A tool to help make important choices in the financing of building energy upgrades is discussed in the International Journal of Decision Support Systems. The system offers the promise of clarifying this often murky process given the Europe’s ageing buildings, and could improve necessary investment.
Ioanna Andreoulaki, Aikaterini Papapostolou, Charikleia Karakosta, and Vangelis Marinakis of the National Technical University of Athens in Greece, used their home country as a case study, but their findings will be equally applicable throughout the European Union. Indeed, they demonstrate how a structured decision-making framework can better align private capital with the sustainability targets.
Buildings are responsible for about 40% of energy consumption and over a third of carbon emissions in the EU. They are thus a major focus of the bloc’s climate and energy agenda. As such, the European Commission has launched initiatives such as the Energy Efficiency Directive and the Renovation Wave, aimed at accelerating the upgrade of inefficient buildings. Yet despite these policies, actual renovation rates have remained disappointingly low.
One of the main obstacles is the financial uncertainty surrounding investment in sustainable power options. Investors face a difficult task in evaluating which energy-saving measures offer the most compelling combination of cost-effectiveness, carbon reduction, and, of course, long-term financial returns. After all, they are not going to invest simply for the green credibility, but expect a profit. Conventional financial models often fall short of accounting for the full complexity of this kind of decision.
The researchers adapted multi-criteria decision analysis (MCDA) to the context of building renovations. MCDA is a structured framework that supports decision-making when multiple, sometimes conflicting, factors must be taken into account. The specific approach employed in this study is called TOPSIS—the Technique for Order of Preference by Similarity to Ideal Solution. It works by scoring and ranking alternatives according to how closely they resemble a hypothetical “ideal” option that performs best across the various criteria.
Applying this method, the researchers evaluated 48 real-world renovation projects in Greece, focusing on private office buildings in the Attica region. The projects included a diverse range of interventions, from installing energy-efficient lighting and solar panels to upgrading heating, ventilation, and air conditioning (HVAC) systems and adding smart automation for energy control.
The analysis showed a clear hierarchy in investor appeal. Heating system upgrades stood out as particularly attractive, combining relatively low upfront costs with substantial energy savings. Other high-ranking measures included efficient lighting and renewable energy integration. In contrast, building automation technologies were rated lower, largely due to higher perceived complexity and longer payback periods, even though they have great potential for long-term savings.
The results offer a roadmap for public policymakers seeking to tweak incentive schemes and encourage sustainability investment. This suggests that while market forces may naturally gravitate towards HVAC and lighting upgrades, more strategic policy support is needed to encourage investment in less immediately appealing, but important, technologies such as automation.
Andreoulaki, I., Papapostolou, A., Karakosta, C. and Marinakis, V. (2025) ‘A decision-making approach based on the TOPSIS method for supporting energy efficiency financing in buildings’, Int. J. Decision Support Systems, Vol. 5, No. 5, pp.1–36.