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Financing Low carbon refurbishment Phase 1
Analysis and recommendation report
I. Summary of the assessments The analysis and recommendation report is relaying on information gathered from the good
practices examples identifying in the mapping exercise, the policy and financing support
schemes assessment, and the energy audits performed in the five target countries, Bulgaria,
Hungary, Poland, Romania and the Netherlands. The mapping of energy efficiency
refurbishment projects is providing information of the current refurbishment practices,
technologies used for the refurbishment, the policy and financing supporting schemes provide
the framework in which energy efficiency projects in the five target countries are
implemented. The energy audits demonstrate how a 60% CO2 emission reduction and energy
saving can be achieved through energy efficiency and renewable technologies for different
type of buildings in the targeted countries.
In addition to analyzing the actual assessment results publicly available research results on
energy efficiency in the building sector have been also studied.
Governmental subsidies, main legislations and the finance mechanisms are listed and
analysed based on various criteria such as start of the programme, overall targets, scale of the
financing and support available, intensity of subsidy, required own funding from end-users
(households), eligibility criteria, financial terms and conditions etc. The aim of this chapter is
to summarize key terms and conditions as well as results of the selected programmes in the
five countries.
1. Bulgaria
The following table summarizes the available policies and measures, governmental subsidies
and loan products to support energy efficiency and renewable energy projects in the housing
sector in Bulgaria.
Governmental subsidies
Name of the program Exception from property taxes
Program started 2005
Overall target of the program
Tax exception for buildings that are certified to be of
category B or A (for buildings built before 2005)
2
Energy saving target
Category B or A
Intensity of subsidy
100% exemption from property tax for 3 to 10 years
Own fund requirement from
owners
n.a.
Number of homes effected
n.a.
Name of the program
National Programme for Renovation of multi-family buildings 2006-2020
Program started
2006
Overall target of the program
The program intends to support the refurbishment of
almost 700.000 dwellings by the end of 2020, of which
around 364.000 are panel buildings, 153.000 fero-concrete
and 170.000 massive
Energy saving target
n.a.
Intensity of subsidy
20%
Own fund requirement from
owners
80%
Number of homes effected
n.a.
Name of the program National long term EE program 2005-2015
Program started 2005
Overall target of the program
Support various energy efficiency measures in all sectors,
including buildings
Energy saving target
40%
Intensity of subsidy
n.a.
Own fund requirement from
owners
n.a.
Number of homes effected
n.a.
Name of the program EU Operational Programme
Program started
2007
Overall target of the program
Implement energy efficiency projects in the building
sector
Energy saving target
n.a.
3
Intensity of subsidy
n.a.
Own fund requirement from
owners
n.a.
Number of homes effected
600-1200 multi-apartment buildings
Name of the programme Subsidising energy efficiency audits of communally owned buildings. National energy assistance programme, improving energy
efficiency in the use of solid fuel by households
It is planed that after 2012 this programme will be
launched; the budget frame is expected to be 288 million
by 2020, with funds coming from the next OP and the
national allocations in relationship with the 2013-2020
OP.
The targets are the purchasing of EE solid-fuel boilers and
the upgrading of old boilers.
Program started
Will start in 2012
Overall target of the program
It is planed the support of energy audits of buildings that
have a communal ownership from 2012 with a budget
expected to be 27 million BGN. These funds are planned
to be gathered partially from restructuring existing support
mechanisms already mentioned.
Energy saving target
n.a.
Intensity of subsidy
n.a.
Own fund requirement from
owners
n.a.
Number of homes effected
n.a.
Name of the program Green Investment Scheme It is planed that if revenues are generated under the GIS
those will be invested in EE and RES in relationship with
the end users as well. The exact framework still needs to
be developed.
Program started
Has not started yet
Overall target of the program
It is planed that if revenues are generated under the GIS
those will be invested in EE and RES in relationship with
the end users as well.
Energy saving target
n.a.
Intensity of subsidy
n.a.
Own fund requirement from
owners
n.a.
4
Number of homes effected n.a.
Name of the Programme EU Emission Trading Scheme
Program started n.a.
Overall target of the program
It is planed that after 2013 Bulgaria could use revenues
generated from the EU ETS that still needs to be set up, to
finance EE and RES in relationship with the end users as
well.
Energy saving target
n.a.
Intensity of subsidy
n.a.
Own fund requirement from
owners
n.a.
Number of homes effected
n.a.
Name of the Programme Promoting the use of individual Renewable Energy System
Program started n.a.
Overall target of the program
It is planed that after 2011 a support mechanism will be
introduced to support the installation of electricity
producing technology from RES and of heating and
cooling from RES (examples: PVs on rooftops and heat
pumps, etc.)
Energy saving target
n.a.
Intensity of subsidy
n.a.
Own fund requirement from
owners
n.a.
Number of homes effected
n.a.
Name of the program Soft loans for reducing electricity consumption in the households It is planed that this programme should be launched in
2012. The needed budget is estimated to be 540 million
BGN by 2020. A 30% grant it is expected to be attached
to the loan.
The loan would be used to purchase EE heating/cooling
and lighting systems, and other EE domestic appliances.
Program started n.a.
Overall target of the program
n.a.
Energy saving target
n.a.
5
Intensity of subsidy
n.a.
Own fund requirement from
owners
n.a.
Number of homes effected
n.a.
Loan products
Name of the loan product Residential Energy Efficiency Credit Line (REECL) (EBRD)
Overall target
The scheme works by providing householders or
Associations of Home Owners with loans and incentive
grants through local participating banks
Eligibility criteria
Measures undertaken include: energy efficient windows,
wall insulations,
roof insulations, floor insulations,
efficient biomass stoves and boilers and systems, solar
water heaters and systems, efficient gas boilers and
systems, heat pump systems, roof-top building integrated,
gasification and central heating of family houses, balance
mechanical ventilation with heat recovery.
Interest rate
n.a.
Maximum loan term
n.a.
Size of the loan
20%, 30% or 35% of costs. 9.000 euro maximum
cap/dwelling
Name of the loan product
Kozloduy International Decomissioning Suport Fund with EBRD
History:
-was established at the EBRD in 2001 with the original
intent to help the Bulgarian Government to decommission
one of its unsafe nuclear power plant
-its second goal is to promote new end-consumer
efficiency measures in the residential sector
-grant provider
Relevant highlighted projects:
a. Rehabilitation of the district heating network in
Sofia:
-total budget of the project 114 million euro
-from this KIDSF has provided a 30 million grant for the
supply and replacement of network pipes and district
heating substations, with the prospect of additional
equipment as the project progresses
- the whole package of rehabilitation measures
incorporated in this District Heating Project has had an
important effect upon the efficiency of heating and hot
6
water supply in Sofia
- among the results achieved are, increased reliability of
heat services and cost savings for customers, reduction of
energy losses and a decrease in the adverse impact of
energy production on the environment
b. New electricity meters in private households:
-installing new electricity meters in the residential sector
to replace the outdated and less efficient ones
-3 million euro in grant
Name of the loan product Bulgarian Energy Efficiency Fund (BgEEF)
History:
- a legal entity, established in accord with Chapter 4,
Section I of the Energy Efficiency Act (EEA) from 2004.
- was set up by funds from the Global Environment
Facility through the World Bank group in the amount of
10 million USD with an addition from the Government of
Austria of 1.5 million euro and the Government of
Bulgaria of another 1.5 million euro
-since then several private Bulgarian companies have also
added to the fund. BEEF has the combined capacity of a
lending institution, a credit guarantee facility and a
consulting company.
-financed projects at the moment amount to 112. From
these 59 are given to municipalities, 9 to universities, 7 to
hospitals and 37 to corporate clients. Total project value is
BGN 48.9 million (24.45 million euro)
Features:
-it provides technical assistance to Bulgarian enterprises,
municipalities and private individuals in developing
energy efficiency investment projects and then assists
their financing, co-financing or plays the role of guarantor
in front of other financing institutions. BEEF has the
combined capacity of a lending institution, a credit
guarantee facility and a consulting company.
Residential Portfolio Guarantees:
-BgEEF works directly with households to develop the
technical aspects of the project; these projects usually
form a portfolio
-a project implementer is selected to carry out the
refurbishment
-the building in question or portfolio of buildings is then
financed by a commercial bank, with the finance being
transferred directly to the implementer
-BgEEF guarantees to the bank that it will cover the first
5% of defaults
-on a loan repayment period of 5 year the fund charges
7
guarantee fees (that are paid indirectly by the apartment
owner, through the bank, above the interest that one has to
pay after the loan) that varies between 0.5 - 2%
So far only two residential projects benefited from this
scheme mainly due to the aforementioned condominium
law.
