ORIGINAL ARTICLE

Understanding barriers to energy-efficiency renovationsof multifamily dwellings

Jenny Palm & Katharina Reindl

Received: 21 August 2016 /Accepted: 13 July 2017 /Published online: 26 July 2017# The Author(s) 2017. This article is an open access publication

Abstract We have studied how energy efficiency isdiscussed by professionals during renovation of multifam-ily dwellings, in order to capture how barriers in relation toenergy measures are appearing, disappearing and trans-formed during the process. We did participatory observa-tions of renovation meetings, conducted interviews withthe involved professionals and studied-related documents.Our intentions have not been to assess decisionsmade, butto follow the process to gain a different understanding ofhow barriers can be understood during renovations. Wecan conclude that the renovation process is based on acomplex series of contractural relationships, whereassymetric information and lack of common goals con-tribute to split incentives. The results also show that thehousing company’s internal organisation becomes a bar-rier where assymetric information and split incentives alsobecame an in-house barrier. The decisions were oftenbased on bounded rationality where calculations weresurprisingly absent in meetings and during discussionson energy measures.

Keywords Energy efficiency. Renovation . Barriers .

Buildings . Housing sector

Introduction

In its 20–20–20 strategy, the European Commis-sion (EC) has estimated the technical energy-saving potential of various sectors as 25% inmanufacturing, 30% in commercial buildings and26% in private households. The Swedish nationalstrategy for the energy-efficiency renovation ofbuildings (a response to the EU’s Energy Effi-ciency Directive) states that 75% of existingbuildings will need comprehensive energy-efficiency renovation measures by 2050, i.e.1,875,000 apartments will need renovation(Swedish National Board of Housing Buildingand Planning and Swedish Energy Agency2013). The escalating need for renovation of thesebuildings gives a window of opportunity to im-prove energy efficiency and approach internation-al and national energy and climate goals.

However, both policy documents and the aca-demic literature state that cost-effective energymeasures are not always implemented. This dis-crepancy between optimal and actual implementa-tion is referred to as the energy-efficiency gap orthe energy paradox (see e.g. Blumstein et al. 1980;Hirst and Brown 1990; Gruber and Brand 1991;Stern 1992; Decanio 1998; Jaffe and Stavins 1994;Sanstad and Howarth 1994; Weber 1997; Sorrell

Energy Efficiency (2018) 11:53–65DOI 10.1007/s12053-017-9549-9

J. Palm (*) :K. ReindlDepartment of Thematic Studies - Technology and Social Change,Linköping University, 581 83 Linköping, Swedene-mail: jenny.palm@liu.see-mail: Jenny.palm@iiiee.lu.seK. Reindle-mail: katharina.reindl@liu.se

J. PalmInternational Institute for Industrial Environmental Economics(IIIEE), Lund University, Box 196, SE-221 00 Lund, Sweden

2004; De Groot et al. 2001; Schleich and Gruber2008; Backlund et al. 2012).

This energy paradox can be explained by the exis-tence of barriers to energy efficiency, defined as postu-lated mechanisms that inhibit investments in technolo-gies that are both energy efficient and economicallysound (Sorrell 2004). Such barriers explain the reluc-tance to adopt cost-effective energy-efficiency measuresderived from mainstream economics, organizationaleconomics and organizational and behavioural theories.There are also institutional or structural barriers to ener-gy efficiency that do not directly affect this Bgap^,although they do affect overall energy efficiency(Thollander et al. 2010).

Energy-efficiency barriers have been categorizedin various ways. Sorrell et al. (2000) distinguishthree main categories of barriers stemming frommarket failures, organizational failures and non-failures, while Weber (1997) classifies the barriersas institutional, economic, organizational andbehavioural. Hirst and Brown (1990) divide thesebarriers into two broad categories: structural andbehavioural. The classification of barriers is notunambiguous, as a single type of real-world phe-nomenon may be explained by several theoreticallyderived barriers (Weber 1997; Palm and Thollander2010; Leurent et al. 2017). The actual potentiallevel of energy efficiency depends on which theo-retical view is applied, which is why, for example,technological and economical potential might differ(Jaffe and Stavins 1994; Thollander and Palm2013). Thollander et al. (2010) usefully treatenergy-efficiency barriers as a dominant analyticalframework for understanding the energy-efficiencygap. However, it is important to take a criticalview of Bbarrier theory^ and be aware of its lim-itations and possible development paths (Shove2010; Palm and Thollander 2010; Janda 2011).Defining and redefining identified energy-efficiency barriers are important in order to chal-lenge existing solutions and develop new, creativeways of approaching companies and other actors.Not least, it is important to pay greater attention tosocial practices in companies and existingdecision-making procedures (Palm 2009).

