The retrofit ROI model that doesn't survive the building

Every retrofit decision — insulation, heat pump, solar — comes with an ROI model. Almost all of them are built on regional averages, and regional averages are where retrofit money quietly dies. The number looks bankable and describes a building that isn't yours.

The model is regional. The building is specific.

A heat-pump payback calculated on "average" heating demand assumes an envelope, an occupancy pattern, and a climate your specific asset may not share. Be off by 20 percent on the demand assumption and a nine-year payback becomes fourteen — or the reverse, and you skip a retrofit that would have paid back in six.

Where the models break

• Heating and cooling demand pulled from building-type averages, not the asset's own meter history.
• Occupancy assumed at design spec, not what tenants actually do.
• Energy prices held flat — when they are the single most volatile input in the whole model.
• Grants assumed at the headline rate, not what the building actually qualifies for.

Each assumption is defensible in isolation and catastrophic in combination. A retrofit business case is the product of four assumptions, so a 20 percent error on each doesn't add — it compounds.

Model from the meter, not the brochure

The retrofits that pay back are the ones modeled on the building's own consumption history, its real occupancy, and a price scenario you actually believe. It is slower than the brochure calculator. It is also the difference between a capex decision and a guess wearing a spreadsheet.

A retrofit ROI built on regional averages is precise about a building that doesn't exist. Model the one you own.

The asset managers who retrofit well don't have better contractors. They have better inputs — and they know which of their buildings to leave alone.