2. Hungary
The following table summarizes the available policies and measures, governmental subsidies,
loan products to support energy efficiency and renewable energy projects in the housing
sector in Hungary.
Governmental subsidies
Name of the program The “Panel Programme”
Program started 90s and it was further developed many times. The latest
programme was introduced under GIS in 2009.
Overall target of the program
Renovation of panel buildings. Only housing associations
or owner associations (majority privately owned) are
eligible
Energy saving target
The rational behind the programme was that up to a 29%
reduction in CO2 emission and a parallel reduction of the
total energy consumption (26%) can be achieved by
employing EE technology at a negative cost per investment.
The reduction targeted and achieved varies greatly from
project to project from 10% to 60%
Intensity of subsidy
33-60%
Own fund requirement from
owners
40-66%
Number of homes effected
25% of panel buildings received some level of
refurbishments
Name of the program
NEP Programme – national energy saving programme
Program started
Overall target of the program
Support individual private homes to implement energy
efficiency refurbishment
Energy saving target
The EE and RES technologies supported were similar to the
ones employed within the “Panel Programme”
Intensity of subsidy
15-30%
Own fund requirement from
owners
60-85%
8
Number of homes effected
2500 homes yearly
Name of the program
ÖKO Programme – upgrading the district heating system
Program started
Overall target of the program
This programme was related only to the improvement of
the heating system by adding controlling/monitoring panels
to the heating body, insulation of the pipes(specific)
Energy saving target
n.a.
Intensity of subsidy
50% was awarded by the state and 25% by the local
authority (with the involvement of the district heating
companies),
Own fund requirement from
owners
25% had to be covered by the owner
Number of homes effected
n.a.
Name of the program
GIS Climate Friendly Home Programme
-projects that apply “excellent building product” labeled
products are favored over others
The 2011 additions:
-the projects have to result in at least 3 category
improvement to its previous state and at least a B level
-for the buildings that are at a C level before the
refurbishment it is required that at least an A level must be
achieved post refurbishment
-25% of the energy consumed must come from renewable
sources Program started
2010
Overall target of the program
Targets non-panel houses (traditional brick build for
example). The programme is very similar in its frame as the
third type of “Panel Programme” was, financed from the
income generated by the Green Investment Scheme under
the Kyoto Protocol.
Energy saving target
-At a 50% reduction in energy consumption 40% of the
investment need, but maximum 3 million HUF (11.000
euro)/dwelling.
-At a 60% reduction in energy consumption 50% of the
investment need, maximum 4 million HUF (14.500
euro)/dwelling.
Intensity of subsidy
-At a 35kwh/m2/year overall energetic consumption a
25.000 HUF/m2 is awarded with a maximum of 3 million
HUF(11.000 euro)/dwelling.
9
-At a 25kwh/m2/year overall energetic consumption a
40.000 HUF/m2 is awarded with a maximum of 5 million
HUF (18.000 euro)/dwelling.
Own fund requirement from
owners
n.a.
Number of homes effected
n.a.
Name of the program
Electricity-Efficient Household Programme
Mitigation of household appliance demand (lighting,
household appliances, stand-by consumption) http://palyazatok.org/zold-beruhazasi-rendszer-
energiatakarekos-haztartasi-gepcsere-alprogram/
Program started
2008
The last year when subsidy finance was available for
appliances was in 2010, under the GIS umbrella.
Overall target of the program
The government hopes to enhance the spreading of efficient
lighting technology, through direct intervention and other
horizontal means with a budget expected to be 7.1 billion
HUF between 2008-2016.
Energy saving target
The programme supported the exchange of
refrigerators/washing machines.
Intensity of subsidy
An upgrading to an (A) labelled appliance was supported
with 60.000 HUF and of an appliance labelled (A+) (A++)
with a maximum of 70.000 HUF.
The total amount dedicated in the tender till it’s ended was
1 billion HUF.
Own fund requirement from
owners
n.a.
Number of homes effected n.a.
Name of the program
The light bulb upgrading sub programme under the GIS
started in 2009 with a budget of 230 million HUF and
ended in 2010 with a budget of 450 million HUF.
http://www.kvvm.gov.hu/index.php?pid=9&sid=9&tid=376
http://www.kvvm.hu/index.php?pid=9&sid=9&tid=418
Program started 2009-2010
Overall target of the program
The lighting bulb upgrading. The targeted groups were the
elderly and those with large families.
Energy saving target
n.a.
Intensity of subsidy
The programme covered 100% of the expenses up to 10
million per tender. The leverage of the scheme was 0.
Own fund requirement from
owners
0%
10
Number of homes effected
n.a.
Loan products
Name of the loan product Guaranteed loans supported by the International Finance Corporation
Programme started
1995
Overall target
Provide support for block of flats (home owners
associations and housing associations) to have access to
loans. Security provided by the guarantee fund reduces
security requirement from home owners.
Eligibility criteria
Home owners associations and housing associations were
supported. There was one sub-programme supporting
individual home owners to install efficient gas boilers.
Interest rate
Market based
Maximum loan term
Maximum guarantee term: 7 years.
Size of the loan
Over 50,000 homes
3. Poland
The following table summarizes the available policies and measures, governmental subsidies,
and loan products to support energy efficiency and renewable energy projects in the housing
sector in Poland.
Governmental subsidies
Name of the program Thermo modernization fund
Program started 1999 (redesigned in 2003)
Overall target of the program
Covers thermo modernization of buildings. The most
common measures: thermal insulation of the building
envelope, walls and roof, window replacement and
heating system replacement or modernization.
Energy saving target
Eligibility based on energy consumption reduction:
-in buildings where only the heating system is refurbished
by a minimum of 10%
-where the heating system is modern by a minimum of
15%
-in other buildings by a minimum of 25%
Intensity of subsidy
64% commercial loan that needs to be repaid in less than
10 years(interest rates 7-10%), and 16% grant that goes
directly to the bank
Own fund requirement from 20%
11
owners
Number of homes effected
Between 1999 and 2006 the average project numbers per
year was between 500 and 1.500, from then on till today
the average project number per year is around 3.000, in
total of about 20.000 projects after 11 years of operation
confirming the criticism of NGOs, performing half as it
was expected.
Name of the program
National Fund for Environmental Protection and Water Management
Program started
Started in2010. Due to negative reaction from the market
and stakeholders in 2011 the scheme is being currently
revised and improved based on feedbacks
Overall target of the program
Support of installing solar panels on buildings
Energy saving target
n.a.
Intensity of subsidy
40% Average solar installation costs of submitted
applications amount to EUR 3.500.
Own fund requirement from
owners
60%
Number of homes effected
Since its start in September 2010, subsidies have been
granted to 8,166 households and the Fund has already
spent 6.25 million euro of its 75 million budget
Loan products
Name of the loan product Attached to the Thermo modernization fund
Overall target
The National Economy Bank offers 60% loan to
households who wants to participate in the TMF program
Eligibility criteria
Same as the TMF
Interest rate
7-10%
Maximum loan term
10 years
Size of the loan
n.a.
4. Romania
The following table summarizes the available policies and measures, governmental subsidies,
and loan products to support energy efficiency and renewable energy projects in the housing
sector in Romania.
Governmental subsidies
12
Name of the program National multi-annual programme for the thermal rehabilitation of the blocks of flats
Program started 2005
Overall target of the program
The target buildings are blocks of flats built between
1950-1990, the number of which is over 1.2 millions of
flats the majority being buildings of around 5 stores high.
Energy saving target
According to the National Energy Efficiency Plan the
estimated improvement to the buildings based on the
intensity of the thermal rehabilitation programme is
maximum 25% reduction in energy consumption.
Intensity of subsidy
80% provided by the state and local governments from
which 50% of the funding is provided by the ministry,
30% by the local authority.
Own fund requirement from
owners
20%
Number of homes effected
Since the programme started 6 years ago the number of
apartments affected is around or less than 5 % (60,000
flats) of the targeted number.
Name of the program
Green house program
Program started
2010
Overall target of the program
The targeted buildings are privately owned houses.
Supported measures: replacing the traditional fossil fuel
based heating systems, solar thermal heat pumps and
biomass .
Energy saving target
n.a.
