Periodic Reporting for period 2 - EuroPACE (Developing, piloting and standardising on-tax financing for residential energy efficiency retrofits in European cities)
Periodo di rendicontazione: 2019-09-01 al 2021-08-31
The EuroPACE project developed a scalable home renovation model that combines affordable home-based financing, technical assistance and smart funding to unlock the huge potential for deployment of energy saving and generation technologies to European households. The project contributed to overcoming major barriers to investment in energy efficiency projects, by providing affordable, long-term, up-front financing and technical support along the way to homeowners.
The overall objective for EuroPACE was to develop a scalable energy efficiency home renovation program combining home-based financing and technical assistance, thus stimulating consumer demand and investor appetite. The EuroPACE project pursued the following interrelated goals:
• Assess EuroPACE readiness in the EU 28 (WP2);
• Launch the first pilot program in the city of Olot (WP3 and WP4);
• Replicate the EuroPACE model to other Leader cities and Regions (WP5 and WP6).
The overall objective for EuroPACE was to develop a scalable energy efficiency home renovation program combining home-based financing and technical assistance, thus stimulating consumer demand and investor appetite. The EuroPACE project pursued the following interrelated goals:
• Assess EuroPACE readiness in the EU 28 (WP2);
• Launch the first pilot program in the city of Olot (WP3 and WP4);
• Replicate the EuroPACE model to other Leader cities and Regions (WP5 and WP6).
By October 2019, two key Work Packages (WPs) have been completed, namely WP2 and WP3, while other WPs are well underway. WP2 identified which of the EU28 countries have the most suitable legal/fiscal set up and the highest potential demand for EuroPACE implementation. Two reports have been created (D2.1 and D2.2) comparing the countries with respect to their property-related taxes and charges, possibility to introduce an on-tax/ home-based financing mechanism, legislative capacity of the local governments to put in place new legislation to enable this financing tool. The comprehensive analysis identified a roadmap for EuroPACE adoption in EU28 countries and selected seven EU countries (Austria, Belgium, Italy, the Netherlands, Poland, Portugal, Romania) for further analysis. Based on this, we examined the social and economic conditions of households, social preferences and environmental views of homeowners, as well as level and type of energy used, retrofit programs and incentives that could integrate or blend with EuroPACE. This led us to choose the top four countries, namely Belgium, the Netherlands, Portugal and Spain, where the implementation of EuroPACE is mostly feasible.
One of the key elements in the program set up was establishing the suitable legal framework for the managing entity and the underlying financing mechanism. Since the start of the project, OLO and GNE teams have been working on the Law amendment by the Spanish Parliament providing legal framework for home-based financing in Spain. This specific task ended up resulting in a titanic legal development and lobbying effort. Furthermore, given the political volatility in Spain (4 national elections in the last 4 years or the Catalan independence referendum), it required a massive effort in dealing with all sorts of stakeholders (political parties, industry associations, NGOs, local and regional government representatives, public institutions,…) to build consensus and bring all the relevant stakeholders together around the EuroPACE initiative to support the bill amendment.
As a result, the project’s partners developed a commercially viable home renovation program model. The model was rooted in the concept of public-private partnership, where both sectors join forces to set up a customer-centric renovation service to boost the renovation wave across Europe. Such public-private partnership was realized by setting up program entities able to channel public and private funds, proactively seek renovation projects, verify contractors and ensure high quality of work. The innovation lies in setting up a scalable and economically self-sustainable home renovation service that is attractive and affordable to all European citizens.
Building on the EuroPACE renovation formula, the project proceeded with practical implementation by designing and setting up a renovation program serving citizens. Historically, the home renovation process has been time-consuming and involved a lot of paperwork that had to be produced by contractors, lenders, homeowners, local compliance agencies and architects. This was a deterring factor for homeowners, who felt unsupported throughout their renovation journey and intimidated by the many technical and administrative tasks that come into play in a renovation project. The EuroPACE project, via its pilot program, simplified and digitalised the entire process. On the financing side, GNE Finance is the trusted lender and the company handles the underwriting and loan servicing. The process is digitized; it relies on the new technologies and was aligned with consumer behaviour.
