Financing for building renovations

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.

The EU’s total investment needs, to achieve the 2030 energy efficiency targets, including the building renovation objectives, are estimated at over €300 billion of investment per year, with an investment gap of at least €165 billion per year. 

Although public financing for energy efficiency has grown significantly for the period 2021-2027, a large share of the investments needed must be mobilised from private capital via an efficient use of public financial support.

The most important funding streams available on EU level for financing of building renovations are 

• European Structural and Investment Funds (ESIF)
• European Fund for Strategic Investments (EFSI)
• Horizon Europe
• Built4People
• ELENA facility
• InvestEU
• LIFE sub-programme for clean energy transition
• Social Climate Fund
• Cohesion Fund

For example, Cohesion Policy Funds have contributed to energy efficiency measures and investments with approximately €25 billion, of which around €17 billion for energy performance of buildings. The type of actions included investments in insulation and heat recovery, light optimisation and digitalisation of buildings’ systems. 

The Commission’s Renovation Wave strategy, adopted in 2020 under the European Green Deal, also has a strong financing component that aims to ensure that the investments needed are enabled at the necessary scale.

In December 2021, The Commission proposed to review the current framework within the revision of the Energy Performance of Buildings Directive (EPBD) and suggested to strengthen the long-term renovation strategies towards 'Building renovation plans'. These national plans should be submitted every 5 years, following the submission of a draft plan, and should have clear and specific chapters, based on a common template. 

The table below lists national websites and webpages providing guidance, advice and information about how to reduce the energy consumption of your house through renovation. They also explain the current rules and support measures for building renovation in EU and their respective country.

• 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)

• European Structural and Investment Funds
• European Fund for Strategic Investments
• Horizon 2020
• ELENA
• Amended Energy Performance of Buildings Directive EU/2018/844
• Energy Efficiency Directive EU/2018/2002
• Financial support for energy efficiency in buildings COM(2013)225
• Accompanying document on financial support for energy efficiency buildings SWD (2013) 143