Mass Customization for Residential Energy Retrofits

  Customization process (Source: Baltzer et al., 2010)

Construction companies in several countries, such as Japan, the U.S., the U.K. and the Netherlands, also explore ways to deliver high varieties in housing design to meet the diverse environmental requirements, while at the same time reducing the complexity of variety in implementation, so that benefits from economies of scale can still be attained. In this research project, we have developed an approach based on mass-customization of retrofit measures for the existing housing stock that are aimed to conserve energy. Our approach includes the analysis of different customization choices, while at the same time retaining economies of scale, by studying the achievable energy savings and economic trade-offs involved.

Recent discussions about climate change as well as the limited availability of energy resources bring up the subject of rational energy use. One of the major energy consuming sectors in almost every country is the residential sector. The high energy consumption and the perceived large energy reduction potential in the residential sector over the years led to many new regulations and Demand-Side Management (DSM) policies.

We find that general efficiency descriptions do not help to integrate the best retrofit measures for a specific house, and instead propose a four-phase procedure, as depicted in Figure 1. In the course of the analysis, several dependencies have to be analyzed that determine the actual energy enduse and that require a customized information acquisition. This data acquisition represents phase 1 of the mass-customization process. Next, several energy retrofit scenarios have to be considered (phase 2) that are then rated in an analytical procedure (phase 3). The result is an interactive tool which proposes a choice menu to the home-owner in phase 4, from which the user can select a package of retrofit measures that best fits to his or her individual behavior and his individual house.

The approach developed in our research is based on masscustomizing technology for energy-saving retrofit measures in the residential sector. Since buildings are highly individual, we analyzed how to mass-customize retrofit measures in order to meet customer valuation and at the same time optimizing economic impacts during the retrofit process by leveraging on scale economies. The customer value is addressed first in our analysis of the customization elements, given that the customer is the actual decision-maker. Economic utility is represented by the two ratings, the Expenditure Ratio (ER) and the Market Value Ratio (MVR), reflecting both home-user- and home-owner-related utility. The analysis of the customer-specific value also includes the rebound effect, which measures the extent to which energy efficiency technologies may lead to lower energy savings than anticipated based on engineering calculations only, due to behavioral and market adjustments.

The investigation of the energy end-use shows that end-use can be differentiated by space heating, air conditioning, water heating, lighting and miscellaneous appliances. Specifically, we describe in detail what data must be gathered in order to calculate actual energy needs. Among others, these are climatic conditions, building type, and household size. After determining the barriers to technology adoption that prevent energy-efficient technology to penetrate the market, we develop a mass-customization process. This process includes efficient information processing, scenario description, analytical calculations, and the generation of a choice menu that offers energy-saving retrofit solutions with high performance for the individual customer.

The benefit from using a mass-customization approach, as it is demonstrated by our research, is that the home-user participates in the design stage of bundling several energysaving retrofit measures into a package. During the process, we focus not only on technical specifications, but also take into account individual customer needs. The large number of retrofit options as well as the easy identification via rating numbers provides an opportunity to combine several options and thus to create a set of retrofit solutions that suit a particular home, and that at the same time renders the retrofit solutions economically attractive by applying mass-produced subsystems or components.

In order to compile a workable mass-customization process from this approach, the presented targets need further investigation. The modularization of energy retrofit measures can be seen as a fundamental future research project. In this future work, the physical decoupling of energy retrofit measures should be further analyzed and the customer’s ability and willingness to design a package of retrofit measures examined.


Baltzer M., Tseng M., Madlener R. (2010). Mass Customization for Residential Energy Retrofits, Proceedings of the MCP-AP 2010 – An International Conference on Mass Customization and Personalization, December 6-8, 2010, Taipei, Taiwan.

Supervised student research

Baltzer M. (2010). Economics and Energy Savings of Residential Retrofits: A Mass-Customisation Approach. Study thesis, Chair of Energy Economics and Management, Faculty of Business and Economics, RWTH Aachen University, September.