BPIE: Europe's buildings under the microscope - PU Europe

years, while many businesses will not consider non-core investments that do not pay for themselves within
3-5 years. Alternative financing mechanisms which try to ensure that the benefit from energy efficiency
improvements are paid by those that benefit from them (e.g. recovering initial capital over 25 years through
the energy bill) may have a role to play here. As noted by the answers received from Poland in the BPIE
survey, there is insufficient common awareness about profitability of renovation in terms of life cycle costs.
Competing purchase decisions
Business will prioritise what are perceived as core investments in staff and equipment over energy costs,
which (with the exception of energy intensive businesses) typically make up only a small fraction of business
costs. For householders, investments in energy saving measures will struggle to compete with the latest
electronic gadgets or a new kitchen or bathroom, which are not particularly cost-effective investments but
yield a much higher perceived ‘social benefit’. Some see this obstacle as an issue related to awareness;
others deal with it separately as a financial issue. Moreover, many energy efficiency measures are not visible
(unlike, say, photovoltaic systems) which makes them less ‘attractive’ as an investment option. The lack of
attractiveness is sometimes reinforced by more generous subsidies which are more readily available for PVs
compared to energy efficiency measures. Undoubtedly, consumers have a lot of choice and the case for
reducing costs or improving other benefits (such as comfort) has to be seen in that context.
Price signals
Many of the financial barriers identified concern consumer price signals. If the financial incentive
associated with investing in energy savings measures was sufficiently large, households, businesses and
the public sector would have a higher propensity to undertake such investments. Put simply, energy
costs often represent a small share of household expenditure resulting in lack of motivation for the vast
majority of consumers to take meaningful action to reduce consumption levels. 23 Furthermore, energypricing
structures do not reflect the full environmental costs of producing energy, in particular the costs
associated with climate change, and hence there is a sub-optimal level of investment which was raised by
the responses for Switzerland and the UK. One of the concerns reported for Hungary was the high degree
of uncertainty about future prices, which seriously hampered consumer decisions.
II. Institutional and administrative barriers
There is a wide range of barriers related to institutional and administrative issues that can have an effect
on the rate and ambition of renovation. This category was considered the third most important barrier
category in the survey, although second in terms of the highest priority.
Regulatory & planning regimes
A variety of regulatory and planning obstacles have been identified. These range from various degrees
and speeds at which EU Directives, including the EPBD, have been implemented by autonomous regions
within a Member State, through to energy market barriers, such as the approvals process for building
integrated renewable technologies. Evidence from Italy indicates that fragmentation, delay and gaps in
the regulatory action of public planning have not allowed the public sector to be the driver for improved
energy efficiency in buildings that it should be. 24
Institutional
There is a bias among institutional investors more familiar with (and hence more comfortable with)
supply- side investments and large-scale financing, rather than generally smaller (and “more risky”)
projects on the demand side. This was singled out by Hungary.
23
This is definitely not the case for those in fuel poverty, where energy costs represent at least 10% of their household expenditures.
24
BPIE database
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