Financing Low Carbon Refurbishment. National financial supporting schemes for energy efficiency in the buildings

Transcription

1 Financing Low Carbon Refurbishment National financial supporting schemes for energy efficiency in the buildings In this documents a comprehensive list and description of the national financial supporting schemes to support energy efficiency investment in the building sector is provided. The research has covered all types of funding schemes and is listing running and already exhausted funds too. BULGARIA 1. Exemption from property taxes In Bulgaria according to the Local tax and duties Act from 2005 buildings with energy certificates of category A and B, built and in use before 2005 are exempt from property taxes. The energy certificates issued for these buildings have to be in line with the regulations of the Energy Efficiency Act and Building Certificate. Under the above mentioned categorization classes A and B of the national energy certification system fall under category A of the tax exemption for a period of 7 years; in case renewables are applied during refurbishment, the exemption is valid for 10 years. Classes C and D of the national energy certification system fall under category B of the tax exemption for a period of 3 years; in case renewables are applied during refurbishment, the exemption is valid for 5 years. 2. EU Operational Programme The support for energy efficiency in the building sector of the European Regional Fund and the Operational Programme for regional development was accessible from 2007 till The focus of this programme was more on public buildings, the residential sector was covered through activities focusing on the social housing. Starting from 2011 the European regional Fund has offered an 80 million euro for the refurbishment of residential building sector. According to estimations the fund will finance from 600 to 1200 multi-apartment buildings (depending on the applications and size of the buildings/number of apartments) 3. National Programme for Renovation of multi-family buildings The programme covers 20% of all expenditures for full renovation of private multi-flat panel buildings. The remaining 80% has to be covered by the owners from own savings or commercial loans. The program intends to support the refurbishment of almost dwellings by the end of 2020, of which around are panel buildings, are fero-

2 concrete and massive. The costs of implementing the programme till 2020 is estimated to be above 2 billion euro, with the intensity of the programme growing evenly (2006/7.500 euro/subsidy 2020/75.000/subsidy). So far this programme seems to be the most important subsidy programme related to the housing sector. There are several other programmes related to energy efficient improvements but they are either related to SMEs, industry or public buildings. The program was relatively unsuccessful due to the law that regulated the property owners association however recently the law on property owners associations was improved, and which is expected to positively influence the progress of the programme. 4. National long term energy efficiency programme The National long term energy efficiency programme comprises various measures for reducing the energy consumption of all sectors. The programme is analyzing the conditions and trends of sectors energy efficiency and provides administrative and technical measures to improve their energy efficiency. The housing sector s final energy consumption is around 25% of the total, from which it is estimated that a 40% could be saved with proper energy efficiency measures. 5. Residential Energy Efficiency Credit Line (REECL) The REECL has been developed by the European Bank for Reconstruction and Development (EBRD), the European Commission and the Bulgarian Energy Efficiency Agency in 2004 with a credit line of 40 million euro. The Kozloduy International Decommissioning Support Fund (KIDSF) provides an additional 14 million euro grant and there are two commercial banks currently participating in this fund. By the end of 2009 around small-scale projects were financed. The majority of projects have covered installation of efficient window frames(45%) and installation of heat pumps(27%). The programme is expected to close by 2012 and 45 million euro was already used for the implementation. Under the REECL property owners or Associations of property owners can receive loans and incentive grants through local banks. Property owners or Association of property owners using REECL loan is entitled to receive an incentive grant of 20% (in case of dwellings, with a euro maximum cap/dwelling), an incentive grant of 30%(in case of buildings) or an incentive grant of 35%(in case of measures on both the building envelope and building service systems). Property owners can apply for their incentive grants upon successful completion of the energy efficiency measure, financed by REECL loans and issued by Participating Banks. The incentive grants are paid to the property owners or associations after an independent consultant verifies and confirms that the project has been successfully completed. The programme is regulated by a set of eligibility criteria for identifying measures and technologies to be used. Measures include application of energy efficient windows, wall

