This article is part of our special report Renovation of buildings: The fight is over, time to implement.
Addressing energy poverty and developing new financial tools to boost energy savings are two things governments could do in practice to go beyond the targets outlined in the Energy Performance of Buildings Directive (EPBD) and start renovating the European building stock for real.
The EPBD targets are tough but clear enough and it’s now up to member states to enforce these commitments. The risk of the directive being ineffective is high if countries and local authorities do not enforce it correctly.
“The EPBD was only the first step on the road to make our European building stock better,” said the Parliament’s rapporteur on the EPBD, Bendt Bendtsen, during REDay2018, passing symbolically the mantle from EU policymakers to national authorities in charge of implementing it.
Around 200 million buildings need to be renovated before 2050 if Europe wants to keep on track, according to the Renovate Europe platform, a campaign group. The current rate of deep energy renovation stands at 0.15% on average across the 28 EU member states while it should reach 3% per year in order to meet the EPBD targets, it says.
When it comes to the directive’s implementation, the attention is now turning on Long-Term Renovation Strategies (LTRs) that all member states must introduce by 19 March 2020.
The two biggest tests for national LTRs is how they will treat energy poverty and the development of new financial tools to support buildings retrofitting.
The two topics are actually interrelated, as low-cost loans and specific advisory services could help who suffers fuel poverty to afford the costs of home renovations.
“Public money is not enough,” said Bendt Bendtsen, stressing the need for a multi-financial framework being able to allocate more private money on renovating buildings.
France: Speeding up but not on track yet
“In France, things are speeding up, but we are not on track yet,” said Marjolaine Meynier-Millefert, a member of Parliament with La République En Marche (LREM) and appointed co-chief of the country’s building renovation plan in November 2017.
The average performance of the French building stock in terms of energy consumption per square meter is one of the worst in Europe. This puts the issue of building renovation among the top priorities in France’s energy efficiency roadmap.
The expected budget for this plan amounts to €14 billion over five years, of which €4.8 billion are needed to renovate public buildings.
“We already have energy performance certificates that assess building performance and they recently become an element of patrimonial value,” Meynier said, adding that an A-graded building could lead to an additional surcharge of 10% on the initial price of a property.
According to the French MP, only 1-2% of the building stocks have reached the A performance level on an A to G scale. The long-awaited building passport should have a positive impact in improving the energy performance of the building stock.
The French government renovation plan will also pay attention to the training of retrofitting practitioners. “We have a quality label certification scheme for professionals that we are reinforcing to make sure that while we are improving in quantity, we are not reducing our quality standard,” she explained.
Scotland: Expanding to the able-to-pay market
Energy efficiency has been an infrastructure priority for the Scottish government since 2015, when the First Minister launched a 20-year roadmap to make Scottish homes efficient, warmer and more environmentally friendly.
Local authorities play a big role in reaching these objectives, offering an integrated approach and expanding into the able-to-pay market.
Energy poverty is a major concern and at the same time, one of the drivers of building renovation: Around 23-25% of homes in Scotland are faced with this condition. Two national programmes have recently been developed with a view to cutting energy poverty to 4-5% by 2050 – “warmer home Scotland” and the fuel poverty Scotland bill.
Tackling energy poverty also means focusing on area-based programmes and local heat and energy efficiency strategies.
From a point of view of energy performance certification, the Scottish government’s goal is to bring all buildings to C performance level at least by 2040, said Craig Egner, a senior policy advisor of the Scottish government.
EU member states must also ensure that public subsidies lead to energy savings for renovating houses, as well as triggering private investments
A French law already provides a 30% tax credit for the residential sector – without income requirements – in order to assist tenants for chasing efficient material and equipment to limit energy consumption.
“This measure was actually so popular that we now need to rethink it as it largely exceeded the budget we had intended at the beginning,” said French MP Meynier.
In 2015 alone, almost 1.2 million households use the tax credit. “Some modifications are undergoing but it still remains one of our most effective devices,” she said.
France also reduced the value-added tax for the residential sector from the normal 20% rate to 5.5% for building retrofitting works.
There is also an energy saving obligation scheme, the so-called “white certificates” for both residential and non-residential, which counts on a public budget of €5 billion available for pushing direct or indirect energy savings
Following the same logic as the EU carbon market, the scheme obliges energy retailers and suppliers to meet specific energy savings targets. When they exceed their target, they need to buy credits worth the same amount.
“It is a good thing and it puts a significant pressure on the system, but we need to work on making that scheme more effective and the attribution of white certificates more transparent,” Meynier said.
“We’re working very closely with local authorities and we have run a number of pilot projects with them asking to hit energy efficiency strategy,” said Craig Egner outlining some financial tools like domestic and non-domestic energy efficiency loans.
One of this non-domestic tools, the Salix Energy Efficiency Loan Scheme (SEELS) provides funding for schools to reduce energy costs through the installation of energy efficiency technology. It is an interest-free loan funded by the Department for Education which is paid back through the predicted savings on energy usage.
There is also a loan specifically designed to support the development of district heating networks, offering low-interest loans to both renewable and low carbon technologies, with a 10-year payback and competitive interest rates.