis of economic and financial implications for renovating an office building to the “Passive House” standard/(MPB) concept to identify project-based cobenefits of DER	DER case study and dynamic Life Cycle Cost Benefit Analysis/multi-parameter sensitivity analysis of the IRR and NPV/inclusion of possible stakeholder scenarios & MPBs (higher work productivity, higher revenues from rent or sales, valuing avoided greenhouse gas emissions, maintenance cost savings)	• LCC • CBA • Energy	DER project (mainly building envelope insulation to the “Passive House” standard)	Tax effects are not considered/Benefits to Utility and Society not investigated in detail/unquantified Participant MPBs that were nevertheless presented to stakeholders for discussion (Sustainable image and environmental designations, Asbestos removal, Building esthetics)	Comfortmeter	Business case not attractive to investors/Dynamic modeling is required as well as MPB classification, quantification, and relevance to different stakeholders/policy makers need to define clear and mandatory goals
[133]	Seeking optimal, generic retrofit strategies for post-war UK office buildings when using either PartL2B, or the EnerPHit standard/guidance to building owners, occupiers and other decision makers/location, orientation & weather conditions considered	Creation of exemplar building & its base-case models & simulation/Consideration of Cost & Benefit for buildings used by the owner (CBO) and the Cost & Benefit for buildings let to a tenant (CBT)/Initial optimisation simulations were undertaken to determine the best individual retrofit measures	• CBA • Energy • Comfort	Series of retrofit measures including • envelope upgrades • passive and active cooling strategies	N/A	EnergyPlus(E+), DesignBuilder, JEPlus	Both CBO and CBT calculations showed that EnerPHit retrofit costs are higher than PartL2B retrofit costs/PartL2B retrofit with passive summertime overheating interventions is optimal provided that overheating controls are installed/UK building regulations should require overheating analysis
[53]	Comparison & evaluation of results for the LED1 and LED2 system in case study building	Total life cycle cost calculation/LENI number calculation/Bulding case study/comparison of results/sensitivity analysis	• LCC • Energy	• Lighting	N/A	Microsoft Excel	possibility of using LCCA in the designed or retrofit of building lighting systems/LCCA is an excellent tool for estimating the future development of electricity consumption and can provide sufficiently accurate results
[96]	Bottom-up model for assessing the energy and non-energy benefits in investing in retrofitting existing residential building stock in Kingdom of Saudi Arabia	54 representative building prototypes to predict energy consumption for KSA housing stock/bottom-up model then determines the benefits of a wide range of energy retrofit measures	• LCC • Energy	• Building envelope components • Lighting systems • Appliances • Air conditioning systems • cooling temperature settings • Cool roofs	discount rate: 5%, lifecycle: 30 years	DOE-2.2	air conditioning is responsible for a significant energy demand for the housing stock in KSA (65%)/retrofit programs for the existing housing stock, to be effective, should be adapted to not only the type of the housing units but also to their vintage and their location/targeted retrofit programs should be developed
[97]	Presentation of retrofit of the heating/cooling and hot water system of entire community in Cyprus and its benefits	Economic model/Data collection from a community in Cyprus (residential & commercial buildings)/Flow chart of retrofit process/Cost—Benefit Analysis	• CBA • Energy • Comfort • Environmental Impact	• heating • cooling • hot water system	N/A	N/A	HW & heating/cooling systems the two main energy-consuming elements/proposed retrofit will decrease overall energy demand and have positive environmental impact/proposed retrofit project is viable
[111]	Cost–Benefit analysis to assess energy performance measures in French residential buildings/ large cross-sectional database	Bulding database for more than 1400 dwellings from 2013 to 2019/ design a typology of dwellings (Multiple Correspondence Analysis, Ascending Hierarchical Classification)/average cost-effectiveness of each energy retrofit measure is calculated/ranking/Sensitivity analysis via MC simulation	• CBA • Energy • Environmental Impact	• Low-temperature bowler • Condensing boiler • DHW • Solar DHW • Wood equipment • Windows replacement • Wall insulation • External wall insulation • Internal wall insulation • Floor insulation • Roof insulation • Heat pump	CBA with discount rate of 4%	Monte Carlo, Tornado charts	Four dwelling classes identified/most of the renovation operations are economically viable/energy price, and discount rate can influence the profitability of energy retrofits/need for government policies to this direction
[42]	Identification of critical risks hindering the implementation of residential energy retrofitting projects in the HSCW zone of China from different stages and stakeholders with TCs considerations	3 case studies, chosen from already applied energy retrofit projects in Anhui province/Interviews with key stakeholders/questionnaire survey to the professionals who have been involved in the local retrofitting projects/Data analysis/Risk matrix	• Risk Management	• exterior windows • roof • exterior walls	N/A	SPSS, Q-Q plot	Three of the four most critical risks hindering the implementation of energy retrofit projects in China are associated with homeowners/most of the key risks are concentrated in the stage of onsite construction
[43]	Calculation of investment risk of the renovation project for two different scenarios: with and without risk mitigation/Technical & financial risks—correlation between them & their originating factors or root causes	Technical & financial risk calculation via EEnvest web-platform/Technical & financial risk KPIs expressed & evaluated/Eenvest Radar graph	• Risk Management • Energy	• Heating System • Distribution system • VMC • Lights type • BEMS • Photovoltaic system	In financial risk calculation: (1) the probability distribution of the damage random variable is applied to the investment cost, and considered as a negative economic component for the calculation of financial indicators (2) the probability distribution of the energy gap random variable is applied to the expected value of energy savings and considered as a negative economic component for the calculation of financial indicators	EEnvest tool, Monte Carlo	Current model is being developed to enrich its current risk evaluation methodology with the impact of the so-called non-energy benefits
[79]	Effect of additional internal insulation on energy consumption for heating and cooling in a residential building	Simulation of various retrofitting configurations to assess energy consumption of building/Economic analysis via Global Cost Method & Simply Pay Back Time	• LCC • Energy	• rigid wood fiberboard • flex wood fiberboard • microporous CaSi •perlite board	Taxes are not included in GC calculations	WUFI Plus	Among all analyzed cases, flex wood fiberboardwith 12 cm thickness, showed the highest total energy saving/Retrofitting of buildings with low-energy consumption using internal wall insulation cannot be carried out only based on economic criteria
