Renovating Building Groups in the Mediterranean Climate: Cost-Effectiveness of Renewable-Based Heating Alternatives in the Italian Context

District level approaches for the renovation of the building stock boost the implementation of energy efficiency measures (EEMs), taking advantage of the economies of scale. International Energy Agency Annex 75 aims to assess the cost‐effectiveness of renovation strategies at the district level, combining EEMs and renewable energy sources. For this goal, a building energy model is simulated with the Energy Plus dynamic calculation engine for assessing the generic district of the Italian case study, representing the residential stock from 1960 to 1980, placed in two prevailing space‐heating dominated climates; then, a cost‐effectiveness evaluation of each scenario is conducted to support stakeholders’ decision making. In particular, envelope insulation is cost‐effective only in northern zones, while new decentralized thermal systems are not convenient in any case with current envelopes. Once the envelopes are insulated, decentralized low‐temperature air‐towater heat pumps with PV can cover all of the buildings’ energy needs, even implying a small increase in annual costs. The switch to district net scenarios is cost‐effective only if coupled with PV. A rise in energy prices brings PV‐based strategies under a 10‐year PBT, except for solar thermal DH in northern areas, as well as non‐PV‐based options such as low‐temperature HPs or biomass‐fuelled DH in warmer and colder zones, respectively.