Anila Qehaja


This project provides a cost benefit analysis of residential insulation investments in Kosovo households, as the cheapest and the most effective way of improving residential energy efficiency. Space heating represents the largest share of the total energy consumption in households, with biomass and electricity being the main sources of energy. Kosovo is currently dealing with issues of deforestation, while the electricity demand is not being fulfilled by the domestic power generation. This situation calls for the introduction of energy efficiency measures, especially residential insulation in households. Residential insulation can play a significant role in cutting down on the consumption of fire wood; thereby, preventing deforestation; and minimizing the volume of electricity imports; thereby, reducing the need for government subsidies in the electricity sector.

One of the goals of this project was to find out the costs related to insulating a home, and applying these costs to an average Kosovar household of generic characteristics. Another objective of this project was to calculate the net present value of insulation investments, its internal rate of return, the payback period, and the cost benefit ratio, as measures of project worth. Several sensitivity analyses considering different house sizes, wall insulation thicknesses, and types of energy efficient windows were conducted. The analysis proved that residential insulation is a wise investment. It has a payback period of 7 years for an average household with average characteristics, and around €4,000 worth of decreased energy spending during 18 years.

The Government of Kosovo should provide subsidies for building efficiency improvements. Local manufacturers of energy efficient products suggest that subventions in the form of machinery would ensure their businesses to continue operating in the marketplace. Commercial banks in Kosovo should consider providing longer “grace periods” in repaying eco-loans. The Government should raise awareness about the many benefits of residential insulation, and should consider exempting energy efficiency products from taxes.

Publication Date


Document Type

Senior Project

Student Type



English, Alicia


AUK Honors Society


RIT/A.U.K - formerly American University in Kosovo