**1. Introduction**

Energy use in buildings causes 36% of the CO<sup>2</sup> emission in the European Union (EU). This is why the Energy Performance of Buildings Directive (EPBD) declares energy efficiency goals for new buildings in the European Union [1]. However, most buildings in the EU have been built before the EPBD regulations, which is also true for Finland. Relying only on new constructions is too slow to impact CO<sup>2</sup> emissions reduction [2]. Thus, the EPBD has been updated with a requirement for each EU member state to create a roadmap for the renovation of existing buildings [3]. More concretely, in a recent renovation strategy, the European Commission calls for a 60% reduction in the carbon emissions of buildings by the year 2030 [4]. Already, many studies have been done to find the optimal deep retrofit designs for various building types, to minimize cost and energy consumption.

### *1.1. Localization of Retrofit Solutions*

Building retrofits are a timely issue in all parts of the world, both in countries in hot climates seeking to reduce cooling demand and countries in cold climates trying to reduce heating demand. Depending on the building type and climate, the optimal technical solutions are different. Some influential environmental factors are ambient temperature, humidity and solar radiation intensity. On the building-side, differences can arise, for example, from electric load patterns, the use of hot water, and occupational schedule. National policies also influence results, as they may determine the

framework for solutions by setting, for example, the base efficiency levels of the current building stock and the requirements for energy efficiency of renovation measures.

Optimization and dynamic building energy simulation have been popular tools for building-related research. For example, in a hot and humid Indian climate, simulation-based optimization was used to design a residential building envelope retrofit, based on phase-change materials and insulation layers [5]. Heat gain in the building was reduced by up to 33.5% after optimal retrofits. A review on building façade retrofits found that, in cooling dominated climates, façade retrofits can reduce energy demand by 15% to 53% [6]. In addition to envelope retrofits, a study based on a South African apartment building included solar panel installation as a building retrofit measure [7]. By optimizing net present value, payback period, and energy savings, energy consumption reduction of 36% to 43% was achieved with a payback period of four years or less. Retrofits of residential villas in Dubai were designed in Reference [8]. A two-stage parametric analysis was used, such that each retrofit measure (insulation, windows and air conditioning) was simulated by itself and then a combined retrofit set was formed based on costs found from a National Renewable Energy Laboratory (NREL) database. In the old buildings of Dubai, with low window-to-wall ratios, thermal insulation of walls was found to be beneficial along with the installation of a more efficient air-conditioning system. Replacing relatively new windows with improved ones was not cost-effective. Since no price data from the United Arab Emirates was available, prices from the USA were used instead. This highlights the need to perform national studies on building retrofits, to provide more information to both businesses and individuals, as well as policymakers.

Air infiltration was found to be of low importance in warm Mediterranean climates [9]. This is because of low temperature differences between indoor and outdoor air compared to cold climates, where infiltration is significant. Temperate climates have their own problems and solutions. Minimizing the cost and greenhouse gas emissions of a retrofitted German office building [10] highlighted solutions, such as improved thermal insulation, increased air-tightness, and a low temperature gas boiler. This is an example of a locally optimal solution, as electricity is very expensive in Germany, while natural gas is relatively cheap, preventing the use of heat pumps (HP). In a study about French houses, thermal insulation of external walls was found to have the highest impact on emissions [11]. On the one hand, deep renovation was not feasible using the French 9-year home improvement loans due to the short amortization period. On the other hand, in a regional level study on the French building stock, 35% reductions in greenhouse gas emissions were obtained with negative costs, when a 50-year horizon was utilized [12]. Retrofits to both the building envelope and heating system were needed to mitigate 70% of emissions. The observed costs were less than 50 €/t-CO2. This highlights the need for long-term financing, which could be provided through the EU.