3 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. Also a database of suppliers, installers and technologies are available under the programme. The change in the condominium law is expected to increase the current success rate of the funding scheme, however the programme seems to be the most extensively utilized support scheme and an increase of its success is expected till Bulgarian Energy Efficiency Fund (BgEEF) The Bulgarian Energy Efficiency Fund (BgEEF) is a legal entity established under the Art.4 of the Energy Efficiency Act (EEA) from Initially funds were provided from the Global Environment Facility through the World Bank group in the amount of 10 million USD, a 1.5 million euro from the Government of Austria and another 1.5 million euro from the Government of Bulgaria. Along the way several Bulgarian private companies have also contributed to the fund. Up to now there were 112 projects funded from which 59 for municipalities, 9 to universities, 7 to hospitals and 37 to corporate clients. Total project value is BGN 48.9 million (24.45 million euro). The BgEEF has multiple capacities. Simultaneously acts as a lending institution, a credit guarantee facility and also as a consultancy company. BgEEF provides technical assistance to Bulgarian companies, municipalities and private individuals in developing projects, providing co-financing, and acting as a guarantor for other financial institutions. In case of residential buildings BgEEF works together with the households in the project development phase and provides a guarantee to the lending banks that the first 5% of the defaults will be covered by the fund. A guarantee fee is charged indirectly to the property owner for a loan repayment period of 5 years. 7. Kozloduy International Decommissioning Support Fund The Kozloduy International Decommissioning Support Fund was established by the European Bank for Regional Development in 2001 with the original intent to help the Bulgarian Government to decommission one of its unsafe nuclear power plant. The grant type of fund s secondary goal was to promote new end-consumer efficiency measures in the residential sector. 8. Subsidizing energy audits of public buildings

4 The support of energy audits of public buildings with status changed from 2012 is planned to be provided. The budget is expected to be 27 million BGN. These funds are planned to be gathered partially from restructuring existing support mechanisms. 9. National energy assistance programme, improving energy efficiency in the use of solid fuel by households The programme is expected to be launched after 2012 with a budget of 288 million BGN by 2020, to assist upgrading old boilers. The funding is expected to come from the next Operational Programme and the national allocations in relationship with the Operational Programme. 10. Soft loans for electricity in the households The programme is planned to be launched in 2012 to support the purchase of energy efficient heating and cooling and lighting systems and other energy efficient domestic appliances through a loan scheme with a 30% grant attached to it. The budget is estimated to be 540 million BGN by Green Investment Scheme (GIS) It is planed that if revenues are generated under the GIS those will be invested in energy efficiency and RES measures for the end users. The exact framework still needs to be developed. 12. EU Emission Trading Scheme (ETS) It is planed that after 2013 Bulgaria could use revenues generated from the EU ETS that still needs to be set up, to finance energy efficient and RES measures for the end users. 13. Promoting the use of individual Renewable Energy System The introduction of a support mechanism is planned after 2011 to support the installation of electricity production and heating/cooling from renewable energy sources.

5 HUNGARY 1. The Panel Programme The so called Panel Programme was running for years, however the intensity of it varies from year to year and there were years when the programme was not available. The highest amount ever allocated was 20 billion HUF/year (around 70 million euro) supporting around 2000 projects per year at its peak, with an average of 1250 projects/year. Only Property owners associations representing an entire building could apply for the grant and not individual flat or house owners. This by default created the large-scale effect as these panel block buildings vary from an average of 60 flats/building to buildings containing more than 300 flats. The rationale behind the programme was the achievement of an up to 29% CO2 emission reduction together with a reduction of the total energy consumption (26%), to be achieved by employing energy efficient technologies at a negative cost per investment. The reduction targeted and achieved varies greatly from project to project, from 10% to 60% in the best designed ones, with the majority being closer to the lower reduction. Technologies applied varied greatly from project to project with the majority employing heating system upgrading, insulation and windows, doors exchange or a combination of them. Among the RES the most often employed by far were the installation of solar panels for water heating. There were three types of financing provided under the programme: Type 1: The programme covering 33% of the needed investment, the rest had to be covered by the association of the property owners from their own savings or loans. Type 2: The programme covering 66% of the total investment (33% state + 33% local authority), and only 33% had to be provided by the association of property owners. This type of support was greatly depended on the financial situation of the local government; several of them could not participate in the programme. Type 3: Before its closure in 2009 the programme was reconstructed and brought under the Green Investment Scheme (GIS) umbrella. The programme lasted only for half a year, but it was a more improved version compared to the previous ones. One of the main difference was that energy certification used as a motivation for people to target higher energy efficiency standards. Under the programme 33% to 60% of the investment need was provided in form of