One of the key elements in the program set up was establishing the suitable legal framework for the managing entity and the underlying financing mechanism. Since the start of the project, OLO and GNE teams have been working on the Law amendment by the Spanish Parliament providing legal framework for home-based financing in Spain. This specific task ended up resulting in a titanic legal development and lobbying effort. Furthermore, given the political volatility in Spain (4 national elections in the last 4 years or the Catalan independence referendum), it required a massive effort in dealing with all sorts of stakeholders (political parties, industry associations, NGOs, local and regional government representatives, public institutions,…) to build consensus and bring all the relevant stakeholders together around the EuroPACE initiative to support the bill amendment.
As a result, the project’s partners developed a commercially viable home renovation program model. The model was rooted in the concept of public-private partnership, where both sectors join forces to set up a customer-centric renovation service to boost the renovation wave across Europe. Such public-private partnership was realized by setting up program entities able to channel public and private funds, proactively seek renovation projects, verify contractors and ensure high quality of work. The innovation lies in setting up a scalable and economically self-sustainable home renovation service that is attractive and affordable to all European citizens.
Building on the EuroPACE renovation formula, the project proceeded with practical implementation by designing and setting up a renovation program serving citizens. Historically, the home renovation process has been time-consuming and involved a lot of paperwork that had to be produced by contractors, lenders, homeowners, local compliance agencies and architects. This was a deterring factor for homeowners, who felt unsupported throughout their renovation journey and intimidated by the many technical and administrative tasks that come into play in a renovation project. The EuroPACE project, via its pilot program, simplified and digitalised the entire process. On the financing side, GNE Finance is the trusted lender and the company handles the underwriting and loan servicing. The process is digitized; it relies on the new technologies and was aligned with consumer behaviour.
EuroPACE is uniquely positioned to boost energy efficiency investment in existing buildings, ranging from homes to offices, hotels, multi-family and mixed-use properties. The impact of EuroPACE platform goes far beyond energy savings and each Euro invested in building renovations results in societal and economic benefits, including job creation and climate change abatement. EuroPACE contributes to the creation of resilient and vibrant communities that enjoy economic growth and healthy environments.
EuroPACE financing is used to collect the repayment for money that was lent for investments in building improvements that meet a ‘valid public purpose’, e.g. save or produce energy. Typically, investors lend money for deep retrofits up-front and then get repaid regularly through an additional charge added to the property. EuroPACE offers local residents an opportunity to use an innovative financing instrument to upgrade their properties.
The EuroPACE project created strong interest from cities and regions in Europe for future replication of the EuroPACE model. Currently, GNE is in conversations with public authorities from Belgium, The Netherlands, Portugal, and Spain (WP6).
Overall, EuroPACE project faced a strong set-back with the bill amendment, but managed to come up with an alternative to prove home-based financing possible. Since efforts on WP2 were able to proceed as planned, the Consortium was able to identify candidate countries and cities for replication and therefore catch up on WP6 (replication in other European Cities). Likewise, the communication and dissemination efforts (WP5) were beyond successful, which also fuelled city candidates towards WP6. WP4, particularly pilot commercial implementation (HolaDomus program), will be the main focus during the second part of the project. After the commercial launch in early October, everything is in place for a successful home-based financing program for massive energy efficiency home retrofitting.
EuroPACE financing is used to collect the repayment for money that was lent for investments in building improvements that meet a ‘valid public purpose’, e.g. save or produce energy. Typically, investors lend money for deep retrofits up-front and then get repaid regularly through an additional charge added to the property. EuroPACE offers local residents an opportunity to use an innovative financing instrument to upgrade their properties.
The EuroPACE project created strong interest from cities and regions in Europe for future replication of the EuroPACE model. Currently, GNE is in conversations with public authorities from Belgium, The Netherlands, Portugal, and Spain (WP6).
Overall, EuroPACE project faced a strong set-back with the bill amendment, but managed to come up with an alternative to prove home-based financing possible. Since efforts on WP2 were able to proceed as planned, the Consortium was able to identify candidate countries and cities for replication and therefore catch up on WP6 (replication in other European Cities). Likewise, the communication and dissemination efforts (WP5) were beyond successful, which also fuelled city candidates towards WP6. WP4, particularly pilot commercial implementation (HolaDomus program), will be the main focus during the second part of the project. After the commercial launch in early October, everything is in place for a successful home-based financing program for massive energy efficiency home retrofitting.