Intensity of subsidy
50% (1400-1800 Euro per households)
Own fund requirement from
owners
50%
By the end of the 2010, 102 million LEI was paid out to
the 17.000 applicants. Loan products
Name of the loan product Thermal rehabilitation loan for individuals(physical person) and Rehabilitation credit for apartment owners associations(legal person)
Overall target
Thermal rehabilitation of buildings and overall renovation
Eligibility criteria
The eligibility for the loan for individuals:
-owners of the family houses who are natural persons
13
The eligibility for owners associations:
- the building in question must be built before the
year 2000
- the building must be of the map of highly risky
territories from a seismic point of view (graded
red)
- the general meeting of the owners must vote yes
on the loan application with a minimum of 90% of
the owners approving
- the owners association must not have a utility bill
delay greater than 2 months
Interest rate
7.39% Fully subsidized by the state
Maximum loan term
5 years
Size of the loan
90% of capital cost
Maximum 7400 Euro for a family house and 1850 Euro
per living room for block of flats
Other finance products
Subsidized housing saving account
Saving period 2-5 years
Interest earning 2-3%
State subsidy Maximum 250 euro per month
Overall target of the scheme Support the national multi-annual programme for the
thermal rehabilitation of block of flats and the green house
programme
Saving to loan value 27.855 – 60%
5. The Netherlands
The following table summarizes the available policies and measures, governmental subsidies,
and loan products to support energy efficiency and renewable energy projects in the housing
sector in the Netherlands.
Governmental subsidies
Name of the program The Green Funds Scheme
Program started In the 90s
Overall target of the program
Support market based projects that have a direct positive
impact on the environment under the sustainability
umbrella
The “green funds” are created at commercial banks
designated as “green intermediary”, a label only those
financiers can obtain who commit to allocate 70% of
14
assets to green projects(decision taken by the Ministry of
Finance)
Energy saving target
n.a.
Intensity of subsidy
Offers 2% below market rate interest rate
2/3 of the capital cost must be covered by the loan
Own fund requirement from
owners
1/3
Number of homes effected
Since its creation the size of the investments has reached
almost 7 billion euro, financing more than 5.000 projects,
which include investment in sustainable housing
Name of the program
Temporary subsidy scheme Buildings and CO2 reduction (2006)
Program started
2006
Glass insulation scheme: 2009-2010
Overall target of the program
Measures financed included: combined heat and power
installations, heat pump boilers, solar thermal panels,
glass insulation.
Energy saving target
n.a.
Intensity of subsidy
15% maximum 1 million euro per project ( one project is
minimum 20 dwellings)
Own fund requirement from
owners
85%
Number of homes effected
100 000 households have applied for gas insulation
between 2009-2010. The entire budget of 45 million EUR
has been allocated.
Name of the program
Voluntary agreements social housing corporations (1998-2005)
Program started
1998, second phase 2001-2005
Overall target of the program
Social housing corporations to improve their housing
stock. In 2001 the plan was to provide 30% of the housing
stock with an energy performance advice, also to include
solar energy systems in 50% of the newly build stock.
Energy saving target
15% (not reached, only 5%)
Intensity of subsidy
n.a.
Own fund requirement from
owners
n.a.
Number of homes effected
n.a.
Name of the program TELI – EE in low-income households
15
Program started
2002
Overall target of the program
Support households with very low income(less than 1.200
euro/month) to implement energy efficiency measures to
reduce fuel poverty
Energy saving target
n.a.
Intensity of subsidy
n.a. maximum 250.000 euro per project
Own fund requirement from
owners
n.a.
Number of homes effected
n.a.
Name of the program
More with Less
Program started
2008, updated in 2009
Overall target of the program
Work with social housing providers, utility companies and
the construction industry to achieve energy saving in
buildings.
Energy saving target
Insulating 500.000 dwellings to at least level B or two
levels above its previous status in the EPC.
Intensity of subsidy
-Housing corporations receiving an 11% tax discount,
house owners receive 1% reduction on the loan interest
(from 10% to 9% ),
-energy analysis done on a home and advice was
subsidized to up to 200 euro/dwelling,
-the glazing of windows was subsidized with 20% of the
capital cost,
-tax benefits were offered on insulation measure(from
19% VAT to 6%)
-Installing solar PVs, heat pumps and other RES is
supported by a reduction on the loan interest by 2-3%
Own fund requirement from
owners
80-100%
Number of homes effected
n.a.
Name of the Programme National Grant Scheme More with Less Program started
2010
Overall target of the program
Increase attractiveness of energy efficiency investment in
housing
Energy saving target
Intensity of subsidy
Home owners who improve energy efficient measures and
move to more efficient energy label level receive 300-750
EUR grant.
16
Own fund requirement from
owners
n.a.
Number of homes effected
7000 homes by the end of November 2010
Loan products
Name of the loan product Green mortgage
Overall target
Green investment
Eligibility criteria
The dwelling has to meet the rules of sustainability either
as a new or refurbished one.
Interest rate
1% lower than market price (over 10 years)
Maximum loan term
n.a.
Size of the loan
Maxium 34.000 Euro
Name of the loan product Energy Savings Credit Guarantee / Green Projects Scheme
/
National Mortgage Guarantee
It offers tax rebate and mortgage guarantee
Overall target
Encourage investments in energy saving
Eligibility criteria
In the Green Projects Scheme the government subsidizes
savings and green investments in a form of a tax rebate
which aims to encourage home owners to save and invest
into energy efficiency.
The guarantee scheme is offered to those who take
mortgage to improve the efficiency of their homes to
protect them against potential default on mortgage loans.
This guarantee was planned to run until 30 June 2011.
Interest rate
The saving scheme has been changed and the benefits
were reduced from 2.5% to 0% in 2014 both for savers
and investors. The capital returns tax exemption (benefit
1.2%) will continue in full.
The guarantee is available for mortgages up to 350.000
EUR. Energy-saving measures can be co-financed, and
investments in energy saving up to a maximum of 6.500
EUR.
Maximum loan term
n.a.
Size of the loan
n.a.
17
II. Comparison
1. Comparison of the implementation into national legislation of the main EU Directives to drive energy efficiency in the buildings
The research activities have been consisted from an extensive desk research activity for
indentifying main policies and regulations enforcing EU energy efficiency and RES
requirements for buildings, combined with a detailed research on existing and planned
financial supporting scheme enabling the enforcement of EU requirements.
The assessment of the policy framework was focusing on the Energy Performance of
Buildings Directive 2002/91/EC (EPBD) and its recast adopted in 2010 as the main EU
legislation which aims to improve the energy efficiency of the EU building stock through
concrete measures.
Besides the EPBD and EPBD recast there are several Directives which are not the main
legislative instruments to improve the energy efficiency of the European building stock, but
they have several provisions reflecting to buildings and through this contribute to the ultimate
goal of the EPBD+recast. These directives are the:
- Energy end use efficiency and Services Directive 2006/32/EC – called ESD;
- First and second National Energy Efficiency Action Plan – called NREEAP;
- Renewable Energy Directive 2009/28/EC – called RED;
- National Renewable Energy Action Plan – called NREAP;
- Cogeneration Directive 2004/8/EC – called CHP.
The national transposition of the above listed directives is in place, except in Poland, where
the full transposition of the ESD requires several secondary legislations to be approved and in
the case of RED the transposition is only under way and is expecting the new Renewable
Energy Sources Act to enter into force.
The implementation, enforcement of the relevant directives is very different from country to
country and also the success and effectiveness of the implementation. The reasons are
multiple starting from staff capacity, accuracy of the transpositions and secondary
legislations, effectiveness of national regulations to financing tools to support the
implementing measures, motivation and understanding of the problems etc. The national
reports which have to be developed according to the ESD and RED directives, identify the
main long term strategies, but also the gaps on which each country has to develop improve,
through developing more in details the legislative framework, altering their financial
supporting schemes to provide more support for energy efficiency and renewables
18
technologies and implementation of low carbon refurbishment projects in cooperation with
the banking sector.
The national responsible institutions for the implementations are usually identified, however
there is a need for close cooperation with several Ministries and Governmental Agencies due
to the centralized systems still existing in CEE countries (not necessarily the case in the
Netherlands). Departments restructuring, staff fluctuation and workload usually are hindering
smooth implementation too.
19
Country EPBD ESD NEEAP RED NREAP CHP
Bulgaria The implementation
of the Energy
Performance of
Buildings Directive
2002/91/EC falls
within the
responsibility of the
Ministry of Energy,
Economy and
Tourism, the
Ministry of Regional
Development and
Public Works and
the Energy
Efficiency Agency
(EEA). The EPBD
was transposed into
national legislation
through the Energy
Efficiency Act from
2004, which was
continuously
updated and
amended in 2009.
The current version
of the Act is fully in
line with the EPBD
requirements.
The
implementation
of the Energy end
use efficiency and
Services
Directive
2006/32/EC falls
within the
responsibility of
the Ministry of
Economy, Energy
and Tourism,
however the
monitoring and
control is
delegated to the
Energy Efficiency
Agency. The
directive is
transposed into
national
legislation by the
new Energy
Efficiency Act
amended in 2008.
In line with the
Art 14 of the ESD,
Bulgaria has
prepared and
submitted the 1st
and 2nd
NEEAP.
Has adopted a
national indicative
target of 9% for
the 2008-2016
period and an
intermediary
target of 3% for
2008-2010 period.
