Deep retrofit financing and quality assurance – feedback from an international policy maker workshop

28 policymakers from all over the world were brought together to meet and discuss retrofitting solutions, with a focus on financing and quality assurance, as part of the SINFONIA project during the 22nd International Passive House conference in Munich.
With speakers and attendants from a variety of backgrounds including the UNECE, GIZ, IPEEC, EASME as well as financial institutions, the session was well equipped to excite lively debate on the best incentives and implementation options for highly energy efficient buildings towards smart cities.

Presentations by representatives from the Bolzano and Innsbruck Sinfonia Demonstration Cities were complemented by speeches describing achievements in the building and policy sectors.

EuroPACE was presented, an integrated building improvement platform for Europe, a project currently funded by the EU. It aims to make home renovation projects easier for all by offering investors secure, scalable returns and technical assistance combined with 100 % financing for up to 20 years, attached to the property and not the person – meaning it can transfer on sale. The programme helps find and train the labour force required and makes deep retrofits more attainable with the long payback period. PACE financing was developed in the US and with the support of the EU, it is now in Europe. Overall this was seen as an innovative, if not unfamiliar approach to financing retrofitting projects, which can often be difficult to finance using existing financing approaches due to lack of knowledge and risk aversion in the financial sector, limited funding options and limited capacity in the building sector.

The panel discussion led to an interesting dialogue on the incentives needed to achieve highly energy efficient retrofits. Topics covered included quality assurance, funding security and capacity building. Stressing the significance of consistent funding programmes, it was highlighted that when funding is only available to projects that meet the strict energy efficiency requirements, such as the one offered in the German State of Hesse, this incentivised the private sector to complete the retrofit properly.

workshop-for-policy-makers
at the workshop for policy makers

The barriers to success in developing economies were also discussed, noting that limited contractor knowledge and training is often a barrier to achieving better building standards. It was noted that this is not necessarily only a barrier for developing economies and the panel concluded by saying that aiming high is important but making sure that the capacity building and funding options are available is key to achieving ambitious goals.

The workshop displayed the group’s optimism that retrofits can be completed to a high level if the proper incentives are in place and monitored for their effects and progress. Often policy does not go far enough to ensure that only the highest quality energy efficient retrofits are being promoted and funded, although tried and tested retrofitting solutions such as those presented on the day already exist.

A topic brought up was that some funding can inadvertently undermine what it has set out to achieve. Consistency is key in retrofitting policy – implementing long-term financing and quality assurance strategies must continue past individual administrations and be carefully administered so as not to undo or contradict existing policy or financing measures. EASME has started the ‘Smart Finance for Smart Buildings initiative,’ initiative, which aims to improve the investment climate for energy efficiency by deploying financial instruments and flexible energy efficiency and renewable financing platforms, supporting the project pipeline at EU and local level, offering Project Development Assistance facilities and de-risking the Energy Efficiency Platform. All in all, the group wished to collaborate and exchange data and project results on policies that were successful as well as unsuccessful to avoid unknowingly replicating programmes that failed elsewhere and being unsuccessful in their own attempt. Therefore, the main accomplishment of the session was to improve international awareness, partnerships and collaboration.

Lessons learnt:

Aiming high is important but making sure that the capacity building and funding options are available is key to achieving ambitious goals. Limited contractor knowledge and training is often a barrier to achieving better building standards.

When funding is only available to projects that meet the strict energy efficiency requirements, such as the one offered in the German State of Hesse, this incentivised the private sector to complete the retrofit properly. International awareness, partnerships and collaboration need to be improved in this context.

The full report of the policy maker workshop can be downloaded here.

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