Analysis of sectors, tenure & regions

In this section, an inventory is made of the main barriers in various sectors of the building market, taking into account differences in the tenure situation of buildings. This analysis is based on the results of an expert workshop conducted on 17 May 2006. Barriers to investment in building energy efficiency improvements have not been widely researched, and a good overview of the key barriers in the various sectors is still lacking.

By analysing the results of the expert workshop, as well as the (scarce) data available, an overview was obtained of some of the key barriers. These were linked to promising instruments indentified to tackle these barriers, and thereby endorse investments in building energy efficiency, using the prototype instruments presented in the previous section. Because of the expected differences in barriers in the various tenure situations, the analysis, presented in the following tables, differentiates between sectors and tenure situations. A brief description of regional differences, presumed to be of lesser importance, is also subsequently given. The numbers refer to the fact sheets (see Annex A), which provide more information on this type of programme in practice.

Barriers and instruments for new buildings

Key barrier(s)

Promising instrument(s)

Suggested policy packages

Residential buildings


Owneroccupied	Lack of professional advice / limited offers Lack of specific knowledge / knowledge of alternatives Lack of upfront money	Preferential loans [7] and Regulatory benefits for abovestandard energy performance, e.g. added density allowance [2] Demonstration projects [19] and Organisational support [8, 23] or alternatively Mandatory environmental performance evaluation with minimum requirement [3, 20]	Preferential loans for significant energy performance improvements combined with energy audits with organisational support Mandatory performance evaluations combined with regulatory benefits for abovestandard performance

Private rental	Lack of upfront money Lack of specific knowledge / knowledge of alternatives Lack of market demand Capture of benefits	Regulatory benefits for abovestandard energy performance, e.g. added density allowance [2] and Tax credits for installing energy-saving products [11] Organisational support [8, 23] or alternatively Mandatory environmental performance evaluation with minimum requirements [3, 20]	Mandatory performance evaluations combined with regulatory benefits for abovestandard performance Tax credits for installing energy-saving products combined with energy audits with organisational support

Social rental	Capture of benefits Implications for low-income households	Regulatory benefits for abovestandard energy performance, e.g. added density allowance [2] and Tax credits for installing energy-saving products [11] or alternatively Mandatory environmental performance evaluation with minimum requirement [3, 20]	Mandatory performance evaluations combined with regulatory benefits for abovestandard performance

Commercial buildings


Owneroccupied	Lack of professional advice / limited offers Lack of specific knowledge / knowledge of alternatives Requirement of very short payback times	Regulatory benefits for abovestandard energy performance, e.g. added density allowance [2] and Voluntary energy conservation agreements [21] Tax credits for installing energy-saving products [11] or alternatively Mandatory environmental performance evaluation with minimum requirement [3, 20]	Mandatory performance evaluations combined with regulatory benefits for abovestandard performance Tax credits for installing energy-saving products combined with energy conservation agreements

Private rental	Investments can lead to uncompetitive rents Requirement of very short payback times Capture of benefits Lack of market demand Lack of obligations	Regulatory benefits for abovestandard energy performance, e.g. added density allowance [2] and Voluntary energy conservation agreements [21] Tax credits for installing energy-saving products [11] In some cases independent building energy performance assessments for investors [22] or alternatively Mandatory environmental performance evaluation with minimum requirement [3, 20]	Tax credits for installing energy-saving products combined with energy conservation agreements

Public buildings


Owneroccupied	Lack of public acceptance Lack of specific knowledge / knowledge of alternatives Lack of obligations	Above-standard requirements for government buildings [5]	Above-standard requirements for government buildings combined with energy audits with organisational support

Barriers and instruments for existing buildings

Key barrier(s)

Promising instrument(s)