The 1st
NEEAP
was developed
only for 2008-
2010, while the
targets set in the
strategy cover the
2008-2016 period.
The indicative and
intermediary
targets set were
determined based
on the final inland
energy
consumption from
2001 until 2005.
The
implementation of
the Renewable
Energy Directive
2009/28/EC falls
within the
responsibility of
the Ministry of
Economy, Energy
and Tourism and
the State Energy
and Water
Regulatory
Commission. The
Renewable and
Alternative
Energy Sources
on Biofuels Act
and the Energy
Act was
transposing the
2001/77/EC
Directive on
electricity
produced from
RES and the
2003/30/EC
Directive on
promotion of
The NREAP is the
main instrument in
Bulgaria to assure
fulfillment of the
country’s RES
target. Mandatory
targets set for
2020 by the EC
are 16% share of
RES in the gross
final energy
consumption and
10% renewables in
the transport
sector.
The
implementation
of the
Cogeneration
Directive
2004/8/EC falls
within the
responsibility of
the Ministry of
the Economy,
Energy and
Tourism and it is
transposed into
national
legislation
through the
Energy Act
amended several
times. The new
Renewable
Energy Act also
covers the CHP
from the energy
consumption
side. The new
Act support will
be provided for
the RES based
heating and
20
biofuels or other
renewable fuels
for transport.
Following the
adoption of the
new RED in
2009, Bulgaria
has developed
and in 2011
adopted a so
called new
Renewable
Energy Act,
which transposes
the RED
2009/28/EC.
cooling
especially in the
new buildings,
however if
buildings cannot
implement
individual
renewable
systems can
choose from
other measures
like connection
to heat
distribution
networks or
combined heat
and power
facilities.
Hungary The implementation
of the Energy
Performance of
Buildings
Directive2002/91/EC
falls within the
responsibility of the
Ministry of National
Development. The
Directive is
transposed into
national legislation
by the Gov. Decree
The
implementation
of the Energy end
use efficiency and
Services
Directive
2006/32/EC falls
within the
responsibility of
the Ministry if
National
Development.
The Directive is
In line with the
Art 14 of the ESD,
Hungary has
prepared and
submitted the 1st
and 2nd
NEEAP.
Has adopted a
national indicative
target of 9% for
the 2008-2016
period,
information
regarding the
The
implementation
(with respects to
buildings and
pricing) of the
Renewable
Energy Directive
2009/28/EC falls
within the
responsibility of
the Ministry of
National
Development,
According to the
RED, Hungary has
to achieve a
minimum 13%
legally binding
target for the share
of renewable
energy sources in
gross final energy
consumption by
2020 and 10%
renewables in the
transport sector,
The
implementation
of the
Cogeneration
Directive
2004/8/EC falls
mainly within
the responsibility
of the Ministry
of National
Development
and the
Hungarian
21
7/2006. (V.24.) on
energetic attributes
of buildings, Gov.
Decree 176/2008.
(VI. 30.) on energy
certification of
buildings and Gov.
Decree 264/2008.
(XI.6.) on energetic
inspection of boilers
and air-conditioning
systems.
transposed into
national
legislation by the
Energy Efficiency
Action Plan for
Hungary, by Gov.
Decree 176/2008.
(VI. 30.) on
energy
certification of
buildings, by the
Law XL./2008 on
gas supply, by the
Law
LXXXVI./2007
on electricity and
by Gov. Decree
237/2007. (X.
19.) on
implementing
certain provisions
of the electricity
Law
LXXXVI/2007.
intermediary
target is
contradictory in
the 1st NEEAP.
The 2nd
NEEAP
under the
Hungary’s
National Reform
Programme, plans
to achieving a
10% energy
savings by 2020
instead of the 9%
initially set in the
NEEAPs.
According to the
2nd
NEEAP, the
interim energy
savings achieved
is higher 12.25
PJ/year than the
planned one, 9.4
PJ/year for 2010.
together with the
Hungarian Energy
Office regarding
energy
authorisations.
Transposition is
assured through
amending certain
provisions of the
Law on electricity
LXXXVI. from
2007 through
Gov. Decree nr.
273/2007, Gov.
Decree nr.
389/2007 and
287/2008 on
RES-E price
regulations, Act
XL of 2008 on
natural gas supply
and Gov. Decree
nr.19/2009 on
natural gas usage,
Act CXVII of
2010 and Gov.
Decree nr.
138/2009 (IV.
30.) on use of
renewables for
transport etc.; the
NREAP sets the
however the
NREAP sets a
higher objective of
14.65%
renewables in
gross final energy
consumption to be
achieved by 2020.
The government
considers the new
target realistic, but
the need for
adapting the
existing policy and
supporting frame
is needed.
Measures planned
are directed
towards changing
the existing feed
in tariff system
(FiT), evaluating
the subsidy
schemes, aid
schemes,
developing new
ones, review of the
regulatory and
authorization
procedures, R&D,
capacity building
etc., all these to
Energy Office
and it is
transposed into
national
legislation
through the
Electricity Law
LXXXVI. from
2007, Gov.
Decree nr.
389/2007.
(XII.23.) on
certification of
the origin and
mandatory off-
take of the
electricity
produced from
renewables or
waste and
cogeneration and
the price,
Ministerial
Decree nr.
110/2007. (XII.
23.) on the
calculation
method for
determining the
amount of high
efficiency
cogeneration
22
strategy which the
country plans to
follow in utilizing
RES for different
sectors in order to
meet the 2020
targets and boost
the green
economy.
support the
increase of RES
investments and
RES utilization
also in the
building sector.
There seems to be
a delay in
implementing the
planned measures.
useful heat and
electricity and
Ministerial
Decree nr.
91/2007 (XI. 20.)
on the public
administration
service fee rates
payable to the
Hungarian
Energy Office
and on the rules
of payment of
administrative
service and
supervisory fees.
Poland The implementation
of the Energy
Performance of
Buildings Directive
2002/91/EC falls
within the
responsibility of the
Ministry of
Transport,
Construction and
Maritime Economy.
The Directive is
transposed into
national law by
amending the
The
implementation
of the Energy end
use efficiency and
Services
Directive
2006/32/EC falls
within the
responsibility of
the Ministry of
Economy. For the
implementation
of the NEEAP
several ministries
and governmental
In line with the
Art 14 of the ESD,
Poland has
prepared and
submitted the 1st
and 2nd
NEEAP.
Has adopted a
national indicative
target of 9% for
the 2008-2016
period, and a
national indicative
intermediary
target of 2% by
2010. The
The
implementation
(with respects to
buildings and
pricing) of the
Renewable
Energy Directive
2009/28/EC falls
within the
responsibility of
the Ministry of
Economy, in
cooperation with
the Polish Energy
Regulatory Office
According to the
RED, Poland has
to achieve a
minimum 15%
legally binding
target for the share
of renewable
energy sources in
gross final energy
consumption by
2020 and 10%
renewables in the
transport sector.
The Polish Energy
Policy until 2030
The
implementation
of the
Cogeneration
Directive
2004/8/EC falls
mainly within
the responsibility
of the Ministry
of Economy and
the Energy
Regulatory
Office and it is
transposed into
national
23
Construction Law in
2007, 2008 and 2009
through Ministerial
Ordinances on
secondary
legislations.
The implementation
of the Directive
started in late 2007
after amending the
Construction Law,
but due to the several
criticisms related to
the legal mistakes in
the transposition, in
the methodology
how to calculate the
energy performance
etc., several
amendments were
approved by the
Government.
institutions need
to cooperate. The
Directive is
transposed into
national
legislation by the
Energy Efficiency
Law, adopted in
2011, but there is
still a need for
several secondary
legislations to be
adopted in order
to fully transpose
the ESD.
indicative and
intermediary
targets set were
determined based
on the final inland
energy
consumption from
2001 until 2005.
According to the
new Energy
Efficiency Law,
the Ministry of
Economy should
recalculate the
national energy
saving targets
every three years,
assuring by this to
achieve at least
9% reduction of
the 2001-2005
final energy
consumption by
2016. The 2nd
NEEAP shows
already that the
intermediary
target of 2% set
for 2010 has been
exceeded, and the
in total a 5.9%
final energy
responsible for
the Renewable
Energy
Certificates. The
Directives
2001/77/EC and
2003/30/EC were
transposed into
national
legislation by
amending several
times the Energy
Act and
Environmental
Act. The full
transposition of
the Directive
2009/28/EC will
be done when the
new Renewable
Energy Sources
Act will enter into
force. The draft
RES Act was sent
for inter-
ministerial and
public
consultation on
23 December
2011. It should be
mentioned that
several provision
is the main
strategical
document which
describes the path
how to achieve the
2020 targets for
each type of
energy like
electricity, heat
and cooling and
renewable energy
in transport.
