Benchmark Study on Green Buildings - Royal Architectural Institute ...

for improvements on residential buildings built before 1979. The low-interest loans
issued by the KfW Federal Bank will now be made more flexible, and the new funding
will target the replacement of heating systems and boilers, the installation of solar panels
and building renovation to meet high energy efficiency standards.
The KfW also offers another energy saving loan program, called the ‘CO 2 Reduction
Program,’ which applies to investments made in individual energy savings measures in
existing buildings such as boilers, CHP units, insulation, renewable energy or heat pumps.
It also applies to the construction of new, low-energy homes (defined as 60 kWh for
heating and water warming per square meter of living space per year). These loans are
capped at 5 million euros (approximately $7.1 million Canadian).
Both programs have a payback period of up to 20 years with 3 repayment free years.
They can be combined with other loan programs, provided the loan does not exceed the
total investment. The nominal interest rate for the ‘CO 2 Building Modernization
Program’ is variable and currently at 2.10% (or 3.10% for low-energy houses). However,
if the building achieves the newly set standard for low-energy houses upon completion of
the renovation, only 80% of the loan needs to be repaid. Also, to qualify for a loan to
meet the investment, applicants must demonstrate that the modernization will result in a
CO 2 reduction of at least 40 kg/m 2 /year. Loans will be capped at 250 euros($350
Canadian)/m 2 of living space. Smaller loans are available for improvements that achieve
a 30 kg/m 2 CO 2 reduction. The size of these smaller loans has been increased since the
2003 revamp. Interest rates for the ‘CO 2 Reduction Program’ are currently at 3.15%.
Energy Service Companies (ESCOs):
Germany is also the largest and most mature Energy Service Company (ESCO) market in
the European Union. By the end of 2000, more than 70,000 contracts for energy services
had been concluded, which have resulted in total investment exceeding 5 billion Euros
(about $7 billion Canadian), more than 50,000 generation units, a total installed thermal
capacity of 46 GW, and a total installed electric capacity of 8 GW. Presently, about 500
ESCOs are active on the German market and accumulate a total annual turnover of about
3 billion Euros (about $4.25 billion Canadian). ESCO services in Germany are primarily
used in public buildings and by the commercial sector, with about 120,000 sites having
received these services over the last 5 years. Berlin, for example, has truly embraced
ESCO services, with 750 public buildings upgraded since 1995. One of the reasons for
the ESCO industry’s strength in Germany is because the financial and technical support
ESCO projects receive is shared between nongovernmental programs (e.g. credit
programs by eco-banks [e.g. UmweltBank], efficiency checks by energy agencies, and
boiler replacement by utilities), and government programs (e.g. loan /funding schemes,
R&D programs, and incentive programs for renewable energy). Another reason is that the
Deutsche Energie-Agentur (German Energy Agency, DENA) played a crucial role in
publicly promoting ESCO services in the late 1990s and applied great pressure on the
federal government to begin using these services. For these reasons, Germany is –
together with Austria – the ESCO pioneer in Europe.
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