Stakeholder workshop #5 for the revision of the Energy Performance of Buildings Directive 2010/31/EU: Accessible & Affordable Financing
Answers by the European Copper Institute (ECI)
1. Strengthening the EPBD
Mobilising financing can be difficult, in particular at local and regional level. EPBD revision could further guide Member States and support removing obstacles. What are the most relevant regulatory obstacles and market barriers towards financing to be addressed within the scope of the EPBD revision? How can these be best addressed through legislative reinforcement notably in relation to the EPBD articles 2a, 10 and 20? Well promoted long-term renovation programmes incorporating subsidies and loans with stable conditions are important for the market on both sides (building owners as well as construction sector). Confidence in long-term availability of support schemes is crucial and owners need to be ensured, that schemes will be available in the future, leaving them with some time to plan (staged) deep renovation according to their needs and supported by technical advice and tools, such as Building Renovation Passport.
What kind of (innovative) financial instrument should be recommended to Member States to accelerate the deep renovation of buildings within the scope of the EPBD revision? (budget guarantee, loan, support and subsidies, fiscal incentives, on-tax, on-bill schemes, property-linked finance, VAT rates, …) Pay-as-you-save (also called pay-per-performance) types of mechanisms is obviously an attractive option in times when central government revenues are under pressure; with fully self-financing mechanisms as the final goal. Energy service company (ESCO) financing and energy performance contracting (EnPC) can be part of the solution, but capacities will need to be built and performance demonstrated for such mechanisms to be established as standard business models in a risk-averse marketplace. Important here is to closely tie incentives to quality service provision and ensure that the renovation supply chain is capable of meeting the service needs (avoid the risk of market poisoning through unqualified service delivery).
Which of the current and planned EPBD instruments (EPCs, Deep Renovation Standards, MEPS, BRP) is better placed to stimulate additional financing on building renovations? Especially in the case of rented buildings (to address split incentives)? As deep renovation rarely happens at once, BRP is a key element to overcome operational, financial, as well as social barriers of renovation, to support building owners with personalised advice, and to ensure coordination of works during staged deep renovations. For each renovation step, users should be provided with an estimation of the investment and the expected benefits (including non-energy benefits and so called ‘multiple’ benefits to avoid a too narrow focus on short payback terms). Financial support (public / private) and/or mortgage should be committed and linked to the actual execution of each consecutive step of the renovation roadmap outlined in BRP’s.
