Schneider Electric has released a new report on decarbonizing buildings through retrofitting, indicating that deep renovations are feasible, but the payback period can extend up to 30 years. In contrast, AI-based energy performance platforms can reduce this period to around one year, offering up to 30 times more efficient and economically viable solutions.
"30 years payback period and reasonable solution are just two phrases that do not align. It is just too slow. If we look at the data for non-residential buildings, especially huge offices, they face significant challenges in achieving energy efficiency in old ways," said Donatas Karčiauskas, CEO of Exergio, a company that develops AI-based solutions for buildings’ energy performance. "We already have solutions with payback periods of just a few years, so classical retrofitting is just not the right fit."
The “Decarbonizing Buildings to the Benefits of Consumers and System Operators” report includes a comprehensive analysis of payback periods for both residential and non-residential buildings across different continents. Considering non-residential stock, the analysis consists of large offices, hospitals, small hotels, secondary schools, and strip malls, for both new constructions and old buildings.
Overall, it showcases that deep renovation payback periods for old buildings stretch up to 30 years. The longest periods are projected for large office buildings worldwide, where southern and northeastern USA, Canada, Eastern China, and Europe (particularly France, Italy, Denmark, and Spain) should be at most concern.
“From our experience, managing energy systems in large office buildings, where data from thousands of meters must be analyzed continuously, is unique and extra challenging. It requires adapting to dynamic conditions both inside and outside the building,” Karčiauskas explained. “AI tools can predict optimal settings to ensure efficient operation.”
For instance, AI-based energy performance platforms can adjust heating and cooling systems based on real-time data, reducing energy use in unoccupied areas and optimizing it before peak usage times. This approach maintains comfort for end-users while reducing energy waste up to 20%. AI-based platforms have a payback period of 1 to 3 years.
“Overall, this report provides very interesting and thought-provoking results. We often hear that a payback period of around 10 years is already unattractive for investors and businesses, right? There might even be a compromise, but one does not expect it to be 3 times longer than that. It just proves that the industry is still lagging behind, and AI applications are not even mentioned in the report,” explained Karčiauskas.