Promoting Decisions to Upgrade the Energy Efficiency of Existing Buildings

Heating of buildings and hot water production are two major causes of energy consumption in Europe and account for a significant proportion of overall European CO2 emissions (between 25% and 30% of the total).

Technologies exist that can significantly reduce this energy consumption: thermal insulation of the buildings and local production of warm water using thermal solar panels. Thermal insulation of buildings has the potential to reduce the energy consumption by a factor of 8, from 300 kWh/m2.year (for an old apartment building with no specific insulation) to 40 kWh/m2.year (German KfW 40 standard). Thermal solar panels, coupled with an auxiliary, conventional heat source covering the times when the solar radiation is insufficient, reduces the energy consumption for warm water by an average of 40%. Thermal usage of solar energy has the following advantages: the yield is high (more than 30%) and the energy retrieved from the sun can be stored both easily and with a good yield, by simply storing hot water. This is in stark contrast with the current weaknesses of photovoltaic usage of solar energy.

The major area in which such technologies should be deployed is the installed base of existing buildings: new constructions every year only represent a fraction of that installed base, and many existing buildings, specifically in the city centres, are meant to stay for an undefined future, with no foreseeable plan for their destruction (and this makes great sense, for other reasons, related to the preservation of urban heritage).

These technologies are ready, available, and highly efficient. They can have a lasting and major effect on the reduction of CO2 emissions in Europe. They make great economic sense for the users of buildings, by significantly reducing their energy bills, that, in a time of « peak oil » and (hopefully) of carbon taxes, are bound for a long-term increase. Their implementation would create massive, non-delocatable employment, among those very low-qualified workers that are most vulnerable to economic downturn.

Their deployment is however inhibited by two factors: (1) financial means are necessary for the attached investment and (2) legal issues related to property rights multiply the hurdles for building owners to decide the investment.

Proposals

I propose therefore that a significant proportion (more than 30%) of the economic stimulus packages currently being implemented in Europe be dedicated to the financing of the renovation of existing buildings, in the direction of improved energy efficiency and insulation (reaching 100 kWh/m2.year) and of solar thermal energy production (for warm water production and, when the circumstances are favourable, for heating). This fraction of the economic stimulus packages may specifically be in the form of having the State / the European Union bearing the interest payments of loans (i.e. « zero-interest rates loans » as seen from the consumer) and guaranteeing them.

I also propose that the rules for the decision-making of such renovation works be modified in the following directions:

1. A simple majority of the households (or of the organisations) living (resp. working) in the building is sufficient for the decision to undertake the renovation works to be valid. Voting right in this decision-making is independent of whether the households (resp. the organisations) are owners or simple tenants of their residence (resp. their office). In other words, tenants have here the same decision-making rights as owners, and no unanimity is requested

2. When the decision to renovate the building is taken, an independent source is mobilised to estimate the expected yearly financial gain to be expected in terms of heating and warm water costs. This independent source may either be an engineer / architect with a specific training or publicly available databases and abacuses

3. For each such renovation project, a specific loan is set up, in which the owner(s) of the building are jointly responsible, and that is backed by the fraction of the yearly financial gain that is attributed to the owner (see below). This additional loan is not counted when considering the financial reliability of the building owners (e.g. it is not included in the liabilities that a bank would consider when deciding whether to attribute a new credit), and is guaranteed by the State / the European Union (as another component of the economic stimulus package)

4. This estimated yearly financial gain is split fairly (e.g. 50-50) between the user and the owner of the building. The fraction of this yearly financial gain due to the owner is dedicated to paying back the loan that was established for the renovation project. It is paid by the user(s) of the building (i.e. as a supplement to the rent). The fraction due to the user is simply the savings made in warm water and heating costs.

These latter rules are indeed a limitation to property rights as they are currently understood. However, precedents exist in which owners of buildings are forced to undertake works that they would not otherwise have done: in case of danger of collapse or for chimney sweeping, to prevent damage to others. The stakes of global warming are at larger scale than the building itself, but are no less urgent and large.

écologie;développement durable;ÉNERGIE