Who pays, who benefits? Multi-stakeholder perspectives on residential renovation strategies in three German neighbourhoods

Extended abstract 7-182-26

Decarbonising heat supply in residential neighbourhoods is a key challenge for achieving climate neutrality in the building sector. Strategic heat planning therefore requires integrated approaches that combine building renovation measures with low-carbon heat supply solutions. However, existing studies often assess such transition pathways either from an individual investment perspective or from an aggregated societal viewpoint. The interaction between different stakeholder perspectives and incentive structures remains underexplored, despite being highly relevant for the practical implementation of local heat transition strategies.

Our analysis combines detailed building-level heat demand modelling with the tecno-economic perspective. In total, 1,459 modernisation concepts across three representative pilot neighbourhoods in Germany (Karlsruhe, Bochum and Leipzig) were evaluated. The analysed pathways include different renovation depths of the building envelope as well as decentralised and centralised heat supply technologies.

To assess these pathways, a newly developed multi-perspective economic evaluation model (EconHEAT) was applied. The model combines approaches from cost–benefit analysis and stakeholder-oriented energy system assessment. Four stakeholder perspectives are considered simultaneously: (i) tenants, accounting for energy expenditures and rent increases due to modernisation levies; (ii) landlords and housing providers; and (iii) owner-occupiers and (iv) society, including monetised greenhouse gas emissions and air pollutant externalities; 

Our results reveal a substantial mismatch between the tenants’ perspective and privately attractive investment decisions. While highly efficient and low-carbon heating concepts frequently minimise total societal costs, they are often economically unattractive for individual actors under current market conditions. In particular, the findings provide strong evidence of persistent landlord–tenant dilemmas: capital-intensive renovation measures and centralised supply systems can improve profitability for landlords, while simultaneously increasing financial burdens for tenants. In contrast, decentralised renewable heating options may reduce tenant costs but provide limited incentives for housing providers. Across the analysed scenarios, no fully warm-rent-neutral renovation pathway could be identified.

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