[80]	Investigating trade-offs between environmental and economic impacts of retrofitting	Multi-objective optimization framework to identify optimal retrofit solutions for existing SDHs in a given community/Data collection/LCCE & LCC are objective functions/Pareto optimization approach/Case study	• LCC • LCA • Environmental Impact	• Space heating system • Water heating system • Airtightness • Windows • Above-grade wall • Below-grade wall • Ceiling • Exterior door	Investment costs are set as constraints for the optimization	LCA software SimaPro 8.3, HOT2000, HTAP	Table summarizing cost-optimal retrofit packages per building archetype
[98]	Optimization model to determine the financially optimal energy retrofit configuration for owner-occupied SFHs/incentive effect of the German funding system on retrofits	TF [max: savings of energy costs & financial benefits MINUS initial investment & credit costs of a retrofit within a certain planning time period/Application of the model in 2 case study buildings/48 different retrofit scenarios/Sensitivity analysis on energy prices	• CBA • Energy • Environmental Impact	• Façade • Heating system • Others	Calculations for: (1) investment costs (2) financial benefits (3) performance values, depending on every possible combination of the n retrofit measures	GAMS	Similar results and patterns between the 2 buildings/Retrofits of SFHs in Germany can significantly lower the energy demand of buildings/The financial incentive effect of the German funding instruments can lead to financially optimal annual CO2 emissions of 7–18% of the original annual emissions
[134]	Finding optimal retrofit solutions with a view to energy-efficiency, cost-effectiveness and thermal comfort	Model, model calibration & simulation of existing industrial building/Different retrofit measures are investigated/ Utopia point criterion—retrofit solution from pareto front/Sensitivity analysis	• LCC • Energy • Comfort	• building envelope • the air conditioning system • installation of a photovoltaic system • optimization of HVAC air flow rates • variation of the heating set point schedule	N/A	EnergyPlus, DesignBuilder, MATLAB	Compared to the baseline, both optimal solutions result effective from energy, economic and thermal comfort viewpoints/The outcomes can give precious and original guidelines for the retrofit of office/industrial buildings in the Mediterranean area with a view to energy-efficiency and cost-effectiveness
[112]	Evaluation of energy building retrofits from a cost-effectiveness approach, with reference to a single case study that is representative of a particular building cluster	EU & Portugal policies review/financial analysis & dynamic simulation for 2 alternatives (“with” & “without” the project)/Sensitivity analysis on discount rates	• LCC • Energy	• EM1 • EM2 • EM3 • EM4	Discount rate: 4%	EnergyPlus, AutoCAD, DesignBuilder	The best option of energy retrofit solutions was a package consisting of roof insulation and the installation of an energy-efficient equipment for the DHW system/The financial performance of a retrofit solution can be strongly affected by the value of discount rate selected
[135]	Presentation of a model that maximizes the total life cycle cost (LCC) of case-study building	Building energy simulation/Economic analysis based on LCC/Optimization model [Heuristic solution & Multi-objective optimization using genetic algorithm]	• LCC • Energy	• PV • GSHP systems	N/A	EnergyPlus, DesignBuilder	Optimal solutions per retrofit scenario/In case study, the installation effect of the renewable energy system varies depending on energy and electricity price policies, building types, and conditions of renewable energy
[91]	Exploring and comparing the optimal retrofitting solution(s) for the building, aiming to achieve Swedish energy-efficient building standards/considering trade-offs between embodied & operational energy use	(1) Identify retrofitting measures (2) set up retrofitting case (3) perform dynamic building energy simulation (4) perform trade-off optimization (5) find optimal solution	• Trade-offs Assessment	• material types • material quantities • window types • HVAC systems	• Swedish building code constraints • Swedish energy buildingstandards constarint	EnergyPlus	Highest LCE savings ---> optimal Pareto solution/All Pareto optimal solutions have commonly adopted a heat recovery ventilation system/there is a limit for adopting retrofitting measures to minimize operational energy use where further reductions can be unfavorable from LCE perspective due to increases in embodied energy use
[136]	Life cycle analysis of 44 non-residential green buildings in Singapore/Comparing the costs at different Green Mark levels	(1) Definition of relevant parameters regarding LCC (2) collection of data (3) whole life cost (WLC) index & sensitivity analysis	• LCC	Green buildings	Discount rate: 2.65%	N/A	WLC indexes’ values were relative stable before 2008, but fluctuated significantly from 2008 to 2013/ALCC and ACC are significantly correlated with Green Mark level
[137]	Investigating the possibilities and challenges of using mass timber as a sustainable alternative for retrofitting existing buildings in Canada	Detailed typology of Canada buildings/previous timber retrofits reviewed/detailed LCCBA	• LCC • CBA • Energy • Environmental Impact	• Structural retrofits • Energy retrofits • Combined structural-energy retrofits	TCF & TDF: 10%	N/A	The use of mass timber for combined retrofits provided good results in European studies/This study considers data on energy and structural performance in cold climates and local seismicity, so as to adapt these solutions to the Canadian context
[76]	Examine the application of green retrofits to mosque building	(1) Data collection (2) questionnaire instruments distributed to 5 experts and 51 respondents	• LCC • CBA • Energy	• 504 PV solar panels • 588 ablution taps, flush toilets, and other toilet equipment with green features	Discount rate: 10%	N/A	Investment was considered feasible in the 17th year, in line with building’s 50-year lifespan/the greatest amount of risk occurred at the construction stage
[88]	Facing the dilemma: “Demolition vrs Deep renovation” via LCA	Use of building parametric costs from literature to create a dataset of typical LCA impacts in case of reconstruction or deep renovation/LCA analysis for the two alternative strategies	• LCA • Environmental Impact	• External Thermal Insulation System ETICS • Carbon Fiber-Reinforcement Polymers (CFRP) stripes	The impact of the complete demolition process of the existing building was not considered	One Click LCA	Demolition of the existing building should add a greater amount of impact to the reconstruction strategy, but the possibility of reusing demolished building materials and component needs to be assessed, as can be of importance in the final balance of impacts/socila impact of demolition to be considered
