New study on the use of financial instruments to retrofit buildings in Europe

The Buildings Performance Institute Europe has come out with a new report reviewing the use of financial instruments in the European Union.  The paper presents an overview of the various financial schemes in place dedicated to the energy efficient renovation of buildings in 2011. It makes a quantitative analysis of the different financing mechanisms and provides comparisons on specific aspects such as the level of financial support and the level of ambition with respect to the targeted energy consumption. It also gives information on the type of buildings concerned and the renovation measures supported by the financial schemes.

The report draws the following conclusions:

• The level of ambition of financial programmes should rise in order to unlock further private investments for deeper renovations.
• While there are many financial programmes in place, the understanding of their overall effectiveness is unclear. Relevant information on programme evaluation is hard to collect and even harder to compare because there is no standardised way to monitor and evaluate the individual programmes; and Member States using different key performance indicators.
• A holistic approach to building renovation has a better chance of achieving deeper improvements. Funding a major retrofit strategy will require the possible bundling of several financial instruments available because of the high up-front cost of a deep retrofit.
• There is a need to scale up renovation rates based on a long-term strategy if there is to be a true transformation and decarbonisation of the entire buildings sector over upcoming decades.
• New strategies to secure sufficient financing for the deep renovation of the European building stock are needed, bundling private and public investment. More innovative ideas and initiatives will be necessary as deep renovations are costly, even if they are cost effective. The considerable up front capital is normally beyond the support from any single financial instrument.

The full report can be downloaded from the BPIE website.