In this article, we follow how energy-efficiency mea-sures are discussed in renovation projects in a municipalhousing company in Sweden. Using observations andinterviews, we investigate what different barriers

appears, disappears and transform during the renovationprocess, and what we can learn about barriers by fol-lowing the discussion about one suggested measure-ment more in-depth.

There are primarily three different tenure types in theSwedish multifamily building stock: municipalityowned rental apartments, privately owned apartmentsand residential owned apartments. We have studiedmunicipally owned rental apartments. The public hous-ing sector is very large in Sweden compared to othercountries in Europe and comprises as much as 68% ofall dwellings (Meijer et al. 2009). Public housing com-panies are primarily owned by local municipalities. Theprinciple behind the public housing is to provide accessfor everyone and without profit. In Sweden, there is noupper limit in income for those who rent an accommo-dation as is the case with those kinds of accommoda-tions in the rest of Europe. The rent is set in negotiationsand not by the housing market. The Swedish Union ofTenants is negotiating rents on behalf of their members,the tenants, on a yearly base, with the landlords.

We followed the planning and design phase of threerenovation projects in a medium-sized Swedish city. Wechose the planning and design phase because the deci-sions made in this phase determine the final results(Konstantinou and Knaack 2013). This company hasboth the goal of reducing the energy use throughout itshousing stock by 25% of purchased energy by 2025,compared with 2011 levels and the explicit goal ofconducting energy-efficiency renovations.

Identified barriers to energy efficiencyin the building sector, construction industryand renovation projects

This section discusses earlier research on barriers andbuildings ending with a table showing common barriersidentified. There are relatively few published studies onexisting buildings (Afshari et al. 2016), thus the litera-ture review was also extended to the building sector ingeneral. For this reason, the studies have different focusareas, some emphasizing the renovation of individuallyowned homes, others emphasizing multifamily build-ings, buildings in general, or low energy and nearlyzero-energy building (nZEB) renovations. Studies iden-tifying and discussing barriers in relation to the tenantsare excluded in this article. We focused the review on

54 Energy Efficiency (2018) 11:53–65

Western countries in order to have similar conditions asin Sweden.

Technical and organisational barriers as well as bar-riers related to the construction industry can vary be-tween different studies. Innovations and energy-efficientbuilding solutions are often not used in the (Swedish)building sector as research on technological change inthe building sector points to a lack of transformationpressure, an aversion to change or territorial thinkingand path dependency (Persson and Grönkvist 2015) .

Other technical barriers can be found in differ-ent studies. Discrepancies between predicted andactual savings can also be observed. A renovationmight lead to improved thermal comfort standardsbut fail to realize expected energy savings. Thiscan be explained, for example, by the impact ofthermal bridges, insulation gaps and occupant useof more heat after a renovation (Dowson et al.2012). Poorly realized savings may also stem fromincreased heating use because of people’s behav-iour and thermal comfort take-back after a renova-tion and the installation of a new heating system(Dowson et al. 2012).

Sorrell (2003) states that energy-efficiency opportu-nities are also commonly missed by the oversizing ofheating, ventilation and air-conditioning (HVAC) sys-tems. Another barrier is the fragmentation of the con-struction industry, which involves many different actorsand stakeholders working together in temporary coali-tions. These diverse stakeholders with varied interestscan in themselves constitute a barrier (Häkkinen andBelloni 2011; Lindkvist et al. 2014; Sorrell 2003). Con-struction projects can be described as temporary coali-tions of firms working together through subcontracting(Sorrell 2003). This leads to complex and detailed con-tracts as well as to characteristically low-trust, adversar-ial relationships.

The lack of time that contractors and suppliers haveto prepare bids combined with low profit margins andlack of trust can lead to inappropriately specified bids.One also observes a tendency to reuse bids from previ-ous projects, with only slight modifications to fit thecurrent contract, which can lead to outdated specifica-tions and ignoring the specific client’s needs (Sorrell2003). Time is also another important factor as, forexample, it might be easier or less time consuming todesign a crude building instead of spending additionaltime and effort on new solutions, even though they mayreduce capital and operating costs. This leads to a

tendency to maintain current practices (Ahn et al.2013; Sorrell 2003; Palm and Reindl 2016).

A lack of project integration can result from a lack ofcommunication and mutual understanding among theinvolved professional disciplines. This poor integrationis reinforced by the fact that the construction industry isfragmented, the dominant project form beingsubcontracting with new teams of designers, builders,and suppliers typically being used for each project. As aresult of these conditions, coordination and learning areinhibited and there is no latitude to develop skilled andintegrated teams (Sorrell 2003; Palm and Reindl 2016).

