The existing residential buildings in the European countries are rather old and often fail to meet the current energy performance criteria. In Sweden, about 45% of the existing residential buildings have been constructed before 1960. Considering the significant contribution of existing buildings to Greenhouse Gas emissions, improving buildings energy performance could considerably help to achieve the national targets. Sweden’s fourth national action plan calls for 45% reduction in final energy use for heating of buildings by 2050, compared to 1995. Deep energy renovation of buildings envelope would significantly contribute to heat demand reduction. However, it is often subject to complex challenges from economic perspectives.

In this thesis, the cost-effectiveness and cost-optimality of building energy renovation have been studied in order to provide knowledge on where to start building renovation, in which order and to what extent. It aims at suggesting cost-effective approaches for prioritising the implementation of energy renovation measures in residential buildings, considering different techno- economic scenarios. An extensive building energy simulation work and analytical analysis were performed on a multi-family building and single- family houses.

The findings suggest how to prioritise the energy renovation of different envelope components in buildings located in different outdoor climates from energy saving and cost-effective perspectives. The findings indicate that the energy renovation of older buildings in northern climate zones are more cost- effective, compared to less old buildings in southern zones, when renovated to a cost-optimal level. The older buildings offer more energy saving when renovated to a cost-optimal level, compared to less old buildings or those in southern zones. The contribution of climate zones to the cost-effectiveness of energy renovation varies significantly in different components, depending on their level of exposure to outdoor climate.

An optimisation exercise was done in order to maximise energy saving by renovation of building envelope components under budget constraint condition. The enumerative algorithm of Brute-force was employed for this optimisation problem. The results suggest optimum renovation packages which could offer as much energy saving as a limited budget allows. It helps to develop a forward-thinking perspective that would guide individuals and financial institutions in their investment plans and incentives allocation policy.