Influence of building renovation on the relative performance of individual and collective heating solutions in existing residential neighborhoods

(2026)

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Abstract
Existing residential buildings account for a significant share of energy consumption and greenhouse gas emissions, largely due to their heating needs. Since most of these buildings will remain in use for decades to come, improving the building envelope and electrifying their heating systems are two key levers for reducing these emissions. Electrification can be achieved either at the building scale through individual heat pumps or at the neighborhood scale through district heating supplied by a centralized heat pump. However, how progressive building renovation affects the relative performance of these two solutions is still not well understood, making it difficult to identify the most appropriate strategy for a given existing neighborhood. This study addresses this question using a techno-economic and environmental optimization model. It compares the performance of both solutions across different renovation levels and configurations of existing residential neighborhoods. The results show that their economic performance often remains remarkably close despite fundamentally different operating principles. This is mainly because renovation gradually shifts the cost structure from energy consumption toward investments in the building envelope. The results also show that the competitiveness of district heating depends not only on the amount of heat supplied relative to network length, but also on the geometry of the network itself as renovation progresses. In addition, economically optimal renovation scenarios do not necessarily coincide with those that minimize greenhouse gas emissions. In conclusion, the level of building renovation alone is not sufficient to determine whether an individual or a collective heating solution should be preferred. The choice also depends on neighborhood characteristics and on the objective being pursued, whether the aim is to minimize costs or greenhouse gas emissions. Future work could extend this approach to more heterogeneous neighborhoods, including tertiary buildings, and assess how future electricity prices, changes in the electricity mix, social acceptability, and the evolution of heating and energy infrastructures affect the relative performance of these two solutions.