Energy efficient building renovations can be expensive and owners may not have the means to finance them. Financial instruments provided by EU countries, the European Investment Bank (EIB) and the EU itself, can help solve this issue and address financial and investment gaps.
EU funding on building renovations
At EU level, several funding streams can be used for financing buildings renovations. Among the most important are the European Structural and Investment Funds (ESIF), the European Fund for Strategic Investments (EFSI), Horizon 2020, and the ELENA facility.
More specific financial instruments to support building renovations will also be developed between 2021 and 2027 under InvestEU. In addition, there is a new LIFE programme which has 4 sub-programmes, including one on clean energy transition.
The Commission's policy for financing energy efficiency has a strong focus on buildings, as illustrated by the Smart Finance for Smart Buildings initiative that was adopted as part of the Clean energy for all Europeans package. Building renovations, in particular for residential and public buildings, has regularly been addressed in the Sustainable Energy Investment Forums. These events aim to foster dialogue and exchange of best practice in developing investment projects and programmes in sustainable energy.
The Renovation wave strategy under the European Green Deal will have a strong financing component that aims to ensure that the investments needed are enabled at the necessary scale.
National support measures
EU countries provide a list of national measures for funding energy efficiency under the amending Energy Performance of Buildings Directive (2018/844/EU). They update these lists every 3 years. The lists can be found in their long-term renovation strategies.
Commission report on financial support
A 2013 report from the European Commission studied financial support for energy efficiency in the building sector and found that:
- the EU must improve financial support in the sector if it is to meet its 2020 energy efficiency target
- financial support mechanisms vary significantly across EU countries
- barriers, such as high initial costs, long payback periods and perceived credit risk hamper energy efficiency improvements in buildings
- so far, there is limited information on the effectiveness of currently available financial support mechanisms
- Amended Energy Performance of Buildings Directive EU/2018/844
- Energy Efficiency Directive EU/2018/2002
- Study: Accelerating energy renovation investments in buildings - financial and fiscal instruments across the EU, Joint Research Centre (2019)
- Study: Financing building energy renovations, Joint Research Centre (2014)
- Report: Financing of energy efficiency investments in buildings, Energy Efficiency Financial Institutions Group (November 2014)
- Technical guidance on financing the energy renovation of buildings with cohesion policy funding (February 2014)
- Financial support for energy efficiency in buildings COM(2013)225
- Accompanying document on financial support for energy efficiency buildings SWD (2013) 143
- Study: Local investments options in energy efficiency (November 2012)
- Energy efficiency investment potential for buildings (November 2012)