[138]	Growing demand for housing tailored to elderly needs/Provide architects and stakeholders with valuable insights into the economic implications of designing AIP homes	Phase (1) Data collection and integration Phase (2) BIM 3D model creation Phase (3) Energy Analysis and LCA simulation Phase (4) LCCA integration and Sensitivity analysis	• LCC • LCA • Energy • Environmental Impact	• Walk-in tub or shower • Ramp installation at entrance • Widen entry door • Stairlift • entry handrails • elevator • lever taps on faucets • Widen hallways • Replace 10 windows • Remodel bathroom • Kitchen countertop height adjustment • Replace the bathroom floor with a nonslip surface • Through-the-floor lift • Porch lift • Kitchen renovation	Study period: 25 yrs/MARR rate: 5%	Autodesk Revit, DesignBuilder, Microsoft Excel, MySQL	By addressing the unique requirements of AIP design in the conceptual stage, this methodology not only enhances the functionality and adaptability of homes but also provides a cost-effective and sustainable approach to accommodate the evolving needs of an aging population
[103]	Assess electric heating system retrofit options and identify the optimal solution by applying a combined LCA and LCCA approach using BIM for existing UK homes	(1) Literature review [2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022] (2) BIM case study	• LCC • LCA • Energy • Environmental Impact	• electric boilers OR • air-source heat pumps OR • PV	N/A	Revit, SAP, One Click LCA	The optimal option of those evaluated is the combination of ASHP plus photovoltaic panels, since it is the most efficient, reducing the kgCO2e emitted by 77%. However, in terms of the life cycle cost, it is 2.1% higher compared to the classic gas boiler
[99]	Development of a method in order to identify robust cost-effective and climate-friendly renovation solution for building renovation in Switzerland	(1) Deterministic simulation model LCA and LCCA (2) renovation scenarios (3) uncertainty sources (4) robust optimization (5) Sobol Sensitivity analysis (6) comparison of optimal solutions	• LCC • LCA • Energy • Environmental Impact	For Building 1: Windows, External wall (ground floor), External wall (upper levels), Ceiling (against attic), Floor (against cellars)/For Building 2: Windows, External walls stories, External walls shop, Storeboxes, Int.wallsag. Cellar, ceiling, Floor (against cellars)	Use of simplified quasi-steady heating demand calculation/For LCA, only GWP is used as an indicator/district heating not considered	Python, Monde Carlo, NSGA-II	Overall, the results show that the heating system is an important retrofit measure that needs to be taken into account as it helps to drastically decrease the amount of GHG emissions during the building life cycle
[139]	Evaluation of the usability of the RLMs included in the EPC to perform a renovation	(1) Calculation of heating energy demand (2) implementation of several renovation options (3) LCCA for each retrofit scenario (4) Assessment of effort required for each method	• LCC • Energy	• Sealing of air leaks • Insulate cold ceilings • Insulate roof or ceiling • Insulate the floor at the ground • Insulate exposed floors • Back insulation of outer wall • Insulation of basement wall • Replacement of window • Install heat pump	N/A	EnergimerkeKalkulator, Simien, Design builder, Total Tool	Discrepancy between the tools observed/the certification tools in their current state are not capable of evaluating the RLMs included in the certificate
[100]	Providing a deeper understanding of the key performance indicators of energy efficiency retrofit cases in commercial buildings in Thailand through an actual set of case study analyses	(1) Data collections and case studies formation (2) identification of key performance indicators (3) analysis of key performance results (4) assessment of cost vrs abatement	• LCC • Energy • Environmental Impact	• HVAC • lighting • hot water • BEMS • others	Hospitals were excluded from this analysis	MS-EXCEL, MACTool	Commercial buildings in Thailand can reduce their energy consumption by appr. 15–20%/On average, a retrofit project can deliver a payback period of approximately 3 to 4 years/greater public policy and leadership are needed to stimulate growth in the building retrofit sector
[116]	Analyzing the financial consequences of the energy transition in housing for the owners of apartments located in the Campania region (Italy)	(1) Classification (2) Measurement (3) Estimation of unit prices (4) CRA/Sensitivity analysis and risk analysis	• CBA • Energy	• Thermal insulation interventions of the building envelope • Fixtures • Solar screens • Autonomous boilers • Photovoltaic system • Safety	small statistical sample/focuses solely on the financial convenience of the interventions	Monte Carlo	Interventions without photovoltaics are unlikely to be financially sustainable/PP remains quite high/need for government building bonuses
[49]	Applicationof LCC and MC-based analytical model to a case study/discount rate as a remarkable source of additional uncertainty	LCC calculation (useful life = 30 yrs)/Monte Carlo simulation for energy retrofit scenarios of the case study/Sensitivity analysis	• LCC • Energy	7 retrofit scenarios	Assumption that all the scenarios have the same life-cycle period/maintenance expenses excl./r > e/0.5 €/kWh < energy price < 14.6 €/kWh/avr gas price ≈ 0.0539 Euro/kWh net of taxes, levies/0% < energy inflation rate < 4.5%/0% < discount rate < 15%	Monte-Carlo	Multiple intersections strictly related to the changes in the discount rate/The policyactions in the field should focus on controlling the consumers’ and investors’ risk aversion, and on reducing the barriers represented by the perception of future uncertainties by the stakeholders
[101]	Environmental and economic assessment of the strategy proposed by ProGETonE for the renovation and seismic reinforcement of buildings	(1) Initial Analysis on case study house: ProGETonE review (2) Construction Materials Inventory (3) Cloud-Based Analysis (4) LCA and LCC Analyses of pre-renovation state and post-renovation state (5) Results Comparison (6) Conclusions	• LCC • LCA • Energy	• Exoskeleton incorporation • plug-and-play insulated façade system • heat pumps for heating, cooling and DHW • controlled mechanical ventilation • smart building controls • roof PV	discount rate: 7%/period of evaluation: 25 years	One Click LCA, BIM, EnergyPlus	Environmental Impact: Renovation will reduse emissions by about 30% and energy use by 50%, exoskeleton is a key part/Economic Impact: ProGETonE retrofit plan seems not to be economically convenient, BUT has positive impact on energy cost savings and highlights the benefits of seismic consolidation
[140]	Cost–Benefit analysis on Niddrie Road project [EnerPHit (PassivHaus equivalent) standard for the retrofit of tenement block of eight one bed flats in Glasgow]	Social cost–benefit analysis/comparison of main scenario [EnerPHit] with two counter-factuals [New Build and EESSH2]/Cost data/Benefits data/Sensitivity analysis	• CBA • Energy • Environmental Impact	• external and internal wall insulation • internal remodelling • mechanical ventilation and wastewater heat recovery • roof • airtight plastering	discount rate: 3.5%	PHPP	Under all three scenarios, the New Build has the lowest NPV and BCR/retrofitting this tenement provides better value for money compared to demolition and new building BUT the optimal level of retrofitting depends on a variety of factors
