Recommended Read - Financial Barriers to Climate & Comfort Renovations

08 February 2021 - Published by Deirdre Buist
Empirical analyses show that most owners finance renovation projects with their own resources and carry them out step by step over time. Climate renovations are not a priority for all owners - many want to primarily upgrade their home comfort and subsequent resale value. In practice, energy renovations are often the result of non-energy related investments. Our Stronghouse partners at the City of Roeselare have shared a report published by Agoria – a recommended read to understand the financial barriers to hoemowners energy renovations.

Agoria, a technology federation with more than 2000 member companies has produced an empirical report - of interest to those involved in energy efficiency, renovation and retrofit. In this report, written by Prof. Dr. Johan Albrecht and Sam Hamels of Ghent University, the authors tried to quantify the importance of financial barriers to renovation by creating and using a ‘synthetic’ database filled with relevant characteristics of owners and houses

Energy renovation investment

The Agoria analysis shows that 40 to 51% of current homeowners are not able to finance the climate renovations they would wish for. If home comfort renovations are added to these climate renovations, then 47 to 59% cannot finance this total renovation. Most of these owners are more than € 50,000 short. So, offering limited renovation subsidies will make little difference. The analysis shows that only households with an equivalent monthly income of €3000 or more can finance all necessary renovation costs.

A large proportion of the current owners has already invested in energy-saving measures such as roof insulation in the past. Many owners believe that their house is quite energy efficient or even future-proof. Regardless of their financial capacity, most of these owners have no desire to carry out renovation works with a long payback period.

Homeowners decide

The success of any renovation policy will depend on the decisions taken by millions of different homeowners  in the coming years.

Buildings in the EU are responsible for about 40% of energy consumption and 36% of CO2 emissions. According to the European Commission, 75% of the building stock is not energy efficient, indicating a huge CO2 reduction potential. On the other hand, the Building Energy Performance Institute Europe states that 97% of the building stock is in need of renovation2. In addition, 75% of the current building stock is expected to continue to be used in 2050. An ambitious and pragmatic renovation strategy is essential to accelerate the transition towards energy efficient, low carbon building stock and brings various challenges.

  • Which combination of policy instruments can effectively provoke this radical transformation?

  • What is the total social cost of this transformation and will the invoice be distributed in an acceptable way?

  • How do we customize essential EU policy schemes as each Member State has its own dynamics in terms of housing, construction and renovation?

  • How do we engage and enable homeowners when facing important barriers, such as financial constraints, excessively long payback time on renovation investments, individual preferences etc. ?

These barriers certainly have an impact on the current degree of renovation, but by 2050 a large proportion of the houses will be sold to new owners, offering opportunities for transformation. The rate of income growth between now and 2050, as well as the evolution of policies on housing, spatial planning, urban transformation and (semi-) public infrastructure, will be particularly important factors in terms of accelerating the rate of renovation.

A brief overview of historical energy efficiency policies in the European Union shows that their impact has been rather limited so far.

Financial barriers

The Agoria publication explains the financial barriers to major renovation works from the perspective of current homeowners, taking into account their behaviour, preferences and strategy. The analysis aims to offer some pragmatic answers with regards to the financing of (major) energy renovations with their own savings and/or external capital (e.g. commercial loans).

You can access the full report  from here: The Financial Barrier to Climate & Comfort Renovations


For more information about Agoria please go to