Lack of information about existing renovationmeasures can also constitute a barrier (Baek andPark 2012; Phillips 2012). Varying energy-efficiency ambitions also have an impact. In aproject, technical solutions and knowledge of pos-sible measures need to go hand in hand withenergy-efficiency goals (Lindkvist et al. 2014).

Financial difficulties constitute another com-monly mentioned barrier to improving energy effi-ciency in dwellings (Ahn et al. 2013; Baek andPark 2012; Dowson et al. 2012; Häkkinen andBelloni 2011; Lindkvist et al. 2014; Serpell et al.2013; Persson and Grönkvist 2015). Renovationcosts are often very high, even in fairly newbuildings (Baek and Park 2012). Energy-efficiency goals are often secondary to economicconsiderations. In relation to rental properties life-cycle costs are typically not taken into consider-ation and energy-efficiency options are overlooked,even though the return rates would substantiallyexceed the capital costs. This initial cost-premiumbarrier causes developers and investors to hesitateto adopt sustainable practices in their investments(Lindkvist et al. 2014). Serpell et al. (2013) treatthe need to introduce policy measures such asreduced corporate taxes if energy-efficiency andsustainability investments are to be made. In addi-tion, a building’s energy performance is viewed asless important than its investment value. Even ifenergy performance raises the asset value of abuilding, it is still not easy to show this increasedvalue to possible buyers or renters/tenants (Baekand Park 2012).

The effects of improved energy efficiency are diffi-cult to recognize, and even a successful energy-efficiency measure can be cancelled out by increasingenergy prices. Although the operating expenses of, for

Energy Efficiency (2018) 11:53–65 55

example, lighting or heating may be reduced by a ren-ovation, the cost is usually high and the pay-back periodmight be long (Baek and Park 2012; Högberg 2011;Cooke et al. 2007).

Contractors are usually selected through competitivetendering and decisions are typically based on the low-est price. As a result, price competition is fierce andmargins are low, both of which are conditions thatencourage cost cutting to make the tender as thrifty aspossible to maximize profits. Competitive tendering canbe seen as a key reason for inefficiency in the construc-tion industry. A building project process can be de-scribed as a series of sequential and separate operationsuniting various temporarily joined people, such as indi-vidual designers, inspectors, and suppliers. Thesegroups of people usually have no stake in or commit-ment to long-term project success (Sorrell 2003). Theseempirically found barriers are summarized in Table 1.

Methodology

The most common way to study barriers is to map theirexistence in a sector. Few studies have conducted qual-itative in-depth analyses and followed barriers through-out a project (Thollander et al. 2010; Thollander andPalm 2013), which is what we do here in analysing threerenovation processes. We conducted a case study inorder to get a deeper understanding of the energy-efficiency discourse in the company.

The three followed renovation projects take placewithin the same housing company. Thus, it is regardedas one case (the housing company), in which threerenovations are conducted. This makes it possible andeasier to discuss the role of the company strategiesregarding energy efficiency and the renovation.

The municipal housing company is in a medium-sized Swedish town and rents out apartments, many ofwhich are in multifamily dwellings. The three renova-tion objects for our study were built in the 1950s and1960s and are located close to the city centre. Thebuildings were selected for renovation as they werehaving issues with ventilation, piping, or different typesof damages. Table 2 gives a more detailed overview ofthe buildings.

The data collected include field notes from the par-ticipant observations, interview transcripts, and in addi-tion, the researchers were granted full access to relevant

Table 1 Summary of most common identified barriers to energyefficiency in buildings in earlier research

Category Theoretical barriers Comments

Organisationof themarket

Fragmented market Fragmented industry andtemporary coalitions,(Häkkinen and Belloni2011; Lindkvist et al.2014; Sorrell 2003),issues withsubcontracting (Sorrell2003). Designers,consultants andsubcontractors lacklong-term interest in abuilding (Sorrell 2003)

Lack of project integrationand communicationbetween involvedactors (Sorrell 2003;Palm and Reindl 2016)

Exhortations to considerwhole life costs areweak (Sorrell 2003)

Split incentives Diverse stakeholders withvaried interests(Häkkinen and Belloni2011; Lindkvist et al.2014; Sorrell 2003)

Building servicescontractors haveincentives to oversizeequipment (Sorrell2003)

Lack of time Lack of time, reuse of bidsdue to lack of time, andno time forbrainstorming orcreativity, (Sorrell2003) and tendency tomaintain currentpractices (Ahn et al.2013; Sorrell 2003;Palm and Reindl 2016).

Less time consuming todesign a crude buildinginstead of spendingtime on new solutions,even (Ahn et al. 2013;Sorrell 2003; Palm andReindl 2016).

Information Imperfect information Lack of information andknowledge aboutenergy-efficient andsustainable materialsand products (Baek andPark 2012; Phillips2012),

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internal documents by the company. The data collectionperiod was from November 2012 to October 2014.

