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Building energy retrofits can reduce emissions and increase cost savings. Some retrofits that can deliver higher emissions savings are not popular due to a lack of economic justifications. Financial incentives can be used to change buyer perception around such retrofits. This study proposes a framework to identify the best-performing retrofit strategies for a given building cluster and the optimal incentive amounts to promote the chosen strategies, accounting for uncertainties, stakeholder priorities, and budget constraints. The proposed framework was demonstrated using a case study complemented with policy insights. Life cycle cost savings and capital cost significantly impact retrofit purchase decisions. Case study results showed that retrofitting houses heated with electricity can produce significant cost savings. However, adopting energy-conscious behaviours in houses heated with natural gas and injecting renewable natural gas into the gas supply can produce two times more emissions savings achieved by any retrofit strategy applied to an electrically heated house. This indicates the need for adopting performance-based incentives over the prescriptive approach to reward occupant efforts in addition to asset performance. Despite potential life cycle cost savings, incentives must be complemented with low-interest loans to promote retrofit strategies carrying higher capital costs. [ABSTRACT FROM AUTHOR]

Energy performance contracts (EPC) can address economic sustainability challenges associated with residential energy retrofitting projects, including funding limitations, poor quality of project delivery, and landlord-tenant dilemma. Literature has overlooked the impact of weighted average cost of capital (WACC) and funding sources in EPC planning. However, the WACC, stakeholder priorities, and uncertainties can alter the project outcomes. This study proposes a Monte-Carlo simulation based non-linear multi-objective optimization approach to address the aforementioned challenges. A case study conducted in British Columbia indicated that the maximum overall project profitability can vary between $18,035 and $20,626 with decision priorities. The overall project profitability can vary over 9% due to uncertainties. The project profits can change over $3000 due to changes in the WACC. These observations confirmed the criticality of accounting for WACC, stakeholder priorities, and uncertainties in EPC planning. The risk of compensating for the performance compromises and profits increases simultaneously for the energy services company with the increasing contract periods, while it is inverse for the owners. Therefore, the contract period must be decided considering the profit expectations and risk tolerance of the stakeholders. Extended contract periods allow lower capital contributions from the building owners, potentially solving the principal-agent disputes in rental buildings. [ABSTRACT FROM AUTHOR]