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Residential Building Energy Renovations with On-Bill Financing

Periodic Reporting for period 1 - Ren-on-Bill (Residential Building Energy Renovations with On-Bill Financing)

Período documentado: 2019-05-01 hasta 2020-10-31

In order to meet the 2050 long-term target for reducing EU GHG emissions by 80%, it is necessary to dramatically increase the yearly building renovation rate from the current 0.4%-1.2% to at least 2.3%. Meeting this objective requires the utilisation of massive resources involving financial institutions that, due to their unfamiliarity with the technical aspects of energy saving solutions, the small average size of these investments and the difficulties in attributing energy savings to their respective impact on cash flows, may be reluctant to get involved.
On-bill schemes (OBS) offer a way of financing energy renovations that utilise utility bills as repayment vehicle. On-bill schemes have been in use for more than 30 years, particularly in the USA and Canada, where it significantly drives the building renovation market. In Europe, few attempts have been made, but the potential for on-bill schemes in Europe remains significant.
The introduction of energy efficiency on-bill schemes can deliver significant benefits for a wide variety of participants: building tenants, utilities, financial agents, renovation companies, ESCOs and ultimately all the end-users of the energy system, including individual consumers and the society as a whole.
RenOnBill’s overall objective is to scale up investments towards deep energy renovations of residential buildings by promoting the development and implementation of on-bill schemes, based on the cooperation between energy utilities and financial institutions. In particular, the project will:
• Analyse and define the residential building market context to enable replication of suitable on-bill schemes across Europe;
• Engage key stakeholders through national stakeholder platforms;
• Develop tools to address the residential sector’s energy renovation financing demand and assess and bundle investments based on a transparent methodology;
• Develop and implement business models in the three RenOnBill partner utilities through the development of pilot on-bill schemes;
• Utilise RenOnBill results and insights gained to support and disseminate EU-wide knowledge on OBS.
The first steps of the project were oriented to research the framework conditions, the barriers and the existing examples of on-bill schemes across Europe and beyond. As a result, three main reports have been concluded: “Overview of on-bill buildings energy renovation schemes”, “Upscaling the residential sector with on-bill schemes - Replicability potential in the EU” and “The residential building renovation market in Germany, Italy, Lithuania and Spain”. With these three reports completed, the identification of on-bill schemes suitable for successful replication has been successfully achieved.
During the first year of the project, national stakeholder platforms in the four focus countries (involving energy utilities, financial institutions, ESCOs and installers, homeowners and tenants and policy makers) have been set up. Stakeholders have been actively involved in several project activities: a total of 46 stakeholders were interviewed and a selected group participated in four national prototyping workshops.
One of the milestones of this project has been achieved with the release of the Microsoft Excel based ERV-Tool. The tool has been designed to estimate the energy and the economic returns of the renovation measures providing an overall projection of the financial risks through statistic methods. Currently a server-based version is being developed.
Partner utilities have been working on the development of their strategies to set up on-bill offers (reflecting on the national market frameworks, the selection of the preferred business model, the criteria for customer segmentation and the identification of strategic partners among other key aspects). In parallel, Creara is leading the development of the on-bill schemes utility business model guidelines. These two tasks, which are at an advanced stage, constitute the basis for the strategic development of pilot on-bill schemes.
All this work has been accompanied by an active dissemination and communication strategy. RenOnBill was presented at 14 events both at EU and national level amounting to a total of around 3000 participants. Two dissemination webinars were held in the last 18 months and a policy briefing linking RenOnBill to the EU Green Deal and the Renovation Wave is being published by March 2021.
The project can positively impact on utilities, financial agents and other energy efficiency market players and on the society as a whole.
Each of the utilities participating in the RenOnBill consortium will be enabled to develop pilot on-bill schemes providing building renovation solutions to their residential customer base.
Moreover, RenonBill will enable all utilities participating in its stakeholder engagement activities to develop pipelines of energy efficiency on-bill investments in the residential sector, acting as aggregators. This relies in the development of suitable offers towards households, accomplished through the identification of replicable on-bill schemes and the development of utility business models to finance energy renovation.
On the one hand, the “Upscaling the residential sector with on-bill schemes - Replicability potential in the EU” report (which has been already published) contains the identification on different business models for on-bill services, and a replicability analysis. On the other, the “On-bill schemes utility business model development guidelines” (which will be published during summer 2021) will provide a practical approach towards analysing the market framework and the utility’s own strategy constraints, as well as an in-depth explanation of business models, both meant to guide utilities interested to launch on-bill offers.
The potential of the project to set up a large-scale pipeline of on-bill renovation projects has been proven by the interest of utilities that were initially contacted through the national platforms, and of those that have already participated in several project activities such as interviews and prototyping workshops.
Representation of the standard on-bill scheme (Value Flow Methodology)