Measures existing
and planed are
focusing on
supporting the
electricity
production from
RES through
certificates of
origin,
introducing
support
mechanisms for
the uptake of heat
and cold
production from
RES, regulations
for wind farm and
biogas
powerplants
constructions,
legislation
through the
approved
amendments of
the Energy Act,
Environmental
Protection Act
and the
Compliance
Assessment
System Act. The
regulation
supporting the
high efficiency
cogenerations
came into force
in 2007.
24
saving was
achieved. The
highest saving is
originated from
the Polish housing
sector mostly due
to the Thermo-
modernization and
Repairs Fund.
of the RED are
already
transposed and
are already
implemented
through the
amended Energy
Act. The new
RES Law will
serve the
optimization of
the existing
supporting
mechanisms and
will focus on the
transposition of
those provisions
of the RED which
are not covered
by the existing
Act and will need
to enter into force
later on, like the
certification
scheme of the
RES installers
from 2013 and
RES obligations
for buildings as of
2014.
RES connection to
the grid, electricity
network upgrade,
exemption from
excise duty,
stimulating the
industry through
RES technology
support etc.
Romania The implementation
of the Energy
The
implementation
In line with the
Art 14 of the ESD,
The
implementation of
According to the
RED, Romania
The
implementation
25
Performance of
Buildings Directive
2002/91/EC falls
within the
responsibility of the
Ministry of Regional
Development and
Tourism. The
Directive is
transposed into
national law the Law
372/2005 adopted in
January 2007 and
provides the full
transposition of the
EPBD, together with
several Ministerial
Ordinances on
secondary
legislations.
of the Energy end
use efficiency and
Services
Directive
2006/32/EC falls
within the
responsibility of
the Ministry of
Economy Trade
and Business
Affairs, in
cooperation with
the Ministry of
Interior, Ministry
of Regional
Development and
Housing and
Ministry of Public
Finance. The
Directive is
transposed into
national
legislation by the
Governmental
Ordinance no
22/2008
supervised by the
Romanian Energy
regulatory
Authority based
on Gov. decree no
1428/2009.
Romania has
prepared and
submitted the 1st
and 2nd
NEEAP.
Has adopted a
national indicative
target of 13.5%
for the 2008-2016
period, and an
intermediary
target of 4.5% for
2010. The 2nd
NEEAP shows
that Romania has
doubled the
intermediary
target set for 2010
and is in line to
reach the 2016
targets.
the Renewable
Energy Directive
2009/28/EC falls
within the
responsibility of
the Ministry of
Economy, Trade
and Business
Affairs in
cooperation with
the National
Energy
Regulatory
Authority.
Responsible
Ministries in
relation to RES in
buildings are the
Ministry of
Regional
Development,
Ministry of
Environment and
Forests, Ministry
of Agriculture
and Rural
Development.
The transposition
of the RED was
done by
amending the
Law no. 220/2008
has to achieve a
minimum 24%
legally binding
target for the share
of renewable
energy sources in
gross final energy
consumption by
2020 and 10%
renewables in the
transport sector.
According to the
NREAP, wind,
hydro and biomass
for CHP will be
the main sources
to achieve the
RES target.
The current key
policy instrument
in the country is
the quota
obligation based
on the Green
Certificates.
of the
Cogeneration
Directive
2004/8/EC falls
mainly within
the responsibility
of the Ministry
of Economy
Trade and
Business Affairs
together with the
National Energy
Regulatory
Authority. The
CHP is
transposed into
national
legislation
through the Gov.
Decree
219/2007. The
decree regulated
the cogeneration
efficiency
criteria, the
guarantees of
origin, access to
network, support
scheme for CHP-
E based on the
useful heat
demand. The
26
on promoting
energy produced
from renewable
energy sources
and several
Governmental
Decrees (88/2011,
935/2011). The
Law no 139/2010
is amending and
supplementing the
Law no.
220/2008.
Law no. 13/
2007 sets down
market rules to
assure the
priority access of
electricity
produced from
cogeneration.
The Netherlands The implementation
of the Energy
Performance of
Buildings Directive
2002/91/EC falls
within the
responsibility of the
Ministry of Interior
and Kingdom
relations, the Dutch
Energy Agency is
the executive body
for the
implementation
process. The
Directive is
transposed into
national law through
the Decree on energy
The
implementation
of the Energy end
use efficiency and
Services
Directive
2006/32/EC falls
within the
responsibility of
the Ministry of
Economic
Affairs,
agriculture and
Innovation. The
directive will be
fully transposed
by the Rules
regarding energy
efficiency Law.
In line with the
Art 14 of the ESD,
the Netherlands
has prepared and
submitted the 1st
and 2nd
NEEAP.
Has adopted a
national indicative
target of 9% for
the 2008-2016
period, and an
intermediary
target of 2% for
2010. In the 2nd
NEEAP there is
some re-
interpretation of
saving reported in
the 1st NEEAP.
The
implementation of
the Renewable
Energy Directive
2009/28/EC falls
within the
responsibility of
the Ministry of
Economic
Affairs,
Agriculture and
Innovation and
the Ministry of
Infrastructure and
the Environment.
The transposition
of the RED was
done through the
Environmental
According to the
RED, the
Netherlands has to
achieve a
minimum 14%
legally binding
target for the share
of renewable
energy sources in
gross final energy
consumption by
2020 and 10%
renewables in the
transport sector.
The main
supporting
instrument for
RES energy
production is the
The
implementation
of the
Cogeneration
Directive
2004/8/EC falls
mainly within
the responsibility
of the Ministry
of Economic
Affairs. The
CHP is
transposed into
national
legislation,
however there
are criticism
related to the
support given
27
performance of
buildings called
BEG and through the
Regulation on
energy performance
of buildings called
REG. The inspection
of A/C is regulated
through different
law, but this will be
changed and it will
be regulated in the
Environmental Law.
Explanation is that
in the 2nd
NEEAP
all kind of savings
arising from
policy measures
and autonomously
can be included
under the total
savings. The
intermediary
targets have been
met and the 2nd
NEEAP states that
2016 target will
also be met.
Law Act from
2010 and the Act
on biofuels from
January 2011,
however there is a
need for
secondary
legislations to be
approved.
so called SDE+
feed in premium
scheme, planned
to enter into force
from mid 2011.
the scheme is
supporting the
short term
implementation of
renewable energy
projects. The size
of the premium
will be adjusted to
the technology
used and to the
wholesale price of
the electricity
produced.
and market
penetration. The
SDE+ is
expected to
provide help
regarding the
CHP uptake in
the Netherlands.
28
2. Comparison of the five energy audits
The table below summarizes and compares the energy audits made in the five target countries.
Information provided from this exercise is used in the further in the analysis section.
Bulgaria Hungary the Netherlands
Poland Romania
Type of House
Multifamily
residential
building. The
building has 4
floors with
basement and
attic. The
construction is
solid with
vertical load-
bearing walls of
brick masonry
(solid bricks)
and concrete
slabs. The
foundations are
from stone
mansory. The
building has two
sections each
with 8
apartments. The
roof is wooden
pitched “cold”
roof covered
with ceramic
tiles. Most of the
attics in the
building are not
used (in some
cases they are
used for
storage).
Three storey
family brick
house,
covered with
Thermopor
ceramic and
built between
1985 and
1995.
Two storey
brick semi
detached
family house.
Three storey
traditional
family brick
house with one
apartment and
3 occupants.
Multifamily
residential
building. The
block
comprises 39
appartments
with balconies
and common
areas (casa
scării,
basement,
lavatories and
drying rooms).
Energy Efficiency Target
After
implementation
of the proposed
energy
efficiency
Maximum
achievable is
81% savings.
38.6%
reduction in
consumption
77.4%
reduction in
heating
consumption.
From the
analysis of
values
indicated in
energy audit
29
measures the
energy
consumption
will be reduced
to 107.2
kWh/m2a, which
is 61%
reduction.
results that the
proposed
solutions /
package for
modernization
lead to energy
savings of 0.34
– 17.39%, the
total relative
savings being
31.95%
Proposed Technology
Walls insulation
- 100 mm EPS,
Roof insulation
– 110 mm XPS
and mineral
wool, Windows
replacement –
triple glazing,
PVC profile,
Floor insulation–
100 mm XPS,
Flow restrictors
for DHW,
Energy efficient
lighting,
Behavior change
and new
appliances
Energy
efficient
windows, roof
and wall
insulation,
upgrading
heating
system,
condensating
gas boiler or
heat pump or
pellet boiler,
solar panel for
hot water
production,
ventilation,
radiator
valves,
heating
control,
insulating
pipes of the
hot water
system and
install control
system on the
hot water
system. Eight
different
options are
offered in the
energy audit.
