Why so slow if so effective

The Save the Homes consortium spent three and a half years working with families in Rotterdam and Valencia to renovate their homes. The project, coordinated by Ana Tisov, field expert in built environment at the University of Ljubljana, assessed around 1,600 households in Valencia and helped complete renovations on 33 homes in Rotterdam. The result: after insulation and the installation of rooftop solar panels, households achieved average energy savings of 50% to 60%. When the project wrapped up in February 2024, Tisov had a clear verdict. “We really have to increase renovations,” she told EU research magazine Horizon. Member states had until the end of May to transpose the EU Energy Performance of Buildings Directive into their national laws – and 19 of them still haven't done. This directive, adopted in 2024, aims to improve energy efficiency in homes and significantly cut emissions from heating. To meet the directive’s targets, experts estimate that the annual energy renovation rate needs to reach around 3%. That is far from the current reality of 1%. At the current pace, it would take a century to upgrade all European buildings. Meanwhile, most European homes would benefit massively from a renovation. Currently, 75% of EU buildings have poor energy performance, and 85% were built before 2000. The numbers behind each renovation are specific. According to the European Commission, a deep renovation can cut energy consumption by up to 80%, which means a household can save up to €881 a year on heating and hot water. What's the hold-up? Between 2016 and 2020, the deep renovation rate, meaning renovations cutting energy use by 60% or more, reached only 0.2% of the residential stock. The cost of staying slow is not only a higher energy bill. From 2028, the EU's Emissions Trading System for buildings (ETS 2) will price the carbon in gas and heating oil used in homes. Households heating with old gas boilers will pay more. The policy is an important push towards climate and energy-efficiency goals, but if renovations cannot keep pace with the system's rollout, some households will feel an additional burden on their budgets. Ana Tisov noted that barriers vary by location: awareness gaps in Valencia, more fragmented housing stock in contexts like Slovenia, and upfront cost problems everywhere. There's also an investment missing. Bruegel, a Brussels-based think tank, identified a €150 billion annual investment gap that needs to be filled to meet the emission reduction targets. Once ETS 2 is implemented, a large part of the revenue generated from the carbon allowances should support renovations through the Social Climate Fund. But to unlock that funding for their citizens, states first need to set up their national frameworks by transposing the necessary directives. “Energy efficiency in European homes is not only a climate measure, but also a strategic security tool,” Tisov told us. “Every kilowatt-hour not consumed is energy that does not need to be imported,” she said. “Energy efficiency also reduces pressure on electricity grids and peak demand, making it easier to integrate renewable energy sources and improve overall system resilience.”