Economic Evaluation and Budgeting Methods for Green Material Replacement in Existing Building Renovation

Gui-Xiao Lyu （ Ningxia Huasheng Construction Engineering Co., Ltd. Yinchuan City, Ningxia 750002, China ）

Abstract

Against the backdrop of global "dual carbon" goals, the renovation of existing buildings has become a critical pathway for achieving energy conservation and emissions reduction in the construction sector. As a core element of renovation projects, the application of green materials can significantly enhance building environmental performance, yet it is often accompanied by increased initial costs, leading to challenges in project decision-making. This paper focuses on the economic aspects of green material replacement in existing building renovations, systematically reviewing the definition and classification of green materials and their typical application scenarios in retrofits. It provides an in-depth analysis of the applicability and limitations of traditional economic evaluation methods—such as static payback period, dynamic net present value (NPV), and internal rate of return (IRR)—in the context of green material applications. Building on this, the study develops a comprehensive economic evaluation framework that integrates life cycle cost (LCC) analysis, incremental cost-effectiveness ratio (ICER), sensitivity analysis, and risk-adjusted discount rates. Additionally, for the budgeting process, innovative approaches are proposed, including detailed bill of quantities preparation based on BIM technology, establishment of a green material price database, dynamic price adjustment mechanisms, and contingency fund allocation. The research aims to provide scientific and practical decision-making tools for governments, owners, design units, and construction companies, thereby promoting the scalable and economically viable application of green materials in existing building renovations.

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