Suggested policy packages

Residential buildings

Owneroccupied	Lack of professional advice and support / limited offers / complicated procedure Lack of specific knowledge / knowledge of alternatives Lack of obligations Lack of organisation of homeowners/complex decision making process	Preferential loans (perhaps in combination with the EPBD energy certificates) [7] and Tax credits for installing energysaving products [10, 11] Utility obligations [16] Energy performance advice [25] Organisational support like Chance Energiepass Partner concept [24] Homeowner associations [26] Demonstration projects [19] and perhaps	Preferential loans for significant energy performance improvements combined with energy audits with organisational support Energy upgrading requirements combined with energy audits with organisational support Tax rebates and VAT reduction are not seen as being beneficial
Private rental	Lack of market demand Capture of benefits Lack of obligations Lack of upfront money Lack of specific knowledge / knowledge of alternatives	Preferential loans (perhaps in combination with the EPBD energy certificates) [7] and Tax credits for installing energy-saving products [10, 11] Utility obligations [16 Tax credits as in Green Landlord Scheme [14], Organisational support like Chance Energiepass Partner Concept [24] Demonstration projects [19] and perhaps Energy regulations for the existing stock [6]	Energy upgrading requirements combined with energy audits with organisational support Tax credits for installing energy-saving products (for landlords) combined with energy audits with organisational support

Social rental	Lack of obligations Capture of benefits Implications for low-income households	Energy regulations for the existing stock [6] and Energy Audits [18, 25] Reduced VAT for energy-saving materials and installations [11] Utility obligations [16]	Energy upgrading requirements combined with energy audits with organisational support Obligations for the public authorities to set example in terms of finance schemes

Commercial buildings


Owneroccupied	Lack of professional advice / limited offers Requirement of very short payback times Lack of obligations and focus	Energy regulations for the existing stock [6] and Tax credits for installing energy-saving products [11] Preferential loans [17] Voluntary energy conservation agreements [21] Demonstration projects [19]	Energy upgrading requirements Tax credits for installing energy-saving products combined with energy conservation agreements

Private rental	Lack of professional advice / limited offers Requirement of very short payback times Lack of market demand/Fear of uncompetitive rents Capture of benefits Lack of obligations	Energy regulations for the existing stock [6] and Tax credits for installing energy-saving products [11] Voluntary agreements [21] Demonstration projects [19]	Energy upgrading requirements Tax credits for installing energy-saving products combined with energy conservation agreements

Public buildings


Owneroccupied	Lack of public acceptance Lack of specific knowledge / knowledge of alternatives Lack of obligations	Above-standard requirements for government buildings [5] and Energy Service contracts [27]	Above-standard requirements for government buildings combined with energy performance contracting

Regional differences in barriers and instruments

Differences between various regions in Europe in key barriers and potential instruments to endorse building
energy efficiency appear to be smaller than differences between sectors and tenure situations in the building
market. There are, however, some differences between parts of Europe that need to be considered.

For this quick scan, differences between the northwestern part of Europe, with its long tradition in energy efficiency, the southern part of Europe, with a somewhat shorter tradition, and the new Member States, with their specific background were taken into account. This does not do justice to the many differences between countries, and even within countries, that need to be addressed when designing a programme, but it does provide an overview of some core aspects.

The financing of building energy efficiency improvements is a key barrier in all of Europe, but this barrier has some different characteristics in different regions. In northwestern europe, the issue is much more the lack of available cash and financial arrangements for the investment, than the cost of the investment itself. In Central Europe, the lack of financing is much more serious, involving amounts that may seem low by Western European standards, but could represent more than a year’s average salary. Although both
warrant attention with respect to the financial mechanisms, the type and scope of the mechanism needs to be adapted to the regional context.

Awareness of energy efficiency appears to be greater in northwestern Europe than in southern and central regions. In northwestern Europe, there is a general awareness of building energy efficiency issues, but the problem, especially in the owner-occupied and private rental residential sectors, is that the procedure is considered to be complicated. This is also prominent in other regions, but there also general awareness about the need to save energy must be raised.

A last issue is the difference in the tenure situation of residential buildings in particular. The situation varies
from country to country, but one very relevant difference is in the typical ownership of flats in high-rise buildings. In northwestern and southern regions of Europe, these tend to be largely owned by social housing organisations and professional landlords. In Central Europe, most flats are owner-occupied, requiring more attention for organisational aspects.