Energy-saving renovations of existing residential buildings have proven to be very helpful in alleviating the pressure of energy shortages and CO2 emission, but an economic analysis of the measures by using a life cycle cost (LCC) method is very important and necessary to determine whether to implement them or not. Based on thermal simulation and site investigation, the paper uses one urban existing residential building in Hangzhou city of China as the subject building, and analyzes the economic benefits from the energy-saving renovation measures through the LCC method. The findings clearly show that the investigation of the factual electricity consumption of the subject building is very important to predict accurately the energy-saving effects and financial benefits of the measures for the building, because of the great discrepancy between in fact and in thermal simulation of the heating and cool loads, and the too cheap electricity price may hamper the development of energy-saving implementations in residential sector in China. Crown Copyright (C) 2008 Published by Elsevier Ltd. All rights reserved.