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How to define adequate boundary conditions

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The assessment of cost effectiveness requires properly defined boundary conditions in order to properly depict the present state and future development of the market.

The duration of the period under consideration, the future energy price increase, as well as the consideration of interest is essential for assessing the economic advantageousness of an energy related modernisation. For this purpose, different conditions may be chosen depending on the available data, the state of knowledge, and the perspective.
Static procedures only take into account a few of these conditions, but price increases and adequate target rates, for example, are not considered. Dynamic procedures offer a better assessment as they also take into account different future developments (among others, increases in energy prices) through boundary conditions. Sensitivity analyses with different scenarios, such as for energy price increases, may be useful in individual cases.

The boundary conditions, on which the release of the current Energy Saving Ordinance was based, can be found here. The following conditions may be chosen as examples in course of economic assessments of energy modernisation measures in buildings. In individual cases, it may be useful or necessary to choose different conditions.

Boundary conditionPossible settings
Period under consideration

Technical lifespan or default value:

  • recommended for technical building services: 20 years
  • recommended for shell components: 30 years

    According to European Directive / Delegated Act:

  • measures on residential buildings: 30 years
  • measures on non-residential buildings: 20 years
Lifespan of measuresee table "technical lifetime"
Adequate target rate
(nominal values)
  • level of individual interest for loans or
  • orientation along statistics (German Federal Bank) or
  • default value e. g. 4.0 %/a (nominal)
Energy price
  • individual price from supplier (mean value of previous years) or
  • reference values from table "energy prices"
Increase of energy priceOrientation along official predictions or default value:
e. g. 2.4 %/a (nominal)
Inflation rate1.0 %/a (nominal)

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