[86]	Proposal for a Community Building Energy Modelling—Life Cycle Cost Analysis (CBEM—LCCA) decision-making framework/contribution to building community energy modelling, especially in developing countries, in the context of reaching net zero energy targets	(1) Building community boundary delineation (2) Development of community building energy model (3) Community building energy model renewable assessment and validation framework (4) LCCA of the rooftop solar PV panels/Sensitivity analysis of cooling space fraction	• LCC • Energy • Comfort	Community approach: rooftop solar PV/ECBC: building envelope (7 possible retrofit combinations)	discount rate: 13%	QGIS vector, IES-ICL, IES-VE thermal engine	The communities are observed to be capable of achieving nearly net-zero energy after adopting a community-wide rooftop solar photovoltaic installation/The community rooftop solar strategy proves economically far superior to ECBC compliance of individual building envelopes
[54]	Proposal of a methodology to address the principles of Cost Benefit Analysis (CBA), applied to energy efficiency in social housing and Northwest Mexico climate characteristics	NPV estimated across two situations (new build and retrofit), two types of cooling device (refrigeration-based air-conditioning and evaporative cooling) and two financing scenarios for base case building	• CBA • Energy	• Thermal mass • Insulation • Window shading/4 alternative projects/3 mechanical cooling options	social discount rate: 10%/period of evaluation: 20 years	EnergyPlus, Microsoft Excel	Investing in low-energy design or energy-efficiency upgrade is always profitable in terms of reduced energy consumption, but the payback period varies depending on the type and source of financing/Non-quantifiable benefits should be considered in decision-making
[51]	Discussion on how risk management techniques may help manage energy efficiency programs at a city level	Sensitivity analysis & MC simulation in case study buildings: (1) Risk mgmt techniques for both energy and financial models (2) definition of uncertain parameters of the NPV (3) Each uncertainty input assigned a probability distribution (4) MC simulation in NPV [*3] (5) sensitivity analysis to define inputs with the most impactful influence on NPV [*2 versions]	• Risk Management • Energy	• Thermostatic valves • Mechanical ventilation with heat recovery system • Condensing boiler with η > 1.06 • Air conditioners • Windows low-emissivity films • Windows with triple glazing and low emissivity coating • LED bulbs • Perlite thermalplaster • Stone wool insulation • Aerogel insulation	N/A	Monte Carlo, Energy Plus, Crystal Ball	Both sensitivity analyses identify the gas savings as the major impactful variable on the outcome and the financial subsidy is also recognised as one of the inputs with the most impactful influence on the NPV/It is essential to include risk analyses in energy retrofit studies to identify and “quantify” the primary risk sources and, therefore, to try to overcome the uncertainty problem as a significant barrier to investment
[141]	Knowledge Base System (iKBS) for residential building LCA, which integrates and analyzes complex, various data sources using knowledge acquisition, knowledge pre-processing (transforming unstructured data into structured data), and knowledge management	(1) goal and scope definition (2) life cycle inventory (LCI) (3) life cycle impact assessment (4) interpretation/The case study aims to evaluate the environmental impact of existing Irish semi-detached typology and recommend the best materials and components for retrofits	• LCA • Environmental Impact	two heating system scenarios: (1) condensing boiler (2) air source heat pump	60-year life span	iKBS, fuzzy-based method, EnergyPlus	Advancement of understanding of the environmental impacts of residential renovations/The comparative analysis of various KBS approaches has provided valuable insights into operational and embodied energy aspects
[52]	Energy improvement is handled as an optimisation process/combination of techniques to have the greatest possible benefit, i.e., wide building portfolios]	(1) Energy assessment (2) Optimal resources allocation [max benefit] (3) Risk quantification (4) Decision-making model (5) Sensisitvity analysis on the model 6) implementation of model in case-study	• LCC • Energy	• thermostatic valves • mechanical ventilation • double glazing glasses • Internal roof insulation • External roof insulation • Internal wall insulation (2 types) • External wall insulation • Ground floor insulation	Model constr.: In every building, no more than 1 scenario among the proposed options (including the do-nothing scenario) must be selected at a time/ budget limitation/LCC: r = 3.58%, n = 30 years	Monte Carlo [9 uncertain input factors], Design Builder, EnergyPlus	Flexibility of the model developed/Combined use of traditional financial techniques with multi-attribute linear programming as a simple way to sort out a complex optimization problem
[142]	Probabilistic LCC to overcome the obstacle of simplifications of input parameters/Sensitivity analysis	(1) Definition of the main hypothesis and system boundaries for the Global Costs calculation method based on EN 15459 (2) Identification and characterization of the PDFs of the stochastic inputs of the Global Costs calculation (3) Uncertainty propagation and analysis through Monte Carlo methods (4) Sensitivity analysis through variance-based decomposition techniques (5) Case-study	• LCC • Energy	• building envelope • heat pumps and/or boiler • photovoltaic panels and solar colelctors • high-performance distribution, emission and control systems for heating • MEV	The only investment cost items included in the LCC calculation are those related to the EEMs/costs of greenhouse gas emissions are neglected/n = 30 years—variance from 5 to 50 years	Monte Carlo	All RCs provide a high reduction in primary energy/Global Costs uncertainty increases progressing towards the most efficient scenarios/Importance of investment costs
[143]	Filling the gap of lack of empirical evidence to validate the results of the various retrofit alternativeness’ cost effectiveness during CBA	(1) Identification of costs and benefits (2) calculation of costs & benefits with and without the EER project (3) Sensitivity analysis	• CBA • Energy	• OHPN retrofit • External thermal insulation • Heat source retrofit • Indoor heating pipe networks retrofit • Installation of indoor fresh air system	technical lifetime: 20 years	N/A	Retrofit of heat source and outdoor heating pipe networks is cost effective/buildings envelopes retrofit is not economically beneficial/Energy price is a sensitive factor affecting the economic viability of EER projects
[77]	Examine reuse of historic buildings versus traditional demolition and construction approaches	(1) Creation of 2 BIMs (2) LCA calcualtion and sensitivity analysis (3) Step 2 results for calculation of Environmental impact avoidance (=impact from reused historical building components)	• LCA	ADAPTIVE REUSE: • foundation, load-bearing walls and roof structure • floors, interior walls, ceiling and stairs • exterior walls, roof, windows and doors	(1) Energy supplymix is stable (2) assumptions due to the lack of info (3) C1 (demolition) excluded from adaptive reuse desig	Autodesk Revit (Taly)	Preservation of existing materials leads to reduction in environmental impacts