In total, the researchers observed 18 planning anddesign meetings. Each project had six meetings. Thegeneral timeframe for the planning and design meetingswas around 3 months, followed by the procurementprocess. Notes were taken on all meetings (Clark et al.2009; Johnson and Turner 2003).

In total, 30 semi-structured interviews were conduct-ed with all professionals involved in the planning anddesign phase for all three projects. This includes all themembers of the project group for the planning anddesign phase (25 interviews) and all the members ofthe investment group (five interviews). The projectgroup comprised both external consultants and internalemployees. External consultants consisted of architects,fire consultants, construction consultants, HVAC con-sultants, building engineers, energy audit consultants,noise consultants, and an electricity controller. Internal-ly, the housing company also has an HVAC and elec-tricity function having the same role as the external one.In addition there was a project manager, area manager,rent negotiator, energymanager, real estate developmentmanager and trainee. Three people were interviewedtwice (two project managers and the real estate devel-opment manager) for further clarifications. Internally,the project group involved similar people, except fordifferent project managers, area manager and trainees.Externally, one HVAC consultant and architect partici-pated in two of the projects and the electricity consultantwas the same on all three projects.

Table 1 (continued)

Category Theoretical barriers Comments

Behaviouralbarriers

Lack of sharingobjectives

Energy measures need togo hand in hand withgoals (Lindkvist et al.2014)

Other priorities Even if measures reduceenergy, it is high initialcosts and longpayback–prioritisationof competitivetendering with lowestprice (Ahn et al. 2013;Baek and Park 2012;Dowson et al. 2012;Häkkinen and Belloni2011; Lindkvist et al.2014; Serpell et al.2013; Persson andGrönkvist 2015)

Inertia Conservatism in thebuilding industry; lackof transformationpressure, aversion tochange, pathdependency, territorialthinking (Persson andGrönkvist 2015)

Bounded rationality Instead of being madebased on, for example,perfect information andcomplete rationality,decisions are oftenmade in constrainedenvironments that resultin limited, or bounded,decisions, i.e. non-optimal from a fullyrational point of view,i.e. rule of thumb isused (Sorrell 2003;Palm and Reindl 2016).

Technical Discrepancies betweenpredicted and actualsavings, e.g. due toinsulation gaps(Dowson et al. 2012)

Financial Energy performanceless valued thaninvestment costs

Building’s energyperformance is viewedas less important thanits investment value(Baek and Park 2012;Serpell et al. 2013;Lindkvist et al. 2014)

High investment costsand no LCCperspective

Initial cost premium, highcosts, long pay-off time,no life cost cycle

Table 1 (continued)

Category Theoretical barriers Comments

perspective, and lack offinancial incentives(Ahn et al. 2013; Baekand Park 2012; Dowsonet al. 2012; Häkkinenand Belloni 2011;Lindkvist et al. 2014;Serpell et al. 2013;Persson and Grönkvist2015)

External risk Success of energy savingdepends on energyprice (Ahn et al. 2013;Persson and Grönkvist2015; Sorrell 2003)

Energy Efficiency (2018) 11:53–65 57

An interview guide was used to determine the overallstructure of interview topics. In addition, each interviewincluded specific questions arising from each observedprocess and tailored to specific roles and jobs (Kvaleand Brinkmann 2009). The interview guide for the projectgroup comprised questions on their background and cur-rent job, how they thought the renovation process wasgoing, if there were differences to previous projects, whatis important to achieve with a renovation and difficultiesand obstacles with a renovation. Interviews for the projectgroup were conducted about halfway through each plan-ning and design phase of each renovation project. Theinterviews with the investment group were conductedtowards the end of the planning and design phase. Eachinterview was recorded and transcribed. The material wasstructured and thematic codes were created.

The interviewees’ perceptions were compared withother interviewees and with the documents and ourobservation notes. The validity of this study is in thisway supported by data triangulation, i.e. the use ofmultiple data sources and respondents (Maxwell 2005).

Results: barriers in renovation projects

Earlier studies have demonstrated that barriers are oftencited in explaining why renovations do not include

energy-efficiency measures. We became interestedto see how different barriers appeared and disap-peared and also transformed during the process. Inthe following, we will discuss two quite specificsituations when energy measures were discussedand where the decision on whether to implementa measurement or not changed during the process.But we start by giving a more general overview ofthe renovation processes studied.

General overview of the renovation processin the studied housing company

We will first describe the renovation process fo-cussing on the second phase, the planning anddesign phase, in which the content of the tenderdocument is determined (Fig. 1).