Exterior
wall, ground
floor and
roof
insulation,
high efficient
glazing, solar
collector for
hot water
production,
Change of
heating
system,
insulation of
slab over the
basement,
modernization
of DHW
system,
insulation of
roof,
modernization
of ventilation
system,
insulation of
external walls.
General
energetic
rehabilitation
of the
building’s
envelope by
thermal
insulation of
the facades and
rehabilitation
of the finishes;
The changing
of the carpentry
with PVC
frames and
thermo-
insulated
windows;
Terrace
thermo-
insulation;
thermo-
insulation of
the stairs/
garbage
disposal
entrance and
thermal
insulation of
the ceiling
above the un-
heated
basement;
The necessity
of total
rehabilitation
of the heating
and hot water
30
pipes
distribution
network etc. at
the
investigation
date of the
building, the
process of
rehabilitation
concerning the
basement
installations
was still
running, being
rehabilitated
approximately
80% of the
total
distribution
pipes for
heating and
domestic hot
water.
Financing Demand
77 005.67 EUR In option 5
with the
highest saving
potential of
81% the total
investment
cost is:
18.960.000
HUF
(Windows 3
million,
insulation
5.96 million,
heat pump
with solar hot
water system
5 million)
65.380 EUR
4.776 EUR. 77.168 PLN =
17.795 EUR
115.068 EUR
Gap in Financing
The upfront
capital cost is
significant. It is
over 77 thousand
EUR. The
simple payback
is just over 8
Simple
payback of
measures is
between 19
and 50 years.
It is very
challenging to
The simple
payback is 8
years. The
upfront
investment
cost is not
very high,
The upfront
cost is
significant.
The simple
payback is
23.6 years.
The owner
The total
upfront cost is
significant,
11.068 EUR.
The simple
payback in
unknown.
31
years. secure funding
for this long
period.
however, the
8 year
payback can
represent
barrier.
plans to
finance 80% of
the project
from loan.
However, it is
difficult to
secure funding
for over 20
years.
3. Comparison of finance mechanisms
The following table summarizes the financing mechanism in the target countries.The
assessment focuses on the following key characteristics of the programmes:
• Scale: Programmes with small scale are marked if they offer financing below EUR 1
million and if they are able to support small number of home retrofits (below 500).
Medium scale is up to EUR 5 million and 2500 homes. Anything above it falls into the
category of large. Scaling is important because we search for large scale financing
mechanisms which are able to successfully handle ten thousands of retrofit projects
and not only a few hundred or less.
• Type: The type of financial instrument, and the financial product are assessed.
Currently the most popular financial instruments are grants, interest rate subsidies,
loan guarantee subsidies, advisory support in the form of the energy audit and tax
relief. The conditions of these different types of supports are also assessed with the
aim of being able to tell what type of supports with what type of conditions lead likely
to a successful large scale finance programme.
• Measures: Measures and aimed carbon dioxide and/or energy saving reductions are
also covered. The aim is to look at which mechanisms are able to address the problem
of the “lock in” effect, with other words, which mechanisms are able to provide
financing for deep retrofit of homes, aiming to achieve 60 or higher % of savings in
carbon dioxide and energy consumption.
• Administration: Information on procedural practices are also collected, to look for
mechanisms which work with streamlined procedures of application, decision making
and administration of financing support. The aim is to assess streamlined procedures
which likely to be more preferable for applicants than procedures which make
decision on projects one by one.
• Implementation: The management and implementation structures of the programmes
and mechanisms are also examined. Two main different types of structures are
distinguished, the centralized and the decentralized management approaches. The aim
is to see which one is more supportive to make a finance programme more successful
and achieve larger scale of financing and larger number of retrofit projects.
32
• Gaps: The aim is to identify any gaps or areas for improvement looking at the original
aim of the programmes and in the case the original goals were not achieved we try to
identify the reasons and identify the gaps which have to be addressed in order to
improve efficiency of programmes.
33
The following table summarizes the findings:
Countries and names of programmes
Scale (small, medium, large)
Financial instrument and financial product (grant, subsidy, terms and conditions of the financial support)
Measures and savings are targeted
(EE measures and sectors)
Streamlined procedures (yes or no)
Implementation and management
(local, centralized, accessibility)
Gap
(between aim and what the programme achieved or capable to achieve and how far it is from supporting to avoid the ‘lock in’ effect)
Development Banks WB-IFC Bulgaria-
BgEEF
Large scale programme,
with approx. EUR 10
million. The programme
has a residential
component as well but it
is unknown how many
projects they supported.
Further research is
needed
Provides advisory
support, loans and
credit guarantees
and portfolio
guarantees for the
residential housing
sector.
Energy
efficiency and
renewable
energy measures
in general.
Sectors:
municipal,
private industrial
and residential
sectors
Information is
not available.
Further
research is
needed.
Locally managed Information is not
available. Further
research is needed
Hugnary-
HEECP
Large scale programme,
with approx. EUR 12
million. The programme
Provides advisory
support and credit as
well as portfolio
Energy
efficiency and
renewable
Yes, in the
second phase
of the
Locally managed
34
has a residential
component which
supported over 50.000
home refurbishments
guarantees energy measures
in general.
Residential
housing sector
(multi family
homes),
municipal and
industrial sectors
programme all
procedures
were
streamlined
Central
Eastern
Europe-CEEF
Large scale programme,
with approx. EUR 112.5
million. The programme
has a residential
component. Number of
supported homes is
unknown. More research
is needed.
Provides advisory
support and credit as
well as portfolio
guarantees
Energy
efficiency and
renewable
energy measures
in general.
Residential
housing sector
(multi family
homes),
municipal and
industrial sectors
Yes, all
procedures
were
streamlined
Locally managed
KfW Germany -
Communal
Credit
programme
Large scale programme.
The programme supports
residential home retrofit
and new build. In 2008
more than 500.000
homes were supported.
Provides advisory
support and loan
support (interest rate
subsidy)
Energy
efficiency and
renewable
energy measures
in general
Residential
housing sector
Yes Locally managed
and available
through local
commercial banks
EBRD Bulgaria
35
Residential
Energy
Efficiency
Credit Line
Large scale programme,
with approx. EUR 50
million. The programme
supports residential home
retrofit. More than
28.000 home
refurbishments were
supported
Grants and loans.
Grants are provided
in the percentage of
the loan.
Energy
efficiency and
renewable
energy measures
in general
Residential
housing sector
both for
individual home
owners and
block of flats
Information is
not available.
Further
research is
needed
Locally managed
and available
through local
commercial banks
Modest success
Hungary –
EBRD credit
line
Large scale, EUR 40
million was allocated for
2 commercial banks.
Indirect support for
residential buildings via
municipal projects.
Loan scheme and
from additional
funding from the
European
Commission
advisory support for
banks and
municipalities were
also provided
Energy
efficiency
measures
Municipal sector
(residential
sector only
indirectly
supported via
upgrading
district heating
networks)
Yes Locally managed
by commercial
banks
Governmental Programmes Romania Subsidised
housing saving
account
The scale of the loan
programme can be only
estimated, because it is
attached to the
governmental grant
programme under which
Loan scheme (100%
of the interest is
covered by the
government) The loan is attached
to two governmental
Energy
efficiency
measures for
individual home
owners and
multi family
Information is
not available
Information is not
available
Target is 1.2
million flat and
only 5% of the
target was
reached out.
Estimated that
36
EUR 35.3 million was
allocated yearly in 2010
and 2011 60.000 homes
were supported.
Approximately 25% of
the capital cost was loan,
therefore we assume that
the loan program had a
scale of EUR 25 million
programmes, the
Thermal
rehabilitation loan
for individuals and
the Rehabilitation
credit for apartment
owners associations
house owners 100 years would
be needed to
reach target.
Hungary Subsidised
housing saving
account
Unknown Grant scheme,
providing
percentage of
savings as grant for
home owners
Energy
efficiency
measures for
residential
building sector
Yes Locally managed
via building
societies
Interest rate
subsidy
The National
Development Bank
reported that the scale of
the program was EUR 40
million. (panel plus
programme). However,
the interest subsidy is
available for other types
of retrofit loans,
therefore the scale is
bigger than EUR 40, but
the exact number is
unknown
Loan scheme,
providing interest
subsidy
Energy
efficiency
measures for
residential
building (multi
family
apartment
buildings)
Yes Locally managed
via commercial
banks
Poland Thermo
modernization
Large scale, EUR 72
million yearly from the
Grant scheme, 25%
of the loan taken by
Energy
efficiency
No.
Complicated
Centralized,
managed by the
The aim was to
refurbish 2.4
37
fund
government. 20000
home refurbishment was
supported
home owners or
16% of the total
investment cost of
the refurbishment
measures for
residential
buildings
application
procedure
National Economy
Bank
million homes
within 10 years.