in the Appendix D. Let us now take a closer look at the most frequently used tools:

Monte Carlo:

Monte Carlo methods are a significant category of computationally intensive statistical techniques, primarily aimed at approximating complex integrals and finding optimal solutions to problems via simulation [106]. It is a stochastic process targeting problem variables that contain uncertainty. By using different sets of random numbers between maximum and minimum values, sets of potential outcomes are generated through iterative sampling [107].

A key characteristic of Monte Carlo methods is their integration of uncertainty. In all studies employing this method—except for one [43]—a sensitivity analysis was performed in tandem with the methodology. Notably, studies [43,51], both of which adopt a Risk Management approach, applied Monte Carlo simulation in their models.

EnergyPlus:

EnergyPlus is a free and open-source building energy performance simulation software developed by the U.S. Department of Energy, officially released in 2001 [108]. It is widely used by engineers, architects, and researchers globally and allows for the simulation of multiple building systems, including

• Thermal behavior;
• HVAC (Heating, Ventilation, and Air Conditioning) systems;
• Lighting;
• Renewable energy systems (e.g., solar power);
• Climate impact modeling.

DesignBuilder:

DesignBuilder is a commercially available building simulation and modeling software for 3D computational design. It enables the import of Building Information Model (BIM) data from other environments, potentially allowing only energy-relevant BIM parameters to be used [109]. EnergyPlus serves as the simulation engine, utilized for analyzing thermal zones and HVAC systems.

4.4.3. The Importance of the Discount Rate

In the context of an investment, the discount rate refers to the rate used to calculate the present value of future cash flows. The concept is based on the principle that money today is worth more than money in the future, due to factors such as investment opportunities, inflation, and risk, among others [110]. In the context of building retrofits under analysis, the discount rate appears in the LCC and CBA approaches and in certain indicators associated with them. It is not applied in LCA-based methods.

Among the studies that incorporated a discount rate, there was a consistent emphasis on the critical role it plays in determining the cost-effectiveness of the evaluated measures. Specifically, studies [111,112] conclude that the performance of retrofit measures is highly sensitive to the value of the discount rate. Both studies applied a 4% discount rate in their calculations—one under the CBA framework and the other within the LCC methodology. The model presented in [49] treats the discount rate as a significant source of added uncertainty and finds that it affects the results four times more than the price of energy. Study [54] introduces the concept of the Social Discount Rate (SDR), which is used to evaluate trade-offs between short-term and long-term policies in investment decisions or fiscal strategies. Essentially, it reflects society’s valuation of current consumption over future benefits. In stable and peaceful countries, the SDR tends to be lower, whereas politically or economically unstable nations exhibit substantially higher SDRs. Accordingly, study [54] applied an SDR in its calculations, given the assumption that homeowners would utilize government subsidy schemes (case study on social housing in northwestern Mexico). In this case, the SDR was set to 10%, representing the societal opportunity cost of capital.

Recognizing the importance of the discount rate in retrofit decision-making, it becomes evident that developing or unstable countries face additional barriers in this area. During periods of instability and uncertainty, interest rates tend to spike. For context, discount rates in European countries typically range between 2% and 4%, whereas in Ukraine it currently stands at 14.5%, and in Ghana it reaches 27% [113]. Given the demonstrated impact of the discount rate on cost-effectiveness, global solutions must be sought to prevent it from becoming another barrier to the energy transition of many nations.

In terms of recommended values, the report prepared by Steinbach and Staniaszek in 2015 for the Building Performance Institute Europe (BPIE) noted that social discount rates in national reports of EU Member States ranged between 1% and 7%. For private investors (non-commercial and non-industrial, including households), they recommended a real discount rate between 3% and 6% [114].

4.4.4. Social and Political Dimension of the Studies

Given that the present literature review focuses primarily on economic evaluation methods for retrofit measures, it is expected that the financial cost associated with these upgrades—and the extent to which it can be overcome by stakeholders (e.g., homeowners, tenants, companies)—is emphasized.

Indicatively, the findings of studies [78,98,100,111,115,116] highlight the need for governmental intervention and funding in order for the examined measures to become either economically viable or to achieve a greater degree of effectiveness. Among these, studies [100,115] refer to commercial buildings, while the remaining focus on residential buildings. All include at least one heating-related measure, and it is also noteworthy that studies [78,98,111,115] include the retrofit package consisting of “wall insulation, roof insulation, and replacement of doors and windows.” This package is essential for the energy transition of buildings, as these are typically older constructions. For example, the building under analysis in study [115] dates back to 1960. Understanding that the energy transition of older buildings is moving toward mandatory compliance, governments should consistently and more extensively integrate renovation subsidies into their policies. Moreover, they should implement regulatory interventions targeting highly influential parameters, such as energy prices and the discount rate. Of course, in cases of such state interventions, the macroeconomic environment plays a pivotal role, and additional layers of complexity emerge due to the delicate balance required in policymaking.

Let us also briefly consider the social dimension of the studies, particularly study [117], which investigates the economic affordability of specific retrofit measures for a residence in Jordan using LCC and LCA methods. Although the study states that LCA does not include a formal social assessment, the theme and objective are inherently social in nature. The study concludes that while the measures are affordable for 73–78% of Jordanian households and the long-term benefits are quantifiable, the initial installation/investment cost is the main deterrent to implementation, especially for low-income households.

