Multiple benefits of renovation in buildings - PU Europe

More documents

Recommendations

Info

Multiple benefits of investing in energy efficient renovation of buildings Figure 20 Share of owner-occupied and rental 3% 26% 71% Owner-occupied Rented Other Note: Data only available for 15 countries Source: Own calculations based on BPIE (2011) One of the countries having recognised the misaligned incentives between landlords and tenants as a problem is the UK. In October 2011, UK adopted the Energy Act 2011, which has as a main priority to increase investments in energy efficiency renovations especially in the private rented market. While not concretely addressing rent control legislation, the Energy Act 2011 offers finance for landlords allowing them to undertake such investments with no up-front investment cost, cf. Box 1. Box 1 The UK Energy Act 2011 – Green deal In 2011, the UK adopted an Energy Act. One of the three main objectives is how to tackle barriers to investment in energy efficiency. This objective is addressed through three concrete measures: 1) A Green deal, 2) Private rented sector reform, and 3) Energy Company Obligation. Underlying the legislation is an acknowledgment that energy efficiency renovations in buildings holds a large unused potential for reducing CO 2 emissions cost effectively. One of the main barriers being addressed in the legislation is the problem of unaligned incentives between landlords and tenants. While it seems that the UK has not as such adjusted rent control legislation, which is relatively strict on social housing, cf. Figure 19, it has adopted innovative measure to breaking down this barrier. The policy stands on several pillars: Green deal The green deal is a new financing framework for energy efficiency renovations in buildings. The financing provided by this legislation is funded by a charge on energy bills. The Green Deal anticipates the retrofit of over a million homes per year, and is expected to deliver aggregate investments in the region of £7 − £11 billion per year 30
Multiple benefits of investing in energy efficient renovation of buildings over 15 years. 32 A wide range of energy efficiency renovations are eligible for funding under the framework, cf. Table 1. Table 1 Measure eligible for financing through Green Deal Heating, ventilation and air conditioning Building fabric Lighting Water heating Microgeneration Source: UK Department of Energy and Climate Change (2011), page 7. Condensing boilers Heating controls Under-floor heating Heat recovery systems Mechanical ventilation Flue gas recovery devices Cavity wall insulation Loft insulation Flat roof insulation Internal wall insulation External wall insulation Draught proofing Floor insulation Heating system insulation (cylinder, pipes) Energy efficiency glazing and doors Lighting fittings Lighting controls Innovative hot water systems Water efficient taps and showers Ground and air source heat pumps Solar thermal Solar PV Biomass boilers Micro-CHP Private rented sector Several provisions related to the private rented sector have been put in place. One provision is that private landlords will be unable to refuse a “reasonable” request from tenants to undertake energy efficiency improvements, if there is a government funding package available (Green deal, or ECO as covered below). In addition, it is from 2018 rendered unlawful to rent out a residential or business premise that does not reach a minimum energy efficiency standard. These requirements are subject to there being no upfront financial cost to landlords. Energy Company Obligation A new energy company obligation is envisaged, which will work alongside the Green Deal finance offer and target those households which are likely to need additional support, in particular those concerning vulnerable people on low incomes and those in hard-to-treat housing. Source: UK Department of Energy and Climate Change, Energy Act 2011 Energy subsidies In general, increasing the cost of energy will improve the incentives to invest in energy efficient renovations of buildings, as the expected energy cost savings will increase. In several EU countries, however, the opposite takes place, as energy consumption is directly encouraged by targeted fuel subsidies to low-income families, lower excise duties on heating oil than other fossil fuels, and by reduced VAT rates on energy consumption. In most countries, VAT is applied in addition to regular taxes on energy consumption. These VAT rates are however reduced by 9-15 percentage points in Greece, Ireland, Italy, Luxem- 32 Climate and Strategy Partners, Financing Mechanisms for Europe’s Building Renovations. 31
Page 1 and 2: Multiple benefits of investing in e
Page 31: Multiple benefits of investing in e

Multiple benefits of renovation in buildings - PU Europe

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?