5 May 2010: Energy efficient homes

This week, I attended a conference in Brussels organised by the King Baudouin Foundation. It was about how to control climate change while also increasing social justice. Therefore, the issue of making existing homes more energy efficient was central to the discussion. Too much of the general political and media discussion is about making new buildings efficient. This must be done, but is nowhere near enough, as most of the buildings that will be standing in 2050 have already been built. These need to be upgraded, using regulations, loans and grants. This will protect the climate, increase comfort and happiness, and improve health.

Some European countries are using building regulations for existing homes. In Germany, since 2007, where a major refurbishment is carried out (that is, where more than 20% of the building is refurbished), the energy consumption of the refurbished building must be 30% less than that of a comparable new building. In Spain, all renovated (and new) buildings have to install solar power systems capable, at a minimum, of heating water. In Sweden, buildings have to meet energy efficiency standards when constructed, sold or rented out (rental since January 2009). The King Baudouin Foundation has produced a report that recommends going even further – all existing buildings should be required to meet efficiency standards, whether or not they are being refurbished, sold or rented out. This is an excellent proposal and Belgium has the Presidency of the EU in the second half of this year. However, the proposal has little chance of being accepted by the member states. They will argue that this should be up to national governments, not the EU, to decide.

Regulation is only one part of the necessary package. To make significant progress, money is also required. Grants and low-interest loans are essential to attract widespread interest if programmes are voluntary, and essential to protect low-income groups if they become mandatory. Again, Germany has been progressive. Low interest loans for energy efficiency retrofitting of existing domestic buildings are available. Since 1990 the KfW bank, owned by the Federal Government (80%) and Laender (20%), has offered loans under its Housing Modernisation Programme. From 2001, loans for energy-related improvement work were introduced in the KfW CO2 Building Rehabilitation Programme. In 2006, funds almost tripled to around €1 billion a year and a further €500 million a year was added in 2008. In April 2009, the Housing Modernisation Programme and the CO2 Building Rehabilitation Programme were combined into Energy Efficient Retrofit. The Programme is funded by KfW, but carried out by local banks.

Loans for work on energy efficiency, CHP and renewables are available to:

  • Owner-occupiers.
  • Landlords.
  • Housing companies.
  • Housing cooperatives.
  • Local government.

Since 2007, grants for owners of one and two-family houses, non-profit organisations and local authorities have also been available. As a result of these measures, 1.5 million homes have been substantially improved since 1990. Some of these have reduced energy use by 80%. This is impressive. However, such super-efficient upgrades are not cheap and setting the standards too high means that only a small percentage of properties will be covered. There are over 40 million homes in Germany, so 1.5 million is only around 3.75%. It is not sensible to set standards too low, but nor is it sensible to set them too high.

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