6 a grant (without the involvement of the local authorities), depending on the energy audit and energy certificate to be achieved (A++ receiving 60% support). Compared to the previous projects these ones achieved higher standards, but even so the majority aimed for the class B which received 48% grant. 2. NEP Programme national energy saving programme The NEP programme supported mostly small-scale projects (individual houses and flats) for all residential buildings built with other technology than the one covered by the Panel Programme. The programme covered from 15% to 30% of the total investment, for an average of small projects/year from around 2 billion HUF (7 million euro). The technologies applied were similar to the Panel programme but in a smaller scale. The programme in 2009 was moved under the GIS umbrella. 3. ÖKO Programme upgrading the district heating system The OKO programme was focusing on the improvement of the heating system by adding controlling/monitoring panels to the heating body, and insulating the pipes. The investment per home was about HUF (540 euro) from which 50% was funded by the state and 25% by the local authority (with the involvement of the district heating companies), 25% own share. Till the programme closing in 2009, all buildings supplied by district heating could apply. 4. GIS Climate Friendly Home Programme The GIS programme was introduced in January 2010 with the aim to provide support for non panel buildings. The budget for 2010 was 2 billion HUF (around 7 million euro), for the first half of 2011 was 1.6 billion HUF (about euro). The progarmme is very similar to the Type 3 of the Panel programme and favors high certification classes. In 2011 a new requirement was introduced based on which the projects funded had to achieve at least 3 category improvements under the energy classes and at least the class B. For building with an energy class C the refurbishment had to result in a category improvement of at least class A. The share of renewables from the final energy consumed had to be 25%. Subsidy intensity for refurbishment: - in case of a 50% reduction in energy consumption, 40% of the investment needed, but maximized at 3 million HUF ( euro)/dwelling - in case of a 60% reduction in energy consumption, 50% of the investment needed, but maximized at 4 million HUF ( euro)/dwelling Subsidy intensity for building energy efficient homes: - at a 35kwh/m2/year total energy consumption, the amount of HUF/m2 is awarded but maximized at 3 million HUF (9.000 euro)/dwelling

7 - at a 25kwh/m2/year total energy consumption, the amount of HUF/m2 is awarded but maximized at 5 million HUF ( euro)/dwelling 5. Guaranteed loans The Global Environmental Facility and the World Bank, followed by International Finance Corporation provided to several commercial banks loan guarantees for 16 million USD between 1995 and 2008, with the aim to support to support the lending market and to encourage lending towards energy efficiency projects. The guarantees covered the first loss on the portfolio and replaced the requirement that the property onwers association should provide a deposit to the bank when accessing loans for refurbishment without a mortgage guarantee. This mechanism helped the market to develop and made loans less expensive. With this type of guarantee property owners association were able to access more affordable loans to cover the own funds requirement of the Panel Programme for example. After the programme has ended some owners associations decided not to take up a loan of this magnitude since the banks again require deposits in advance of the credit. 6. Subsidized housing saving-account According to this programme state subsidy is awarded for individual property owners or property owners association linked to their savings. In the case of individual property owner, after the sum saved every year, a 30% state subsidy is awarded but maximized at HUF/year (260 euro). The saving together with the subsidy and interest earned can be used only for renovating the owners home (refurbishment for example). In the case of property owners association, a 30% subsidy is awarded for the yearly saving, but it is maximized at HUF (about 780 euro)/year. In order to receive the subsidy, there is no need to have a saving account period, but a guarantee needs to be deposited at the bank to access the loan. The guarantee can come from the saving account up to the 20% of the loan. The saving-account works very well for the individuals and property owners associations. But the scheme seems unable to replace the guarantee scheme when it comes to large-scale refurbishments. 7. Electricity-Efficient Household Programme The programme aims to decrease the energy demand of household appliances with a budget of 7.1 billion HUF for the period In 2010 the subsidy was available for electrical appliances under the GIS umbrella. This was followed by supporting the exchange of refrigerators/washing machines. An upgrading to an (A) labeled appliance was supported with HUF and of an appliance labeled (A+) (A++) with a maximum of HUF. The total amount of the subsidy was 1 billion HUF.

8 The lighting bulb upgrading sub programme under the GIS started in 2009, with a 230 million HUF budget and ended in 2010 with a 450 million HUF budget. The programme covered 100% of the expenses of the targeted groups of the elderly and large families. POLAND 1. Thermo-modernization Act One of the early measures applied in Poland to support the energy efficiency of the building sector was the Thermo-modernization Act from 1998, which provided financial support for building owners to reduce their energy consumption. A similar new law called Thermomodernization and Repairs Act has entered into force in 2009, amending the previous law and setting the frame for the financial support scheme and stakeholder groups benefiting from above mentioned fund. One of the main criteria s to apply for the Thermo-modernization and Repairs Fund was the preparation of an energy audit of the buildings and the verification of the accuracy and reliability of the energy audit. Parallel to this funding scheme, a bonus system was introduced for the multi-family houses in use since 1961, called repair bonus to support small repairments, and a compensation bonus to support social housing, buildings where some of the dwellings were/are used with social purposes. The Green Investment Scheme is the other main supporting scheme for increasing energy efficiency mostly for the public building sector. 2. Thermo-modernization Fund The Thermo-modernization Fund was planned to support the refurbishments of 2.4 million apartments ( projects) between 1999 and In the first years of its operation the fund proved not to be so successful due to the complicated application procedure and high interest rates. After a successful information dissemination campaign in 2003, the number of successful applicants has increased. In spite of this the fund is still criticized because it is not providing enough support to match the plans. During its operation around 50% of the number of projects planned was supported, which indeed provides some ground for the criticism. The Fund is managed by the National Economy Bank and has the reporting obligation about the volume and effectiveness of the energy efficiency refurbishment investments implemented with the co-financing provided by the Fund. The co-financing of the investments is in form of grant up to 25% of the loan for the refurbishment but cannot be higher than 16% of the total project cost. The grant is paid directly to the commercial bank which provides the loan. The loan can cover up to 80% of the total project investment cost, the remaining 20% has to be provided by the applicant from own resources. In case of a successful application and eligibility based on the energy audit, the total amount of financing adds up from 20% own funds, 64% commercial loans and 16% grant. 3. National Fund for Environmental Protection and Water Management

