Staying home: Financing the fight against energy poverty
What if the one place that should provide comfort – your home – instead results in poor health due to inadequate insulation or poor energy efficiency? For many Europeans, this is all too real. How can those that cannot afford home renovation and energy efficiency, do so?
As the world deals with the fallout of the COVID-19 pandemic, most of us are fighting the virus in the only tangible way we can: staying home. In the current situation, the value of homes and buildings to shelter from the storm have never been more critical. Millions of children are spending their days indoors, families are using their living spaces as workspaces, and almost all of us are grappling with changing or uncertain employment. On top of these new stresses, many Europeans have already been living in uncomfortable homes, suffering from health issues because of inadequate heating or cooling systems and at the same time, struggling to make rent every month.
Researchers estimate that between 50-160 million people fall into this category in Europe. The textbook term for this is “energy poverty,” and despite a common misconception that it is not felt in countries across Europe, it is undoubtedly the reality for too many, especially at a time like this.
Although there are many ways to overcome energy poverty issues and to protect vulnerable consumers, the most effective way for consumers to reduce their energy bills is by implementing energy saving measures. This lowers household energy bills and creates more efficient, liveable homes while offering jobs to the local community.
The magnitude of these quality of life issues has sparked actors in both the private and public sectors to realize that solutions lie in more investment in building refurbishment and renovations as well as in facilitating a just energy transition for all. As echoed in new policy such as the EU Green Deal, there is a mandate to involve and prioritize the households that spend twice as much as the average share of their income on energy and are burdened by large energy bills relative to wages or poor heating and building efficiency.
What is the solution?
Property Assessed Clean Energy (PACE) financing
PACE financing covers up to 100% of a project’s costs and is repaid as part of a property tax bill over a term of up to 20 years. It can be used to pay for energy efficiency, renewable energy, and water conservation upgrades to homes and buildings. Most importantly, the financing is attached to the property and not to the people living there, meaning it can be transferred upon sale of a home.
At Joule, we are proud to participate in the EuroPACE program, offering a pilot to residents of Olot, Spain, that gives them the opportunity to use innovative financing to upgrade their homes. Inspired by the success of PACE financing in the US, the program aims to build this mechanism to serve Europe.
The EuroPACE platform serves home-owners and communities by identifying and selecting which energy efficiency improvements to make, and when. It also assists users in finding contractors who will do the job well, on time and within budget, while delivering transparent, easy and secure long-term financing. The impact of this platform goes far beyond energy savings, with each Euro invested in building renovations providing both societal and economic benefits.
To learn more about the EuroPACE project and the importance of accessing finance for home renovation you can watch the webinar recording: “Fighting Energy Poverty: Affordable financing for sustainable home renovation”.
It is also important to underline that, in the longer-term, tackling energy poverty through increased building efficiency will help ensure resilience against shocks like COVID-19 as well as the strains that will stem from climate change.