Many home owners are not in the position to qualify for a loan to retrofit their home. Others are not willing to invest their savings in retrofitting and improving their home. The result is that deep refurbishments of private homes has not taken off, in any of the European member states, at the desired speed. With the RESETTLE! project we aim to resolve this impasse by the creation of (1) new ‘retrofit as a service’ instruments and (2) investments funds that provide funds to HOA’s and other private home owners for these ‘retrofit as a service’ models.
The idea
The idea behind our approach is simple. Energy costs are a large part of monthly housing expenses for home owners. A deep refurbishment results in a much lower energy bill. The savings are allocated to the retrofit budget. The required retrofit measures will be financed through ‘retrofit as a service’ instrument. When the house is sold, the successive owner will take on remainder of retrofit service contract and the monthly payments that are connected to this contract .
This is a revolutionary view on financing the retrofitting of property.
Build on successful cost neutral pilot
In 2018 Economic Board Utrecht and Climate Mission launched a successful pilot to retrofit apartments of HOA’s based on a 30-year object-related loan. For the apartment owners this was cost neutral. This pilot helped improve living conditions and enabling deep retrofits based on a 30 year loan with the Dutch Nationaal Energiebespaarfonds NEF (National Energy Saving fund).
With RESETTLE! we have analysed ways to upscale this fund further and also to expand the NEF idea to other European member states. We have created a Pan-European fund concept that can be used to fund NEF like structures in other European member states. We have identified opportunities for NEF like structures in both Latvia and Belgium and appetite to develop large scale renovation projects is growing across the European Union. Importantly, rules and regulations in many other European member states permit similar NEF like structures there.
There are still barriers to overcome – The Dutch NEF is supported by a substantial first loss facility provided by the national government. This guarantee has the benefit of allowing the NEF to secure finance at low rates for deployment into home renovation. Similar guarantees, or credit enhancement tools are likely to be required at this point in time, however appetite from national governments to provide this form of support is generally low. Other identified source of guarantee money, Invest-EU, could help start the NEF like fund in fund structure throughout Europe.
Also good progress has been made in the creation of a ‘retrofit as a service’ instrument that could make retrofitting attractive for other home owners. A scalable and replicable structure has been developed. Support on a national level from the ministry of economical affairs and De Bouwagenda has been secured to follow up on this.
Both instruments hold the promises of making retrofit attractive for home owners. By doing so a huge retrofit market would be created making this interesting for financers and building companies.
However, commitment on national and European level is needed to help develop these instruments further and make sure that these new instruments are attractive enough for companies to invest in it. Initiatives like Invest-EU and the Renovation wave show that the intentions are there. We are ready to present our solutions and make retrofit attractive!
Position paper
Download the position paper about targeting the right context for building-related sustainability services:
RESETTLE! is a unique partnership of public organisations, entrepreneurs, bankers, insurers, investors, and fund managers whose aim is to enable the retrofitting of 1 million homes! The Economic Board Utrecht is project lead and partners are Achmea, BPIE, Bankers without Boundaries, Futureproofed and Klimaatmissie Nederland. The project is supported and has received funding from Climate KIC EIT.
