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Payback time 'too long' for energy-efficient homes

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Published 27 April 2009, updated 10 June 2013

Governments must regulate to encourage energy-efficiency investments in the buildings sector to bring on a market transformation, Constant Van Aerschot from Lafarge, co-chair of the energy performance of buildings project at the World Business Council for Sustainable Development (WBCSD), told EurActiv in an interview.

The WBCSD will today publish a report making recommendations on how to tap into the energy-savings potential of buildings. It has developed a computer model to compare the likely impact of different public policy packages targeting the energy performance of buildings in residential, office and retail buildings.

Van Aerschot said the research project had taken as a starting point the decisions of a single person, instead of making top-down prescriptions of what energy-savings could be if all buildings were insulated or every light system efficient.

The key conclusion, van Aerschot said, was that as individuals consider the return they get for investing in energy-efficiency improvements in their homes, they often realise that it can take a few decades before the investment pays back. "Payback is just too long and people's decision-making processes, based on financial criteria, will not lead to the market transition that is required," he said.

The WBCSD thus argues that governments must improve their building codes with energy-performance criteria, which should be further strengthened over time. Van Aerschot pointed out that the problem was often poor enforcement of regulations rather than a lack of them. "Today, in many countries, you don't need to check on-site whether your building performs according to norms. Building inspectors go on-site to check the safety of the building, but they don't look whether the building performs according to what is required," he said.

Furthermore, tax packages and subsidies are needed to compensate for long payback periods and create demand for more efficient buildings, the report states. For example, revenues from carbon trading could be used to reduce the upfront costs of efficiency investments, it says.

No single policy is sufficient on its own to prompt market transformation, but a holistic design approach is needed, according to the WBCSD. "Public money should not be spent on single measures," van Aerschot stressed, explaining that changing windows will not bring any energy-savings should the heat continue to escape through uninsulated walls.

The report estimates that energy users in the six regions it looked at - Europe, the US, China, India, Japan and Brazil - would have to pay approximately $250 billion a year additionally to transform the buildings sector. It added nevertheless that building energy efficiency is one of the most cost-effective ways of reducing energy consumption and consequently emissions.

"People invest a lot already, but they don't do it wisely. A lot of money is being spent, but a lot of it is not directed towards energy efficiency," van Aerschot stressed.

Ignorance about energy consumption and the ways to reduce it are consequently a major hurdle to efficient building, the WBCSD argues (EurActiv 24/11/08). 

"Mr and Mrs Jones, who will retrofit their inefficient building, don't necessarily have the knowledge and the capacity to understand what is really required," van Aerschot said. He added that a survey carried out as part of the report had exposed a big knowledge gap among professionals as well.

The report thus calls for mobilisation campaigns to create a new mindset, not only for policymakers but all the actors involved in the construction process, including building owners.

To read the interview in full, please click here

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