National Programme for Energy Efficiency in the Multifamily Residential Buildings

National Programme for Energy Efficiency in the Multifamily Residential Buildings

Duration

2015-2020, continuation expected

Geografic scope

National

Recipients

Homeowners’ associations

Managing body

  • Methodology: Ministry of Regional Development
  • Financial operations: Bulgarian Development Bank
  • Operational management: Municipalities

Other stakeholders involved

  • Project implementation: Structural and energy auditors, designers, construction companies, building supervision, product and component suppliers
  • Programme design: Branch chambers, professional organisations, NGOs, financing bodies, facility managers

Volume of funding

100% subsidy rate for all activities related to the execution of the project (structural and energy audit, design, construction works, supervision). Total budget of €1 billion

Funding method

Public funding – national budget

Target housing situation

Multifamily apartment buildings

Eligible energy efficiency measures

Thermal insulation – roof, floor, facades, window replacement, LED lighting in common spaces. Solar thermal installations and revision of heating installation eligible in the first stage of implementation but blocked by lowering the cost ceiling

Targeted energy performance

Energy class C: 191-240 kWh of primary energy for the whole energy consumption of the building

Process of application

After agreeing their intention to participate at their general assembly with 90% of the votes, the homeowners’ associations submit the application documentation to the local authority. The local authority concludes a contract with the regional governor as representative of the state and with the Bulgarian Development Bank. After receiving the funds, the municipality is responsible for all tendering procedures and supervision.

Details

Starting in 2016, the programme was dedicated to the renovation of multifamily residential buildings up to energy class C at 100% grant rate, on a first-come, firstserved basis. Up to January 2021, the renovation of 1,923 buildings has been completed. No social criteria for eligibility were applied, meaning that even highincome households were eligible for the 100% subsidy. No technical monitoring of the results was applied – the statements about the energy savings were based on “normalised” energy audits and surveys with beneficiaries. Although the measures definitely had a positive impact on households at risk of energy poverty (reaching up to 50% of the total number of households as per expert estimation), the results could be much better if higher energy targets and differentiated eligibility criteria were applied. However, despite the slow start, the majority of the beneficiaries are happy with the results and there is growing interest in the continuation of the programme.

Best practice cases

The municipality of Burgas was one of the most active in the programme, with more than 200 buildings renovated. Being one of the first to develop an internal administrative support structure and to convince the HOAs to apply, it used the relatively generous conditions of the first stage of the programme to integrate solar thermal installations coupled to the district heating system and to apply attractive design solutions and district-level branding.

Limitations

Apparently, the scope of the programme was relatively small, as €1 billion was sufficient for only about 4% of the eligible buildings. Given the fact that the execution of the programme spread over five years, it is obvious that at this rate, there is no way that all households will be served. As no other programmes or financing instruments offering different conditions can compete, it also prevented the successful application of market-based energy efficiency services. At the social level, it sent the wrong signal to citizens that they were not responsible for maintaining and renovating their own property, which can have a very negative long-term impact on the application of more sustainable financing mechanisms requiring owner contributions. From the point of view of energy saving, the low minimal requirements do not exploit the full energy saving potential of the buildings and can have a blocking effect on further renovation in the foreseeable future.

Pathways for improvement

The Bulgarian government has applied for continuation of the programme under the EU Recovery and Resilience Mechanism under similar conditions and preserving the 100% grant rate. However, it is obvious (as also confirmed by the national long-term renovation strategy) that public funds will not be sufficient to increase the scope of the action, so private financing should be attracted. In this regard, it is suggested that a roadmap for gradual decreasing of the grant component is applied. It has to be accompanied by establishment of complementary financing mechanisms at national and local level (securing access for energy-poor households) and involvement of various energy service providers, in parallel with a large-scale communication campaign to fight off possible social repercussions.

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