Social considerations are also identified in studies [86,93,97], where the concept of community and the application of retrofit measures at a large scale are examined. In study [86], the alternative of community rooftop solar PV is found to be significantly more efficient compared to individualized envelope interventions for each separate dwelling. It is also explored as a viable option for developing countries. This direction in the aforementioned studies demonstrates a trend toward evaluating multiple alternatives in order to achieve optimal solutions that meet not only economic efficiency goals but also broader social needs.

5. Discussion

5.1. Main Observations

In response to the three key research questions posed at the beginning of this review:

(i)

The predominant evaluation methods used in the economic and environmental assessment of building energy retrofits are Life Cycle Cost Analysis (LCCA) and, to a lesser extent, Cost–Benefit Analysis (CBA) and Life Cycle Assessment (LCA). LCCA appears most frequently due to its alignment with EU policy frameworks and its suitability for long-term investments. It is often used in combination with LCA to assess both financial and environmental performance. Risk Management, while less commonly used as a standalone approach, is typically embedded within LCCA and CBA studies through tools like Monte Carlo simulation and sensitivity analysis.

(ii)

Cost and environmental indicators are relatively well integrated across most studies, particularly via metrics such as Net Present Value (NPV), Payback Period, and Global Warming Potential (GWP). However, social indicators—such as affordability, occupant comfort, or equity—are only occasionally mentioned and rarely quantified. Formal methodologies like SROI or Social-LCA are virtually absent, highlighting a significant methodological gap.

(iii)

The review reveals that current gaps include the lack of geographic diversity (with an overrepresentation of European case studies), inconsistent treatment of discount rates, and the absence of standardized frameworks that combine financial, environmental, and social dimensions. Future opportunities lie in the development of integrated, multi-domain assessment tools that incorporate stakeholder values, long-term resilience, and equitable outcomes—particularly in underrepresented regions like Africa and parts of Asia and Latin America.

These initial answers provide a high-level synthesis of the review’s main findings. In the following discussion, each theme is explored in greater detail—highlighting methodological preferences, simulation tools, policy drivers, and socio-economic implications that shape retrofit evaluation practices across the literature.

The broader discussion builds upon the structured analysis of 50 studies, which collectively illustrate how economic, environmental, and—less frequently—social indicators are applied in retrofit evaluations. Life Cycle Costing (LCC) emerged as the most commonly used method, often in combination with LCA, particularly in long-term assessments. Cost–Benefit Analysis (CBA) appeared less frequently but offers a broader economic perspective, while Risk Management was typically integrated into other frameworks rather than used independently. The volume of relevant literature has grown substantially since 2020, with most case studies originating from European countries—likely reflecting the region’s strong regulatory and policy support. In contrast, no studies were identified from Africa, highlighting a significant gap in geographic coverage.

The high share of European case studies aligns with the European Union’s broader efforts toward energy transition and compliance with the targets of the Paris Agreement. This includes climate neutrality goals by 2050, as mentioned earlier in this paper, along with various EU directives and computational tools for evaluating retrofit strategies, such as

https://eplca.jrc.ec.europa.eu/ (accessed on 10 February 2025)

https://green-business.ec.europa.eu/green-public-procurement/life-cycle-costing_en (accessed on 10 February 2025)

As expected, most case studies were applied to buildings constructed in 2004 or earlier, with a significant proportion involving post-war buildings. The majority of applications and simulations were conducted on real buildings, while the use of archetype and simplified building models was more limited. Most buildings under study were residential, followed by public and commercial buildings. In terms of the evaluated measures, thermal envelope insulation and Heating–Cooling–Domestic Hot Water (HC-DHW) systems consistently appeared as the primary building components targeted for upgrades.

Among the evaluation approaches, Life Cycle Costing (LCC) was the most frequently employed. Combined approaches (e.g., LCC and CBA) were also common. Notably, LCC and CBA offer equally reliable results and share several cost-based indicators. These shared indicators—identified during the review—include Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period (PBP, discounted or not), and Discounted Cash Flow (DCF). The use of these indicators reflects the need to incorporate the time value of future cash flows into the present, ensuring a robust assessment of proposed measures. It was observed that CBA is somewhat underutilized compared to LCC, despite being equally rigorous and reliable. This may be attributed to the common practice of following EU guidance, which recommends the use of LCC, and to the fact that LCC is better suited for projects with longer life cycles. The lifecycle component of LCC also overlaps with that of Life Cycle Assessment (LCA), which is environmentally oriented and often used in combination with LCC.

In general, combining evaluation methods (e.g., LCC and CBA, or LCC and LCA) leads to a more comprehensive analytical framework and yields optimal solutions that consider multiple parameters.

Indicators related to energy, comfort, and environmental impact are essential for implementing the above evaluation methods and were found in all studies. Energy savings is one of the core indicators that must be reported.

Risk Management is examined in this paper but does not appear frequently as a standalone evaluation method in the literature. This is because risk analysis is typically integrated at various stages within the broader methodologies. Moreover, many studies explicitly address uncertainty (e.g., via Monte Carlo simulation, sensitivity analysis).

This literature review highlighted the significant influence of the discount rate on evaluation outcomes. However, other parameters such as electricity prices may also affect the results. Wherever possible, governments should serve as regulatory enablers—intervening strategically to accelerate the green building transition and ensure inclusivity across all segments of society.

External factors such as policy frameworks and market demand significantly shape both the methodological choices and the practical application of evaluation tools in building renovation projects. In the European Union, for example, the Energy Performance of Buildings Directive (EPBD) has mandated cost-optimal renovation strategies and minimum energy performance standards, which in turn have promoted the systematic use of Life Cycle Costing (LCC) and Life Cycle Assessment (LCA) in public and private retrofit evaluations. Financial mechanisms such as Germany’s KfW Energy-Efficient Renovation Program offer low-interest loans and grants tied to energy performance thresholds, encouraging project owners to apply structured economic and environmental evaluations [118].

Market demand also plays a pivotal role. The rise in green building certifications and sustainability-conscious investors has led to greater reliance on standardized metrics and reporting practices. For instance, real estate stakeholders increasingly use LCA and LCC tools to enhance the marketability and long-term value of retrofitted assets. The global market for energy-efficient buildings was valued at over USD 28 billion in 2023 and is projected to grow at over 11% annually, driven largely by energy pricing trends, carbon regulations, and occupant preferences [119].

