Financing building renovations

Energy performance renovations provide a host of benefits, but upfront costs can be a barrier. Financial support and instruments provided at both EU and national level can help bridge this gap and unlock needed investments.

EU funding

The EU’s total investment needs for energy efficiency are estimated at over €370 billion per year between 2021 and 2030.

After 2030, estimated energy efficiency investment needs remain high, at €303 billion for 2031-2040 and €288 billion for 2041-2050, to support decarbonisation and energy security objectives. 

The lion’s share of investment needs will go to building efficiency measures, including heating and cooling refurbishment, amounting to €242 billion per year from 2021 to 2030 to meet the 2030 energy efficiency targets. Most of the investments will focus on residential buildings, contributing to the availability of affordable and quality housing. 

The main funding streams available at EU level for financing building renovations include 

• The Recovery and Resilience Facility (RRF), including REPowerEU
• The Cohesion Policy funds
• The Social Climate Fund
• The ELENA facility
• The InvestEU Programme
• The LIFE sub-programme for clean energy transition (LIFE CET)
• Horizon Europe, including Built4People

The main sources of EU funding are the Recovery and Resilience Facility, with over €80 billion, and the Cohesion Policy Funds, with around €17 billion for the energy performance of buildings between 2021 and 2027.

The Social Climate Fund will provide EU countries with dedicated funding to support structural measures and investments for energy efficiency and renovation of buildings, clean heating and cooling, renewable energy integration, and zero- or low-emission mobility solutions.

National funding and contacts

The revised Energy Performance of Buildings Directive (EPBD) will make it easier to access relevant data and use common metrics and instruments, such as energy performance certificates (EPCs), national databases on energy performance of buildings to be set up by May 2026, and the transfer of national data to the EU Building Stock Observatory.

The table below lists national websites and webpages providing guidance, advice and information on how to reduce your home’s energy consumption through renovation. They also explain the current rules and support measures for building renovation in the EU and in the respective countries.

Financing framework

Although public financing for renovation has grown significantly since 2021, more than 80% of the investments needed must be mobilised from private capital, including from the lending market, specialised companies and building owners. Efficient use of public financial support can help leverage private investment through mechanisms such as soft loans, guarantees, technical assistance or blended solutions.

National Building Renovation Plans introduced by the revised EPBD are a powerful instrument to develop a forward-looking, transparent and stable financing framework. They help allocate public funding optimally, channel private and public investment into the necessary transformation, and establish predictable renovation pipelines that give confidence to investors, SMEs and the construction sector. In their plans, EU countries must focus on renovating the worst-performing buildings and ensure financial support and technical assistance for vulnerable households, so that no one is left behind in the shift to a decarbonised building stock.

Lending from financial institutions is a key pillar of the financing framework for building renovation. Under the EPBD, the Commission has been developing criteria for a framework that supports banks in providing tailor-made products and services to building owners. The Commission has benefited from the expertise and involvement of financial institutions that are members of the European Energy Efficiency Financing Coalition, and in particular its dedicated working group on real estate.