The economic viability of a progressive smart building system with power storage

Eerika Janhunen*, Niina Leskinen, Seppo Junnila

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

1 Citation (Scopus)
35 Downloads (Pure)


The increased smartness of the built environment is expected to contribute positively to climate change mitigation through energy conservation, efficient renewable energy utilization, and greenhouse gas emission reduction. Accordingly, significant investments are required in smart technologies, which enable the distributed supply of renewables and increased demand-side energy flexibility. The present study set out to understand the cash flows and economic viability of a real-life smart system investment in a building. The data collection process was threefold: First, a case building's level of (energy) smartness was estimated. Second, the semi-structured interviews were held to understand the building owner's motives for a smart investment. Third, the investment's profitability was analyzed. The study found that the progressive smartness investment was technically feasible, and surprisingly also economically profitable. The original EUR 6 million investment provided over 10% return-on-investment and, thus, increased the property value by more than EUR 10 million. Moreover, the commercial partners also emphasized the strategic value gained by renewable energy and environmental performance. The high level of smartness with a good return on investment was accomplished mainly through new income generated from the reserve power markets. However, the results implied that financial profitability alone was not enough to justify the economic viability of a smart building system investment.

Original languageEnglish
Article number5998
Number of pages18
JournalSustainability (Switzerland)
Issue number15
Publication statusPublished - Aug 2020
MoE publication typeA1 Journal article-refereed


  • Discounted cash flow analysis
  • Energy storage
  • Investment profitability
  • Investor motives
  • Renewable energy resources
  • Reserve power system
  • Smart building
  • Smart energy system
  • Smart readiness indicator

Fingerprint Dive into the research topics of 'The economic viability of a progressive smart building system with power storage'. Together they form a unique fingerprint.

Cite this