To leverage these external forces effectively, retrofit evaluation practices must be aligned with regulatory targets and market conditions. This includes the integration of policy-compliant indicators (e.g., energy use intensity, CO₂ reductions) and responsive tools that reflect emerging market values such as climate resilience and occupant wellness. Additionally, stakeholder engagement in the evaluation process is essential to ensure that methods are not only technically robust but also socioeconomically relevant. This alignment strengthens both the credibility and the impact of building retrofit decisions and supports the broader transition toward sustainable, resilient, and policy-aligned building stocks [120].

The main trends identified through the research are briefly presented in

Table 8. General Trends and Observations.

Field	Trends
Time	Significant increase in data volume from 2020 onwards
Location	Europe is more active in building retrofits; increasing participation from developing countries remains a challenge
Function	Case studies are primarily conducted on real buildings used as residential dwellings
Tools	Most commonly used tools include EnergyPlus, DesignBuilder, and GenOpt
Methodology	Adoption of alternative approaches to optimize outcomes (e.g., trade-offs, community-level strategies, integration of retrofitting and seismic measures)
Energy	Energy savings are calculated in all models; demand data is preferred over consumption data
Environment	Environmental factors are integrated across all evaluation methods; constitute a core focus within the LCA approach
Measures	HVAC and building envelope insulation are among the most frequently evaluated measures; photovoltaic integration could be more extensively explored
Risk	Uncertainty is accounted for through Monte Carlo simulations and sensitivity analyses
Influencing Factors	Discount rate, electricity prices, and climatic conditions play a critical role; discount rate especially has a strong impact on evaluations and decision-making
Society	All evaluation methods exhibit social implications and can incorporate social benefits

and

Table 9. Trends in evaluation indicators.

Evaluation Method	Trend
LCC	Most frequently used/Often combined with LCA, rarely with CBA
LCA	Often combined with LCC/Both are suitable for long life cycles (25+ years)
CBA	Many shared indicators with LCC/Rarely combined/CBA appears less frequently in the literature/Acts as a decision-making tool
Risk Mgmt	Typically used as a complementary approach alongside the above methods/Sensitivity analysis is dominant in the models

.

To address the distinct performance and application domains of the evaluation methods discussed,

Table 10. Comparative matrix of Evaluation Methods.

Ev. Method	Primary Focus	Time Horizon Suitability	Project Goal Suitability	Sensitivity to Assumptions	Best Use Cases
LCC	Economic (cost-focused)	Long-term (≥25 years)	Projects aimed at financial sustainability and return-on-investment	High—influenced by discount rate, cost assumptions	Industrial/public buildings, large retrofits with quantifiable cost data
LCA	Environmental (impact-focused)	Any, but typically long-term	Projects prioritizing sustainability and environmental impact mitigation	Medium—dependent on boundary definitions, database quality	Green buildings, net-zero targets, sustainability certifications (e.g., BREEAM, LEED)
CBA	Economic (broader economic value)	Short to medium (5–20 years)	Projects seeking justification through quantifiable socio-economic benefits	High—valuation of intangible benefits adds uncertainty	Social housing, government-funded retrofits, policy-level decision-making

provides a comparative overview of LCC, CBA, and LCA. The table summarizes their focus areas, applicable timeframes, suitability to various project objectives, and their sensitivity to assumptions—factors which directly influence their appropriateness in specific retrofit scenarios.

While each method serves a specific purpose, their applicability depends on the retrofit context. LCCA is best suited for long-term financial planning—particularly in public or industrial projects—where lifecycle costs are quantifiable and critical to decision-making. CBA provides a broader perspective by including intangible or societal benefits, making it more appropriate for policy-driven or publicly funded retrofits. LCA, focused on environmental impacts, is essential for evaluating emissions and resource use but does not account for financial return. Each method has limitations: LCCA and CBA are sensitive to discount rates and cost assumptions, while LCA depends on data quality and system boundaries. For more balanced assessments, combined approaches (e.g., LCCA with LCA) can mitigate individual weaknesses and support integrated decisions across economic and environmental dimensions.

5.2. Challenges and Limitations

• The accurate recording of all parameters and variables that may be useful for calculations is a demanding process. Often, certain data cannot be obtained and, thus, are excluded from the study. Many parameters are also disregarded for simplification purposes. For instance, in study [105], which follows the LCC approach, maintenance costs are not considered. Similarly, in study [115], which employs a combined LCC and CBA methodology, the benefits related to overall utility and societal impact are not explored in depth. A careful examination of such limitations is necessary to avoid significantly skewed results;
• The fact that case studies are confined to a specific geographical location and its respective climate zone raises concerns about the generalizability of results. There remains the question of whether similar outcomes would be observed in different regions. While geographic and methodological diversity exists among the selected studies, the analysis focuses on identifying recurring patterns and trends across contexts, rather than applying weighted conclusions by region or retrofit type.
• Achieving an optimal solution that satisfies the criterion of cost-optimality while also delivering effective performance in other domains—such as emissions reduction or seismic protection—presents a challenge. The trade-offs and decisions made must ultimately result in a well-balanced outcome;
• In many instances, economic evaluations yield outcomes that are not financially advantageous, unless supplemented by targeted policy measures. Without such incentives, implementing energy retrofits at scale may not be feasible. State subsidies or support mechanisms are often essential to promote widespread building upgrades.
• Despite the comprehensive nature of the reviewed studies, a notable geographic imbalance was observed. The dominance of European case studies is well-documented and reflects the continent’s strong policy support, funding mechanisms, and regulatory frameworks for building retrofits. However, the limited representation of studies from Asia and Middle East—and the complete absence of African case studies—emerges as a significant limitation. This lack of diversity may hinder the global applicability of conclusions drawn from the current review. Climatic, economic, and sociopolitical conditions differ widely across regions, and retrofit strategies that are cost-effective or environmentally beneficial in Europe may not translate directly to other contexts.
• In addition to data availability and geographic constraints, other important limitations include uncertainty in long-term energy prices, variability in actual building performance, and the difficulty of quantifying intangible benefits such as thermal comfort, indoor air quality, and user satisfaction. These elements are crucial in real-world decision-making but are often overlooked in traditional financial or environmental evaluation frameworks. Incorporating stakeholder feedback, sensitivity analyses, or hybrid evaluation methods may help address such gaps and lead to more comprehensive retrofit assessments.