The planning and design phase in our case studieswas conducted by the property developer jointly with itsconsultants. The consultants hired in this phase werechosen from a list of consultants contracted throughpublic procurement for 3 years, a new procurementbeing conducted every 3 years. In our cases, the plan-ning and design phase can be seen as an action planningphase in which goals are broken down into sub-goalsand details are clarified or simply deleted from theagenda. This phase ends with a tender document.

Table 2 Characterization of the three renovation objects

Project 1 (RP1) Project 2 (RP2) Project 3 (RP3)

Built 1961 early 1950s 1961 (partly renovated in 1985)

Number of apartments 12 33 32

Floors 4 3 4

Energy consumption ofthe buildings

153 kWh m−2 y−1 141 kWh m−2 y−1 154 kWh m−2 y−1

Energy-relatedmeasurementsincluded in thetender document

District heatingwas installed andwill be keptHRV ventilationAttic (floor)/loft supplementary insulationwith 300 mm of mineral wool.

3 glazing and fitted with interior blinds. U-value: 1.1 W/m2,K. Windows withbalcony, U-values: 0.9 and 1.1 W/m2 K

Exterior doors and entrances. Insulationvalues, Umax = 0.8 and 1.1 W/m2 °C

Exterior walls supplementary insulation with100 mm mineral wool

Appliances, energy class A++

(This documentincluded nofigures)

Insulation of facadesand attics

Replacing windowsHRV ventilationchange as stoves

District heating installed and will be keptBuilding 1: mechanical exhaust air system iskept

Building 2: HRV ventilationAttic (floor)/loft additional insulation with400 mm blowing wool

3-glazing and fitted with interior blinds. U-value: 1.1 W/m2 K. Windows facingbalconies, U-values: 0.9 and 1.1 W/m2 K

Exterior doors and entrances. U-value betterthan 1.1 W/m2 K

Exterior walls with additional insulation of100 mm mineral wool

Appliances energy class A+

58 Energy Efficiency (2018) 11:53–65

The project manager and the consultants initiate theplanning and design phase, in which specific renovationmeasures are discussed and decisions are made aboutwhat to include in the renovation. When the projectmanager has a first draft of the tender document incor-porating the suggested measures, this is presented to theinvestment group. This group consists of the publichousing company’s management team, which com-prises the CEO, real estate development manager, busi-ness unit director, controller, and real estate manager. Itis the group’s task to make a preliminary decision on theproject orientation. In preparation for the final invest-ment decision, the investment group evaluates the se-lected measures and ideas and decides whether theyseem financially feasible. The final investment decisioncomes later in the process, and the preliminary orienta-tion decision is intended to make the investment deci-sion process smoother so that little will need to bechanged in the end. However, a project can go backand forth between planning and designmeetings and theinvestment group, and orientation decisions can bemade several times during the planning and designphase. The final investment decision determines whatthe tender document will ultimately look like (housingcompany internal process document; interview, e.g. In-ternal 4, 5, 6).

An economic framing of the renovations

More or less, all the interviewees meant that it wasBmoney^ that decided what energy-efficient measuresto implement. No LCC perspective was applied and inthe end energy-efficient measures were often regardedtoo expensive.

So first you want to do it, then it will cost and thenyou do not do it. Where it might, if one factored in30 years, the cost may have payed off […]. (Ex-ternal consultant 1)

The economic restrictions could also be seen during theproject meetings since the project group members them-selves adapt to an economic argumentation. Even the

standard energy measurements, which are com-monly used by the housing company, were notalways implemented due to initial cost premiumand lack of LCC perspective. Measures werediscussed in relation to whether they had a pay-off time of more or less than 6 years. If the pay-off time was presented as less than 6 years, theywere implemented. During the project meeting,such measures were the installation of energy-efficient appliances in the apartments and thelaundry room and also the installation of a heatrecovery ventilation (observation notes, e.g. 17Jan 2013; 14 Feb 2013; 15 Jan 2014).

The method for calculating the pay-off time ofenergy-efficiency measures was done according toan own defined formula. The housing companyrepresentatives reflected on the fact that they didnot yet really know how to calculate the pay-offtime of energy-efficiency measures. They statedthat the formula they used was too pessimisticcompared with others, with the result that energy-efficiency measures were easily rejected.