9 Revenues received from selling Assigned Amount Units (AAU) is supplying funds for energy efficiency and domestic green energy investments. This so called GIS fund is managed by the National Fund for Environmental Protection and Water Management. In 2010 a new grant scheme was introduced under the above programme, which targets the support of solar panels installation on buildings, supporting 40% of the investment in form of grant. The grant fund has a total budget of 75 million euro, and during 2010, 6.25 miliion euros were granted for households. During 2011 the fund has been closed for revision and improvement based on feedback received from the market actors. ROMANIA 1. National multi-annual programme for the thermal rehabilitation of the blocks of flats The thermal rehabilitation programme has started in 2005 and under the Ministry of Regional Development and Tourism supervision. The programmes aims improving the energy performance of multi-storey buildings and increase the quality of life of the inhabitants. The target buildings are blocks of flats built in the period. There are 1.2 millions of flats built within this period. Currently only 5% of the total number of flats have utilized the programme, and the intensity and uptake of the programme changes yearly. With the current practice, around 100 years would be needed for the refurbishment of the targeted building stock. The allocated sum for the year 2010 and 2011 was 150 million LEI ( euro)/year, from which 25% is utilized by the capital, the leftover by other bigger cities, where municipalities have financial means for the support. The contribution of the investment is shared between the state (ministry) for 50%, the local authority for 30% and the property owners association for 20%. If the property owners association cannot provide the 20% own share the local authority may cover this part as well, within the limits of the budget allocated for that specific year. The 20% covered by the property owners is divided among the owners based on the owned m2. As the 20% own funding is usually not available, based on the Gov. Decree 69/2010 subsidized interest loan can be taken by the associations to provide the 20% own share. 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. 2. The Green House Programme The Green House Programme was initiated in 2010 by the Ministry of Environment and Forestry. The targeted buildings are privately owned houses/buildings and the supported measures are updating or replacing the traditional fossil fuel based heating systems (heating

10 space and water). Measures include installations of solar thermal panels subsidies of up to LEI (1.400 euro), installations of heat pumps subsidies of up to LEI (1.900 euro) and heating from wood chips and vegetable waste (biomass) subsidies for up to LEI (1.400 euro). In million LEI was allocated to applicants, mostly for installing solar panels. According to current prices the subsidy can cover only 50% of the investment cost of solar panel installations of an average household of 4. The other half has to be covered by the owners own resources or loan. 3. Loan products The Gov. Decree 69/2010 allows two types of subsidizes loan products (interest rates covered). The first one is a Thermal rehabilitation loan for private individuals, the second one a Rehabilitation credit for apartment/property owners associations, for building built before The loan can last for up to 5 years, with a changing interest rate (currently 7.39%) According to the Gov. Decree 69/2010 the loan value for a private individual can be maximum 90% of the total investment costs but not exceeding euro equivalent in Lei, including VAT for a single family house. In the case of property owners associations the loan value can be maximum 90% of the total investment but not exceeding EUR/living room equivalent in lei, including VAT. 4. Subsidised housing saving-account The Subsidized housing saving account is used by property owners who plan ahead. Under this scheme a loan can be received after a 2-5 years saving for energy efficiency refurbishment. Besides benefiting from the own resource funds with an additional 2-3% interest rate gained, the schemes provides with a monthly bonus in top of the savings in the amount of maximum 250 euro/month. The interest rate and the bonus together amounts to 12.15% of the total investment. As both savings and loans are considered own funds, this amount can cover the 20% own fund requirement for the National multi-annual programme for the thermal rehabilitation of the blocks of flats and the 50% own fund requirement for private houses for the installations of solar panels in the Green house programme.

