As climate change becomes a global concern, policymakers and practitioners are paying increasing attention to low carbon development in urban building zones. Among various measures, energy-saving renovations of existing residential buildings have become among the most vital developments for reducing carbon emissions in China. However, Quality failures—such as improper installation of steel nails or missing rivets defined as completed work that does not comply with prescribed technical standards—occur frequently during construction processes. These quality failures, representing a gap in policy implementation for residential building energy renovations, have received relatively little academic attention. This research seeks to address this gap by applying policy-network analysis to two case studies of renovation projects in Inner Mongolia in China, examining how actor interdependencies and adoption of policy instruments contribute to quality failures. The findings indicate that market-based policy instruments incur significant administrative costs, thereby impeding the maintenance of project quality. Additionally, mandatory policy instruments frequently lead to goal displacement at various governmental levels, further compromising the quality of energy renovation projects. Conversely, involving residents as a voluntary policy instrument can alleviate financial pressures on local governments while enhancing oversight of renovation quality. Nonetheless, this approach may impose financial burdens on economically disadvantaged groups. Based on these results, it is recommended that the government adopt a nuanced combination of policy instruments to minimize quality failures and realise the energy-efficiency potential of residential renovation initiatives.