Yes, we are looking at different calculations…wehave said that we will implement energy measureswith a maximum pay-off of six years.… Then weopt for them without an investment decision. Butit is difficult in the case of changing windows …insulating façades … and we have also noticedthat other companies get a better pay-off than wedo. We have concluded that they probably justconsider the additional costs, for example, ofadding a third pane to a window, and then theygot a different pay-off time … so we are lookinginto that now. We feel that we calculate this toopessimistically. (Investment group 3)

Energy calculations were surprisingly absentduring the meeting and had low impact on thedecisions. In the projects, an HVAC or energyconsultant was assigned to do energy calculations,but the calculations were not presented at themeetings and it was unclear how and to what

Analysis and priori�zing

Planning and design

Procurement(tender

document)Renova�on

Fig. 1 Overview of therenovation process in the studiedhousing company

Energy Efficiency (2018) 11:53–65 59

extent these calculations actually were done and ifso how they were used. No energy calculationwas made for any of the renovation projectsbased on data or statistics of how much energythe buildings were consuming before the renova-tion, nor was a goal set regarding how muchenergy saving should be achieved with the reno-vation. The figures used were based on pastexperience and ‘standard buildings’ (interviewproject leader 1). Calculations were said to bemade, but it was not easy to get hold of themin all projects and in one project no one couldfind them or knew who had them. The lack ofcalculations contributed to a process character-ized by bounded rationality where decisionsbased on rule of thumbs were common.

Next, we will look into a conflict that appears aroundLED lamps and if to install them or not. In this conflict,several barriers appear related to contractural relation-ship, lack of common goals, assymetric information andsplit incentives.

The meaning of electricity efficiency measures, the caseof LED lamps

Within the housing company, there was a com-mon view that as many energy-efficiency mea-sures as possible should be implemented withinreasonable economic limits. We could howeverobserve that there was lack of intention to saveelectricity. The common view was electricity isnot an issue worth spending time on. The elec-tricity consultant said:

I have given the electricity manager at [name ofthe housing company] a list of measures thatwould save electricity and have short pay-offtimes, but they have not been implemented. …There are a lot of measures to implement, but theproblem is that electricity [consumption] is toosmall in relation to the total. So you don’t save25% in total if you reduce the electricity consump-tion by 50%. To save 25% you need to includeHVAC. (External 2)

One of the HVAC consultant said:

They don’t care so much about electricity – thereis so little… In the big picture, it costs nothing…

Even if you save 50%, it is like a drop in theocean. (External 3)

In general, one can say that there was a commonunderstanding that the measures making the greatestdifference regarding energy efficiency were related toventilation, window replacement, laundry rooms,heating systems and insulation as well as reduced airleakage.

However, in one of the projects LED lamps becameground for a rather prolonged conflict. The questionconcerned if to install LED lamps in the apartments ornot. The discussion took place between the area manag-er, the project leader and the external electricity consul-tant. The area manager was a proponent of LED lampsbecause he meant they are energy efficient, will bewidely used and popular in the future and they wereasked for by the tenants. The external electricity consul-tant strongly argued against LED lamps and saidamongst others:

Yes, I have the opinion that it is lobbying, it is toomuch trust in this. Let the others make themistake,we do not need to do them. [...] The energy savingis not so great as people think, there is less energythan a low-energy lamp, but it is not that amaz-ingly much lower […]. (External 2)

During the meetings of the project group no obviousdecision was taken. The discussions went back andforth. We asked the project leader and area managerwhat has happened in the LED discussion. The firstimpression, after talking to the project leader, was thatit was decided not to use LED lamps. The reason whyLED lamps would not be selected was that the technol-ogy was regarded as being too immature and thereforethe risk would be too big:

So we want to wait a bit more so that we do not doany mistakes that it becomes more expensive inthe end and we have to exchange the fixtures…(Internal 6).

About 1 month later, we interviewed the area man-ager. Then it seemed like the area manager had putpressure on other professionals in the project groupand LED lamps were selected after all.

I don’t think you can just see to the cost, but youmust also have an attitude about what we aredoing and sometimes it must simply be allowed

60 Energy Efficiency (2018) 11:53–65

to cost a little more. [...] And I think the relation-ship between us and the consultants are wrong. Ihad to have a discussion first with the projectleader, who referred me to the… person internallyresponsible for electricity, who has expertise inthis, who then referred me to the real estate devel-opment manager, who said that this is a strategicquestion and it is uncertain who takes the deci-sions. And then I became really angry. You haveto take responsibility for the decisions and thenyou have to know who decides and say what ourposition is in this. But then we agreed that LEDlamps would be implemented. (Internal 7)

In this case, several barriers appear. The renovationprocess is based on a complex series of contractualrelationships, in which asymmetric information and dif-ferent goals contribute to split incentives in the projectgroup. In this case, it was interesting to see that it wasthe external consultant pleading against LED because itwas an unproven technology, which was expensive witha high risk of failure. The internal area manager on theother side meant it was an energy-efficient measure thatshould be implemented even if the cost became slightlyhigher. There were no calculations, scientific studies orsimilar presented and bounded rationality characterizedthe conflict. Other barriers were inertia and lack of acommon goal to evaluate the suggested measureagainst.

The next example concerns the heating system.

