Risk analysis on housing energy retrofitting in China with transaction costs considerations

Abstract

In China, majority of residential buildings constructed before 2000 remain poor energy performances due to few regulations on energy conservation before 2000. Thus there is a great potential for energy savings in China’s residential buildings. However, in the current situation it is difficult to this make full use of this energy saving potential. The development of housing energy retrofitting (HER) in China is still slow due to risks, such as unexpected payback period, reliability issues, etc. Some of risks are due to bounded rationality and opportunism, which induces TCs, such as information searching cost, negotiation cost, etc., in HRE projects. This study aims to investigate risks of HER projects from planning to operation with TCs considerations.
First, literature on the status quo of housing energy retrofitting in China will be reviewed; Second, this study will review on the generic risks of HER collected from international projects and apply TCs theory to reveal the hidden risks during HER process; Third, it will propose a risk framework with TCs considerations for China by relating the risks to the stage/stakeholders in China, for future empirical study.