Multiple benefits of renovation in buildings - PU Europe

Multiple benefits of investing in energy
efficient renovation of buildings
Box 4 Specific promotion activities for investments in energy
efficiency renovations
Several countries have introduced activities to promote investments in energy efficiency
renovations in buildings.
The sustainable Energy Authority in Ireland (SEAI) has for the past number of years
been supporting households and businesses to shift to more sustainable energy use.
SEAI contributes with several issues including advice, mentoring, training and financial
support to a broad range of energy users. More than 4,000 registered service providers
are associated with SEAI programmes. SEAI runs a programme for the residential
sector (Home Energy Saving - HES) and for small and medium enterprises (SME). The
HES scheme provides financial support to households for energy efficiency upgrades.
Since 2009, over 100,000 homes have been upgraded with a combination of improved
insulation, high efficiency boilers and heating controls through these schemes. The
scheme has been evaluated to deliver a net benefit of €5 to society for every €1 spent
on the programme. The SME programme is evaluated to be even more profitable, delivering
a net benefit to society of €15-€33 for every €1 spent on the programme.
In Germany, the state bank KfW Bankengruppe is essential in channelling public and
private funding into energy efficiency investments. Germany currently refurbishes
around 200,000 buildings a year and has to date retrofitted 9 million units to high energy
efficiency standard. Existing German homes use around three times more energy
for heating than new buildings. Energy efficiency investments in deep retrofits are estimated
to have halved the energy use in the buildings treated by the KfW since 2002.
Germany has been particularly succesfull in leveraging its public investments by bringing
in additional private investments from e.g. institutional investors. From 2001-2006
the German Alliance for Work and Environment spent $5.2 billion public subsidies and
stimulate total investments of $20.9 billion in building retrofits. From 2006-2009, KfW
financing activities across various programmes deployed €27 billion in loans and
grants leading to total investments of €54 billion.
In Estonia, a Credit and Guarantee Fund – KredEx – was established in 2001 with the
purpose of improving the financing opportunities to a variety of measures, including
housing renovations and energy-saving measures in general. Apart from a general objective
to improve the competitive strength of Estonian companies, a major pillar was
to improve the housing conditions of Estonian inhabitants, including developing an
“energy-saving way of thinking”. Some of the projects undertaken with KredEx are also
part of the broader Baltic Energy Efficiency Network.
Source: SEAI (2011), Climate & Strategy Partners, Financing Mechanisms for Europe’s Buildings Renovation,
and Kallaste (2009), KredEx, Energy Efficiency Competence Centre, Estonia.
In the current context of available capacity in the economy and stress on public budgets
due to the economic crisis, such energy savings projects are a particularly attractive option
to increase economic activity, as a number of structural barriers are holding back
otherwise profitable investments. By addressing the most significant structural barriers,
these investments may help to boost the economy, while not reducing governments’ net
revenue. Conversely such initiatives may even create net revenue. This is a direct consequence
of the nature of the four key structural barriers that hold back energy savings in
buildings and the policies required to deal with them. We identify at least four:
Barrier 1: Rent regulation in both publicly and privately owned residential houses, and
to a certain extent commercial buildings, often prevents landlords from passing on the
40