Keeping or changing the heating system

The share of multifamily dwellings heated by districtheating is large in Sweden compared to EU. In apart-ment buildings, district heating is the dominant sourceof heat with around 64% (Meijer et al. 2009). All build-ings in the three renovation projects were attached todistrict heating. District heating is also used for waterheating. Both heating and water-heating is included inthe rent, while electricity has individually metering andcharging. This made heating a much bigger cost thanelectricity for the housing company.

This example is how the energy system wasdiscussed in one of the renovation projects. In this case,the orientation decision process was protracted and theproject was discussed several times by the investmentgroup when meeting to make decisions.

During the project meetings, it was soon clear that theheating system needed replacement. The main reason

was purely technical. Such heating systems were said bythe consultants to have a life span about 30 years, but thesystem in renovation project 1 was over 50 years old andwas described in the meetings as a Bticking time bomb^that could break down any time. Of course, no one couldknow exactly when the systemwould break down, but itwould likely do so within the next few years. If thathappened, then the whole renovation would essentiallyneed to be redone, which would be costly and timeconsuming. The project group agreed that the best rec-ommendation for the investment group was to changethe heating system.

The project presented to the investment group includ-ed replacing the heating system. The investment groupdecided, however, not to replace the system because itwas deemed an unnecessary cost. The extra cost ofreplacing the system was estimated at approximatelyEUR 22,000. The whole renovation project was estimat-ed to cost approximately EUR 1,200,000, so the cost ofthe heating system replacement, though substantial, wasnot a huge part of the total cost.

When this first decision was presented to the projectgroup many members, both internal and external, be-came quite upset. One consultant later explained in theinterview why he had become so upset:

But nowwe are doing a total renovation. And thenI asked what we should do with the heating sys-tem. It is 40 to 50 years old. Will we replace it orshould we keep it? The project manager said thatwe should replace it. But that costs, I said. No,there is nothing to discuss, he said. … Everyone,except those in charge, agreed with this. I mean,they don’t know what they are doing. They don’tunderstand the decisions they make. They lookonly at the money, the finances, not the conse-quences. (External consultant 3)

Internal employees from the housing company werealso critical of the decision made by the investmentgroup:

Internal 4: No, I don’t like that we didn’t replacethe heating system. It was a pity, I think. Theydidn’t understand that they would save … it willbe almost as expensive anyway and it will com-plicate the process to keep the old pipes.

Interviewer: But why could you replace the sys-tem in project 2 but not in this project?

Energy Efficiency (2018) 11:53–65 61

Internal 4: No, I cannot answer that.

Interviewer: Because it would be much moreexpensive?

Internal 4: No, I mean… it is… but… I think thatit will be much more expensive [not to replace thesystem]. No, I think that it was a wrong decision.(Internal 4)

Another internal participant believed that it was nec-essary to replace the system from a technical standpoint:

Because, if you start screwing and banging, thenthe risk is that it will start to leak. No, this is adecision made at another level, where the moneyrules. (Internal 5)

One external consultant felt that the decisionfrom the investment group was so unacceptablethat he decided to call a member of the invest-ment group to try to convince him that the in-vestment group needed to reconsider the deci-sion. The representative of the investment grouprefused to discuss the matter with the consultant,and instead referred him back to the projectmanager. This consultant saw it as a matter ofprofessional pride to attempt to have the decisionchanged:

No, I don’t want to stand there with my headhanging when everything is finished and itstarts to leak and everyone in town istalking. The industry is not that big …Who is the consultant? Yes, it is [consultant’sname] and he didn’t say anything. (Externalconsultant 3)

One member of the investment group explained whythey were reluctant to replace the heating system:

From the beginning we thought that weshould change [the system] and then I wasactually the one who said: Why should wereplace the heating system, no one does that?If you owned the building you would neverchange the system; why should we do thatjust because we are [the name of the housingcompany], why? … No other private compa-ny would replace it. Answer that. (Investmentgroup 2)

Another member of the investment group reflectedon the problems connected to the fact that the invest-ment group does not follow the planning and designphase and does not know how various issues have beendiscussed before being presented to them:

Sometimes I think … we undertake quite thor-ough investigations, we have consultants, wethink internally, we have experts and everythingis going on for quite a long time, and then you endby approaching the investment group that has notparticipated in this journey at all. And they say,BNo, this is not possible, it is crazy .̂ The systemmust stay, and then we try to say that we havediscussed this, but okay, we take it another turnthen. (Internal 3)

Discussion of the heating system continued forseveral months before the investment group finallydiscussed the issue again. By then, informal con-tacts had been made. The calculations and thearguments were still the same the second time,but the results were the opposite. The new deci-sion was now to replace the system. The secondtime the investment group accepted the argumentsput forward that it was too risky not to change thesystem. By just studying the material presented tothe investment group nothing had really changed,but the informal contacts had resulted in a changeof mind by the members of the investment group.To the investment group this did not seem to be amajor reversal or indicate a loss of prestige:

With energy saving and everything, some-times you need to step aside and … I mean,we could keep the old heating system eventhough we know that it is not good to keeppipes that are 40 years old, but if there is nomoney, then we need to take a chance. Butsometimes, of course, you need to back off.(Investment group 4)

However, one person in the investment group,even after the decision was made to replace theheating system, was reluctant to acknowledgewhether that was the best decision. He was quiteconvinced a heating system can last well over50 years without problems, and questioned thatthe replacement was an investment at all.