Many retrofit optimization studies have also been made for cold climates. Optimization of retrofits on an old Swedish multi-family building showed that improvements to the building envelope or ventilation system were not cost-effective [13]. In fact, the only economical retrofit action was the installation of energy-efficient windows. Another retrofit optimization study of 12 historical residential building types in Sweden also revealed window upgrades as a good solution to improve energy efficiency [14]. Thermal insulation of walls and roof was also cost-effective in many cases. Deep energy retrofits of older Finnish detached single-family houses were examined in Reference [15]. Multi-objective optimization was used to minimize costs and emissions in four age categories of buildings with five different heating systems. Air-source heat pumps were used for auxiliary heating in all optimized buildings and switching from a wood or oil boiler to a ground-source heat pump (GSHP) was the most cost-effective retrofit measure to reduce CO<sup>2</sup> emissions. Similarly, in studies on old Finnish apartment buildings, GSHP was also the most effective way to reduce primary energy consumption [16,17]. An opposite view was presented in a Swedish study that accounted for the whole energy generation chain when considering the energy system retrofit of code compliant and passive level single-family houses [18]. Depending on how the grid electricity was generated, heat pumps could be more CO<sup>2</sup> intensive than district heating (DH) produced by combined heat and

power (CHP) plants. This effect stems from heat pumps having to use more high emission electricity during peak demand hours. However, another study found that if all Finnish single-family houses were to perform a deep energy retrofit, the reduction in direct electric heating demand in part of the building stock could compensate for increased heat pump electricity demand in other buildings [19]. At a large scale, the total peak electricity demand could even go down. In Canada, which has a cold climate but with more solar energy than the Nordic countries, solar photovoltaic-thermal collector retrofits in the housing stock could reduce greenhouse gas (GHG) emissions by 17% [20]. Similarly, installing air-to-water heat pumps could results in 23% reduction in GHG emissions [21]. A review of façade retrofit measures showed that façade retrofits are most effective in heating dominated climates, especially ones with high heating degree day values [6]. The review found a range of 7% to 62% energy demand reduction in various studies.

The optimal solutions are influenced by the energy markets and national energy generation systems. The generation mix and local policies influence emissions and the relative benefits of one retrofit measure over another. National energy prices and emission factors were reported in a study that analyzed the cost and emission impacts of energy retrofits in European cities in various climates [22]. For example, electricity cost and emissions were low in France, where electricity is mainly generated by nuclear power [23] and high in Germany, where coal and natural gas are major fuels [24]. Similarly, electrified heating using heat pumps has been economically sensible in Finland [15–17], where the emissions and cost of electricity are relatively low. While the EU calls for electrification of heating, a study based on Canada found that electrification could also increase emissions depending on the local energy infrastructure [25]. This shows that large-scale actions need to be determined according to the local conditions. The most effective solutions will not necessarily be the same even for countries with similar climates. Things like the locally typical façade structure or cost of labor can change the best solutions, even if system efficiencies seem similar on the surface. Thus, the results of any optimization should not be directly utilized in a different context, as many influential factors can change the optimal solutions.

#### *1.2. Retrofits in Di*ff*erent Building Types*

Most retrofit studies focus on residential buildings, since they form the majority of the building stock. Other building types have also gained attention. For example, a Finnish office building retrofit was optimized in Reference [26]. The optimized variables were cost and emissions, but the study also took into account the thermal comfort. Thermal comfort of workers could account for 75% of building life cycle cost (LCC). Cost-optimal retrofit solution with a GSHP could reduce CO<sup>2</sup> emissions by 63% while also generating cost-savings. In a study done on large USA office buildings [27], simply adjusting the heating and ventilation setpoints had the potential of reducing energy consumption by 60% in moderate climates but not in cooling dominated climates. In Spain, on the other hand, heating and cooling set points adapted according to the temperature of the previous days were successfully used to reduce both heating and cooling energy consumption by a total of up to 45% [28]. An office building in Hong Kong saw emission reduction of 43% after retrofits [29]. A 19% reduction in CO<sup>2</sup> emissions was obtained in a Turkish university campus building using an optimal combination of energy conservation measures [30]. The energy retrofit of an Italian industrial building with a workshop included measures, such as envelope upgrades, ventilation heat recovery, solar energy and active set point controls [31]. The best out of 1320 examined configurations reduced CO<sup>2</sup> emissions by over 70% without government subsidies. The retrofit study of an Italian hospital involved heat recovery, solar shading and envelope upgrades [32]. With various budget limitations, emission reductions of 180 to 1260 t-CO<sup>2</sup> were obtained. Historical buildings can be a difficult target for retrofits, as visible changes could compromise their special cultural value. However, energy retrofits can also be a protective tool, as improved energy efficiency can ensure that historical buildings will be used even in the future [33].