However, the
programme
funded only 500
to 1500 per year
The Netherlands The Green
Fund Scheme
Large scale, EUR 7
billion. Supported over
5.000 projects including
sustainable housing
Loan scheme.
Interest subsidy: 2%
off from the
commercial interest
rate
“Green” projects
(criteria is
unknown) in
organic
agriculture,
sustainable
greenhouses,
nature
conservation and
residential
buildings
Unknown Locally managed
via commercial
banks
TELI-EE in
low-income
households
Medium scale, EUR
5million was allocated
Grant in 80% and
loan in 20%. The
loan scheme is
subsidized but it is
unknown how
Energy
efficiency
measures in low
income
households
Green
mortgage
Unknown Loan scheme, 1%
interest subsidy
deducted from
commercial loan
rates
Sustainable
housing.
Definition is
unknown.
Available for
retrofit and new
built too.
Unknown Locally
implemented by
commercial banks
The UK The green deal EUR 250 million will be Grant, but after the Energy Unknown Implemented by The plan is to
38
allocated in the first year
to support early uptakes
EUR 250 million it
is expected that no
public money will
be required
efficiency
measures for
residential
housing
Green Deal
providers locally
support 150.000
home
refurbishment in
the first year of
operation in 2013
Eco-fit loan Small scale with EUR
360.000. 35 homes were
supported
Grant support to
provide advisory
support in the form
of a home energy
plan or audit and a
loan scheme to
provide £10.000
maximum per house
and zero interest
rate with EUR 40
payment obligation
per month
Energy
efficiency and
renewable
energy measures
for residential
home owners
No Locally managed
by the East
Hampshire District
Council Whitehill
and Bordon Eco
town team
The programme
met its goals
39
Scale
Most of the programmes are large scale programmes, exceeding the EUR 5 million budget in
total. The main question here is how much these programmes spend on each household to
facilitate the energy efficient refurbishment. Among the housing loan schemes the spending
per household varies between EUR 240 (HEECP, Hungary) and EUR 10.200 (Eco-fit loan,
The UK). The HEECP programme is a guarantee scheme and the Eco-fit loan is an interest
free loan scheme where 100% of the capital cost is provided as a repayable loan. Based on
these two examples, with EUR 1 million investment into the programme, HEECP could
support 4.166 home refurbishments in Hungary (0.10415% of existing housing stock in
Hungary) and Eco-fit could support 97.2 thousand homes (0.16% of UK housing stock) it
could be possible to support.
HEECP utilized EUR 12 million and supported over 50 thousand home refurbishments over
the years of programme operation and spent EUR 240 on each home. Proportionally with the
EUR 1 million into the programme it could be possible to support 4.166 home refurbishments.
There are approximately 4 million homes in Hungary, therefore the 4.166 homes represents
0.10415% of existing homes. The Eco-fit loan utilized EUR 360.000 and supported 35 homes,
spending EUR 10.200 on each homes. Proportionally, the EUR 1 million investments into the
programme could support 97 home refurbishments. There are approximately 60 million
homes in the UK, therefore the 97 homes represents 0.00016167% of the existing housing
stock in the UK.
Based on this example with one unit investment into a loan guarantee scheme it is possible to
support 43 times more homes than with one unit investment into an interest free loan scheme.
At this section the details of the schemes are not important rather the general impression
about the fact that loan guarantees are cheaper than interest free loans in general.
The second important beside the loans value is the uptake of the programmes. Data is not
always available, therefore the comparison of all programmes listed above cannot be done,
however, it can be highlighted that both HEECP and CEEF, as well as the Thermo
modernization fund in Poland reported slow start up and uptakes from end-users. The general
message is that when a programme announces a certain scale it might take more years to
reach that level of investment size than it was planned and expected by the investors. By the
time when the programme and the financial mechanism delivers results, investors might
decide to close the programme. For example in the case of HEECP it took 10 years to reach
the number of 50.000 home refurbishments. By the time when the programme demonstrated
that it is capable to deliver large scale residential housing retrofit, the investor decided to
close the programme in 2008. Continuing the programme and investing more into it could
have increased the number of home refurbishments exponentially in the following years.
Demand is another key issue. Is the market ready to soak up available funding? In some cases
it takes only month to fully utilize available funding and in some other cases it takes years for
the market to upscale.
Financial instrument and the financial product
40
Most of the progremmes offer grants and or loan interest subsidies. Often small scale grants
are offered to finance energy audit and larger scale of grants are offered to partially fund the
capital cost of the investment. Capital cost grants are offered as a percentage of the loan or as
a percentage of the capital cost of the project. In many cases the grant scheme is directly
attached to the loan scheme or to a governmental programme to facilitate quicker uptake from
end-users. Even if the subsidized schemes are not directly advertised as to be attached to
governmental grant schemes, they are often used mostly with the governmental funds, serving
as the required own funds from applicants for grant funding.
The level of grant can achieve the 80% intensity (TELI-EE programme in the Netherlands),
but usually they are in the range of 20-50% of the investment cost. In some advanced
programmes the level of grant is matched with the targeted energy savings. Those who save
more receive higher level of support. However, most of the programmes are lacking this
element. It could have been a good approach to aim for 60% emission reduction when the
funding intensity is high.
In case of interest subsidy programmes, the level of support varies. There are some
programmes where the level of support is 1% cut from the commercial interest rate (Green
mortgage, the Netherlands) and there are other programmes where the level of support is
much higher and can achieve the level of 6.75% cut (Interest rate subsidy programme,
Hungary) where the government provides 75% of the interest rate, which can mean 6.75%
with current market prices. In old member states such as the Netherlands (Green mortgage
scheme) and Germany (KfW scheme) 1-2% interest rate subsidy can mean a significant
support, because market based borrowing rates are obviously much lower than in new
member states such as in Hungary. Therefore, interest subsidy programmes are more
expensive in Central Eastern Europe than in Western Europe.
It might happen that preferential mortgage loans offering interest subsidies are successful in
Western Europe and they fail in Eastern Europe. The main reason is probably that providing
interest rate subsidy in Western Europe costs less because the base rate and interest margin is
lower than in Central Eastern European countries. Also, the disposable income of families are
different in Western and Eastern Europe. Average wages are lower in Eastern Europe than in
Western Europe, therefore the fuel bills and monthly loan payments for the same type of
investments means a greater burden on households even if the investment cost in Eastern
Europe is lower than in Western Europe.
Guarantee programmes support loans on a different way than interest subsidy programmes.
The interest subsidy is for reducing the monthly cost of loan repayments for the customers,
guarantee programmes are for reducing the collateral requirement from customers. Guarantee
schemes, such as the HEECP and CEEF are capable to reduce the collateral requirements
from borrowers to the minimum. HEECP for example replaces 100% of the required
collateral which means that borrowers do not have to offer any security such as mortgage or
cash security to be eligible for the loan.
Both interest subsidies and guarantees for household retrofit loans were able to generate large
interest, however, on longer term. It demonstrates that even if the finance conditions are very
41
favorable, often householders do not apply for the loans. Many programmes reported on slow
start up (HEECP, CEEF, Thermo modernization fund).
Guarantees and interest rate subsidies are very popular because they ease the access to loans
and also, they lower the payback time.
Measures and aimed carbon dioxide and/or energy saving reductions
In terms of measures most of the energy efficiency and renewable energy measures are
supported by the researched programmes. However, there is no programme which supports
only complex and deep retrofit projects. There are programmes which provide higher level of
support for higher energy efficiency savings (KfW programme) but most of the finance
schemes do not have any high level target. Many schemes are implemented via commercial
banks and energy saving is not the first priority for them. However, it should be, because the
more the borrower can save on energy cost, the more he becomes capable to pay back the
loan. It is possible that because the commercial banks are not motivated to support higher
level of energy savings, the governmental subsidy programmes which are linked to the banks
are potentially ‘bank washed’ and undermine the governmental targets of achieving the aimed
energy savings.
In the case studies there is limited information available on how much energy was saved
because many programmes do not require post-refurbishment monitoring. Grants are
available only for the energy audit which is about to show how much energy can be saved but
no grants are available usually for monitoring the actual energy cost savings. If it is not
obligatory, householders do not monitor energy savings because they are not willing to invest
into monitoring.
In the case it is not required or not funded, households do not make effort to do the energy
audit. They make decisions based on common knowledge or based on what the merchant
offers.
Most of the programmes are lacking having ambitious targets to avoid the lock in effect. The
most popular measures are insulation, boiler and heating upgrades and window exchanges.
Some programmes also support renewables, but most of the schemes are focusing on energy
efficiency measures only. Most of the programmes are aiming for the number of homes to be
retrofit at the first place, suggesting that most of the schemes are designed to reach as many
households are possible and they are not designed to save as many energy as possible.