62 Energy Efficiency (2018) 11:53–65

The heating system, which is a great thing todiscuss. Why should we replace the heating sys-tem? They say yes, it is embedded pipes and thereis a great risk that there will be damage. But… it'sjust a pure cost, it is a cost that is taken from yearone ... that is no investment... Normally, you donot replace it, it will last one hundred years. (In-vestment group 2)

The decision to replace or not to replace the heatingsystem is an example of how economic argumentschange during the process and are dependent on howthey are defined, as costs or investments, and if they arediscussed in a long or short-term perspective. The casealso exemplifies an organisational barrier within thehousing company. It seems as the idea of having aninvestment group that is not deeply involved in projectplanning and yet makes the final decision on renovationimplementation can lead to a barrier in itself. The in-vestment group lack knowledge of both technical pre-conditions and of how the project group reasons about aproblem such as the heating system. The investmentdecision is made in isolation from the work in theproject group, which creates an information gap andproblems with adverse selection where the project groupknows more about the energy performance of a technol-ogy than the investment group does, the investmentgroup select measurements on the sole basis of price.

Conclusions

We have followed two discussions around energy mea-sures discussed by professionals during renovationmeetings, in order to understand which barriers thatcan be identified and how they appear, disappear andtransform during these discussions. Our intention hasnot been to assess the decisions or judge whether thesewere good or bad decisions. The intention was to followthe process to understand the professionals’ perceptionsto shed different light on how barriers appears, disap-pears and are transformed during the process of theplanning and design.

Energy-efficiency renovation is not a linear process,as the design and goals change throughout the process.Barriers must be seen holistically with the awarenessthat a barrier can change in importance and meaningrelative to how a renovation process is developing. Abarrier exists in a specific social context in which actors

constantly interact and negotiate what measures to adoptand to reject. Decisions are not made in a vacuum but ina context in which the actors are influenced by regula-tive rules, normative rules, cognitive routines and beliefsystems. That is also why for example the replacementof a heating system can first be seen as too expensiveand then later in the process be regarded as financiallyacceptable. And this happens without any new calcula-tions being presented. We saw from their comments thatthe members of the project group did not spend timerecalculating the investment cost of a new heating sys-tem, but rather put their energy into communicating withand convincing the investment group to change theirdecision.

In the arguments about if to install LED lamps theframing of the problem changed during the process. Itwent from that LED lamps were a too immature tech-nology to that it should be implemented to meet thetenants’ requests. In general, the lack of further investi-gations in relation to what measures to include andexclude in the renovation, contributed to that the deci-sion process were characterized by bounded rationality.

Energy-efficient renovations are multi-faceted andshould be approached accordingly. In this project, weused a process approach and followed renovation pro-jects over time. This gives a complementary view toearlier studies where existing barriers are studied at oneoccasion, when the questionnaires are answered or theinterview conducted.

Barrier theory helps identify and give an overview ofthe possible obstacles to energy-efficiency renovations.But different barriers appear in different phases andsome disappear or transform to drivers in the process.This is why, it is important to do in-depth studies andfollow a process as complements to surveys. In this case,we could recognise several of earlier identified barriersin the construction sector, such as contractural relation-ship, lack of common goals, assymetric information,split incentives and energy performance less valued thaninvestments costs. In addition to these, we found thatinternal organisational barriers became important expla-nations to understand why or why not energy-efficientmeasures become implemented. The division with aproject group and an investment group creates adverseselection and an information gap. Within the projectgroup, there was also a lack of common goals on elec-tricity and no one within the housing company wasassigned to identify opportunities when it comes toelectricity.

Energy Efficiency (2018) 11:53–65 63

Acknowledgements This work was supported by FORMASand IQS Samhällsbyggnad under grant number 2012-246. Theauthors would also like to acknowledge the valuable commentsfrom the anonymous reviewers.

Compliance with ethical standards

Conflict of interest The authors declare that they have no con-flict of interest.

Open Access This article is distributed under the terms of theCreative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestrict-ed use, distribution, and reproduction in any medium, providedyou give appropriate credit to the original author(s) and the source,provide a link to the Creative Commons license, and indicate ifchanges were made.

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