11 THE NETHERLANDS 1. The Green Funds Scheme The Green Fund Scheme was created by the Dutch government to provide support for projects that would be otherwise considered not feasible, but would have a direct positive impact on the environment under the sustainability umbrella. The fund has provided support for more than projects in the amount of 7 billion euros; several projects cover sustainable housing. The commercial banks are the so called green intermediaries and create the fund. The loans provided have a lower interest rate with 2% less than commercial loans. The lower interest rates are offset by a tax credit and a waiver of taxes on dividend and interest payments. The projects funded need to receive a green certificate from the Ministry of the Environment based on criteria of environmental benefit, low level of economic output, use of innovative technology and mechanism, etc. The certificate is valid up to 10 years. The Fund is covering to a less extent the building sector as the projects mainly focus on the non residential sector. 2. Temporary subsidy scheme Buildings and CO2 reduction (2006) The programme was launched in 2006 with 33 million euro budget which was utilized in a couple of months after which the programme has been closed. The projects supported were large scale projects with over 20 dwellings/project. 15% of the investment was granted but maximized to 1 million euro/project. Measures financed included: combined heat and power installations, heat pump boilers, solar thermal panels, insulation The scheme was incorporated in the More with Less programme. 3. Voluntary agreements social housing corporations ( ) The programme was initiated by the government in 1998 to support long-term voluntary agreements with the social housing corporations. A second agreement was signed in 2001( ). These agreements included several commitments by the social housing to improve their housing stock. The housing corporations committed to invest over 700 million euro on these improvements (from ) to achieve 15% reduction in energy consumption but unfortunately the reduction reached was only 5%. Under the new agreement energy performance recommendations were planned to be applied for 30% of the housing

12 stock and to utilize solar energy for 50% of the newly built houses, however the programme has not delivered the expectations. 4. Other closed programmes The environmental action plan of the energy distribution companies ( ), the energy efficient retrofitting programme ( ) and the energy premiums scheme ( ) out of which only the first one had a higher impact with some estimates calculating a 4.25 million ton of CO2 reduction in the households. The programme framework was constructed by the Association of energy distribution companies with each association member being responsible for achieving its own target. The funds were collected by adding an environmental levy on the bill, the maximum being 2.5 %. 5. TELI energy efficiency in low-income households Households with very low income (less than euro/month) cannot afford any type of investment in improving their homes. The TELI programme was introduced in 2002 by the Dutch government to tackle this specific problem.the scheme subsidized projects that were developed by local authorities, energy utilities and housing companies that provided low income households with energy audits and carried out the energy efficiency implementations. The demand was much higher than the available funding, usually much less was awarded than the applications would have asked for. 6. More with Less In January 2008 the Dutch government has signed a voluntary agreement called More with Less, with the social housing providers, utility companies and the construction industry to encourage all stakeholders to work together for increasing the energy efficiency of the building stock. The goal is to achieve a 100 additional PJ by 2020 energy savings, out of which 76 PJ is targeted to be achieved in the residential sector (43 PJ in owner occupied dwellings, 24 PJ in social housing units and 9 PJ on the private rental market). In 2009 the framework was updated as proved to produce less than planned. New incentives were introduced like the energy audits subsidy up to 200 euro/dwelling, changing of windows was subsidized with 20%, and tax benefits were offered on insulation measure (from 19% VAT to 6%). Installations of photovoltaic s, heat pumps and other RES are supported by reducing the loan interest with 2-3%. Those houses which reached a higher energy class following the energy efficiency improvements would get 300 euro and those achieving two classes improvement would get 750 euro.

13 7. Green mortgage The green mortgage is provided for energy efficiency improvements for dwellings that meet sustainability criteria. The green mortgage is a loan with an interest rate lower than 1% compared to the commercial loan and is given for a 10 year period. The loan is maximized at euro. 8. Energy Savings Credit Guarantee/Green Projects Scheme/National Mortgage Guarantee The support scheme offers a tax rebate and mortgage guarantee to encourage investments in energy savings. The Green Projects Scheme provides subsidy in a form of a tax rebate to encourage property owners to save and invest into energy efficiency. The Guarantee scheme is offered to property owners who take mortgage for energy efficiency improvements of their homes, and to protect them against potential default on mortgage loans. The guarantee scheme is available for mortgages up to EUR and was planned to run until 30 June Under the Saving scheme measures investments in energy saving can b co-financed up to a maximum of euro. The scheme has been changed and the benefits were reduced from 2.5% to 0% till 2014 both for the saver and the investor. The capital return tax exemption will continue.