5.3. Research Gaps Identified

While this review synthesizes existing methods, it also highlights underexplored areas crucial for future research, as described below and summarized in

Table 11. Research Gap Summary.

Gap Category	Description	Suggested Research Direction
Social Indicators	Rare formal use of social tools (SROI, S-LCA); mostly qualitative mentions	Integrate social valuation tools into economic/environmental models
Global South Representation	Few studies from Global South regions; none from Africa; limited transferability of conclusions	Develop localized LCC/LCA models in Africa, Latin America, SE Asia
Integrated Frameworks	Full LCC+LCA+CBA models with risk and social factors are extremely rare	Advance integrated, multi-domain evaluation frameworks
Implementation challenges	Retrofit assessments often overlook real-world barriers like data gaps, affordability, and policy misalignment	Align methods with regulations, incentives, and user needs; study implementation barriers across contexts

:

• Although building retrofit evaluations frequently apply CBA, LCC, and LCA, few incorporate formalized social indicators, such as energy poverty reduction or occupant well-being. For example, study [54] acknowledges the use of a Social Discount Rate in low-income housing but does not adopt formal tools like SROI.
• Research to date has been largely centered on Europe, with no case studies identified from Africa and only sparse examples from Latin America or the Middle East. For example, study [117] on Jordan highlights affordability constraints in retrofit adoption, but such regional investigations are rare; the absence of studies like this from Australia and Africa creates a major representational gap.
• While combinations like LCC+LCA are seen [80,103], full integration with CBA and risk or social analysis is uncommon. Study [49] incorporates Monte Carlo uncertainty but omits LCA or formal social indicators—illustrating that comprehensive multi-domain frameworks remain rare;
• Practical implementation of retrofit assessment methods faces additional challenges, including technical constraints (e.g., limited data availability), social barriers (e.g., user resistance, affordability), and regulatory inconsistencies across countries or programs. Improved coordination between evaluation methods and real-world policy tools—such as building codes, incentive schemes, and procurement standards—would help bridge the gap between theory and application.

5.4. Future Research

• One particularly compelling area for further exploration is presented in study [121], which investigates whether the gap between cost-optimal and net-zero solutions can be bridged, given that the cost-optimal option often overshadows the net-zero alternative. The macroeconomic context plays a significant role in this equation, and further investigation would be valuable; future research could examine how financial tools (e.g., tax credits, green loans, or EPC-linked mortgages) could be explicitly modeled to close the feasibility gap between cost-driven and carbon-neutral strategies, particularly in long-lifecycle retrofits.
• Future research should prioritize case studies from underrepresented regions, such as Australia and more particularly the African continent, to foster a more inclusive and globally transferable understanding of retrofit evaluation methods. Addressing this gap is essential for supporting equitable progress toward international sustainability and decarbonization goals. Operationally, this entails adapting discount rates, cost structures, and climatic parameters to local conditions, as well as collaborating with local institutions to ensure data accuracy and policy relevance.
• The integration of Internet of Things (IoT) technologies and intelligent building systems has significantly enhanced the evaluation methods for building renovations. IoT-enabled sensors and devices facilitate real-time data collection on energy consumption, occupancy patterns, and environmental conditions, providing a granular understanding of building performance. This data-driven approach allows for more accurate LCC and LCA by reducing uncertainties associated with static assumptions. For instance, in [122], a hybrid deep learning model that leverages IoT data to predict energy consumption in buildings is developed, demonstrating improved forecasting accuracy and enabling proactive energy management strategies.
  Furthermore, the concept of Digital Twins—virtual replicas of physical buildings—has emerged as a powerful tool in retrofit evaluations. By integrating real-time data from IoT devices, Digital Twins can simulate various retrofit scenarios, assess potential outcomes, and optimize decision-making processes. In [123], it is illustrated how combining deep learning with Digital Twin technology can enhance energy performance analysis, leading to more efficient and sustainable building operations.
  These technological advancements not only improve the precision of retrofit evaluations but also enable continuous monitoring and adaptive management, ensuring that renovation measures remain effective over time. Future studies should explore how Digital Twins can be operationalized in LCC and CBA workflows and how sensor networks can be scaled cost-effectively in low- and middle-income housing sectors.
• While LCC, CBA, and LCA are established tools in retrofit evaluation, each represents a disciplinary lens—economic, environmental, or policy-centric. However, real-world renovation projects increasingly require a holistic perspective that accounts not only for cost-effectiveness and emissions but also for social justice, occupant well-being, and stakeholder values. To support such multifaceted decision-making, future research should focus on integrated evaluation frameworks that combine methods from economics, environmental science, and sociology.
  Examples of such integration include coupling LCC with LCA for eco-efficiency optimization, incorporating social indicators such as affordability or health into multi-criteria decision analysis (MCDA), or applying SROI (Social return on Investment) to capture non-monetary social value [124]. System dynamics modeling and agent-based simulations have also emerged as interdisciplinary tools that simulate long-term impacts and behavioral interactions in retrofit scenarios [125]. By explicitly linking economic metrics with environmental impacts and social outcomes, these approaches support evidence-based, equitable, and policy-aligned decisions. Institutional collaboration between building engineers, urban economists, sociologists, and policy analysts is, therefore, essential for the development of next-generation retrofit evaluation methods
• Finally, the aspect of social benefits should be explored in greater depth, along with the potential for quantifying and offsetting these benefits against cost-related parameters. Future research should systematically incorporate social dimensions into multi-criteria frameworks to reflect the full value of retrofit investments and align with just transition principles. In operational terms, this could involve the co-design of retrofit scenarios with stakeholders, the use of qualitative scoring tools (such as REBAT), or the inclusion of distributional equity measures in cost–benefit comparisons—ensuring that retrofit interventions do not unintentionally widen social disparities. Furthermore, the integration of formal frameworks such as Social Life Cycle Assessment (S-LCA) or Social Return on Investment (SROI) could enhance the consistency and comparability of social impact evaluations, providing a more holistic understanding of retrofit benefits.