Administration, Procedural practices
Procedural practices are important, because from the end-user point of view it is preferred if
the financing is easily accessible. Procedural practices can make a financing more or less
easily accessible depending on how the application is designed. Most of those programmes
which are implemented via commercial banks are using streamlined procedures. This means
that the end user has to apply for financing via the commercial bank and not from the fund
provider such as the government. This makes the financing more accessible, because the
banks usually have more offices, branches where the customers can apply and the
42
governments has only a few if any regional agencies to deal with applications. Also, banks are
profit oriented and they are interested in reducing administration costs of loans. Therefore,
banks are interested in simplifying application and decision making procedures.
Streamlining and simplification of application processes can have a direct impact on number
of applications. In the case of the HEECP programme for example all procedures were
streamlined in 2005 and if we look at the number of homes retrofitted prior and after 2005 we
can see a significant growth in number of applications and issued loans. Of course, there are
other factors which could have resulted in increased number of projects, but the finance
institution reported that they were able to handle more applications because of the streamlined
procedures.
Management and implementation structures
Governmental programmes without the involvement of commercial banks are likely to be
more centralized simply for the reason that they do not have the capacity to keep large
number of offices. Usually finance programmes are implemented via the national
development banks such as the interest rate subsidy programme in Hungary. Then the national
development bank tenders the programme and invites commercial banks to participate in
implementation.
It can be true for those programmes which are created by development banks. They usually
centralize their operations. They rather delegate responsibilities to local commercial banks
than to their own local office staff because they don’t have decision making bodies in country
offices. For example, when the HEECP was decentralized, meaning that decision makings
were delegated from the head quarters of IFC, the commercial banks were delegated to
implement the guarantee scheme and the local office staff of IFC remained responsible to
oversee and facilitate the work of the commercial bank. It can be a very efficient approach,
because it reduces cost. The commercial banks already have a full operation and decision
making system in place in the given country or in the branches. Therefore it is not feasible to
duplicate it via moving management responsibilities of large development banks into the
regions or countries. However, these development banks should consider delegating these
authorities to the commercial banks early to achieve maximum effect. In the case of HEECP
for example, it took more than 5 years to “fully trust” in banks.
Gaps or areas for improvement
It is very difficult to obtain information on original targets of programmes and how these
targets were achieved. When this information is available a huge gap can be seen in terms of
the 2050 target of reducing carbon dioxide emission by 80% will not be met with the support
of these finance programmes.
Most of the programmes are designed in a way that they are capable to achieve only
maximum 40% energy savings such as insulation and building envelop projects. But in reality
they might achieve even less. Most of the programmes are focusing on how many homes
43
received support rather than how much energy was saved. To achieve the 2050 targets of
reducing emissions by 80% with the support of these programmes would require significant
amount of support from governments or development banks, which might not available, and it
would take more than 50 years refurbish housing stock to high standard to avoid the lock in
effect.
III. Analysis of the findings Some of the aforementioned programmes (for example in Bulgaria) have been modestly to
moderately successful so far. Some reasons are obvious, such as the unsupportive legal
framework (for example in Bulgaria the outdated condominium law updated only recently)
others are more strongly related to less transparent political and market barriers. In Poland for
example, although the main programme available has had an impact on the energy efficiency
market, there are many elements of that programme that limits the impact compared to what it
could achieve. One of the most striking difference between the “thermo-modernisation fund”
scheme and other grant schemes present in the CEE region that it requires the owners (all
form) to have own funds of at least 20% of the investment need, and limits the loan to
maximum 80% of the investment, while providing attached to the loan a maximum of 16%
grant of the investment need. While in Romania we can see the exact opposite trend,
especially when it comes to the fact that the grant is not attached to the loan, but rather
independent. There are many implications when it comes to large scale programmes and
being either on the extreme side of the horse: a “loan-own funds scheme” (64% +20%,
required own funds, small grant of 16%) (Polish) or a “grant-loan scheme” (80% + 20%, no
need for own funds/savings) (Romanian). In the Netherlands for example there are some
disadvantages of the green fund scheme in relation with the building sector. The largest
proportion of projects focus on non-residential sector, such as organic agriculture, sustainable
greenhouses and nature conservation. The narrow market line is dictated by “be profitable but
not too profitable” dictum. Only physical persons can invest with a cap of 47.000 euro per
investor. In the case of housing project the same amount is the limit per house.
Neither legislation nor governmental programmes influence the market to achieve 60%
emission reduction and governmental programmes also not aim for high level of reductions.
In some cases governmental programmes providing up to 80% subsidies but they did not
promote high level (60%) emission reduction targets. Programmes implemented by
commercial banks also do not target high level of emission reductions. Current legislation and
most of the governmental programmes result in only 20-40% emission reduction. The key
issue with legislation is how governments implement them. Governments might be efficient
in adopting European legislation, but there are several issues related to secondary legislations,
and the efficiency of actual implementation. The directives together should aim for achieving
the expected results, but there are difficulties in synchronizing them. In some cases the
directives contradict. For example, in Hungary one directive supported the implementation of
biomass combined heat and power (CHP) technology, resulting in many inefficient projects,
44
because the market took the advantage of the directive and implemented biomass CHP
projects in areas where this technology was less efficient. This was the result of contradicting
directives. Legislation must be synchronized to be able to achieve maximum efficiency.
IV. Conclusion, Recommendation
The currently available legislation and governmental subsidies and finance mechanisms
motivate the market to achieve 20-40% emission reductions. This is much below the 2050
80% reduction target. In order to move into the direction of increasing saving targets and
achieve 60 to 80% emission reduction, legislation, governmental policies and finance
mechanisms need to be further improved.
At the legislation front the first priority is to harmonize the different directives at country
level to achieve high efficiency in implementation. The more accurate development of
secondary legislations, regulations are also needed and harmonization between different laws
at national level is also needed. Building capacity at national and local government level to be
able to efficiently implement and monitor programmes is important. Householders need
information and advice in order to be able to decide how to implement an energy efficiency
project. Without an energy audit and proper advice from an independent body, such as a local
government office, local energy agency it is very difficult for a household to decide which is
the most efficient investments. There are initiatives at EU and local government level to run
energy advisory offices or at least hire an energy expert who is available for the households,
but only in small scale. Usually local governments don’t have the human resource and
financial capacity to provide such a service for the public. As an effect, an average household
who has no access to independent advice, the family will make decision based on common
knowledge or based on an advice from a merchant who is usually interested to sell his or her
own product.
In order to achieve 60% emission reduction, it is very likely that renewable technologies will
have to be implemented. This further complicates the issue. New or unknown technologies
are usually avoided by households who are afraid or simply not informed about the
technology. The cost of a complex investment is also higher than the cost of a 20-40%
emission reduction project. For example, the technical planning for a whole house retrofit
might cost more than the technical planning for replacing the windows and insulate the house.
The institutional framework also needs to be improved. The programmes have to be available
widely. Central and local governmental offices could be organized on a way that the available
governmental programmes become easily available for households and that governmental
offices have the capacity for implementing the programmes and monitor the results. These
offices should also have the role of raise awareness and increase market demand, making sure
that the available programmes are fully and efficiently utilized.
45
Governmental subsidy programmes are usually large scale programmes, suggesting that there
is sufficient amount of subsidy available to support energy efficiency retrofit in the residential
sector. However, innovative finance mechanisms could be developed to leverage
governmental funding more efficiently with private funding. It is also important that financing
programmes should be accessible easily and application procedures should be simplified and
streamlined to motivate the private sector to invest into large scale retrofit projects. The end-
users can be motivated with energy audits. Energy audits are important to show the end-user
the opportunities for saving energy and energy cost. Many governmental programmes support
energy audits which is reasonable because private house owners do not invest in energy audits
by themselves and they don’t make reasonable decisions without an energy audit because they
rely on common knowledge.
Post refurbishment and monitoring is also problematic because private home owners do not
pay for monitoring. Therefore there is no available data on how much savings were achieved
in reality. Governmental policies could also support the monitoring activity which would help
governments to collect energy consumption date and deliver the required reporting.
Finance mechanisms could also be further developed. Complex energy refurbishments,
achieving 60% savings usually have long payback time. The commercial banking sector lends
for five to ten years which is not always sufficient to finance a 60% reduction which might
pays back only in 30 years. Innovative finance mechanisms could reduce payback time and
could reduce security requirements to help end-users to have access to financing more easily.
Interest rate subsidies and guarantees are the most popular mechanisms because with the
combination of the two the payback time could be reduced to the level where private sector
becomes interested in investing into 60% reduction projects and guarantees can reduce the
security requirement which helps those end-users with lack of financial capacity to provide
security for loans.
46
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