Developing, piloting and standardising on-tax financing for residential energy efficiency retrofits in European cities and regions (EuroPACE)
EuroPACE will develop a scalable on-tax financing mechanism to unlock the huge potential for deployment of energy saving and generation technologies to European households. The scheme is inspired by the successful US PACE scheme that was invented in California in 2008. The project will address several fundamental challenges to EE investment by (1) A Market-Based Approach: EuroPACE will deploy private capital as up-front financing to homeowners, i.e. reduce reliance on grants and subsidies. In turn, municipalities will be the conduit for the repayment via a special levy collected with the property tax bill. (2) De-Risking EE Investment: the long-term repayments obligation is tied to a property and not its owner, (3) Technical Assistance: decision-making processes for homeowners will be optimized by training energy service contractors. They will be held to account by a comprehensive consumer protection code. (4) Aggregation and Standardization: EuroPACE will design standard underwriting requirements and project performance guidelines to enable project aggregation and Green Bonds issuance. By 2025, The EuroPACE industry will generate measurable impact in the three key areas:
I Economy - over 45.000 jobs and €5bn of capital in local economies across the EU27.
II Society - over 300.000 homes retrofitted and improved.
III Environment - energy saving of 3.5MWh/year, equating to CO2 savings totalling 1.8m tons. EuroPACE will account for just 4.6% of the European renovation industry by 2025 giving way to huge growth potential.
From a policy perspective, PACE will enable local and state governments in the EU to achieve the 2050 policy targets and COP 21 Paris Agreement goals of reducing energy consumption and greenhouse gas emissions. Additionally, PACE-funded projects result in local job creation; every $1M spent on a PACE project creates 15 local jobs. In a nutshell, PACE is a public policy that enables private sector investment.
Objectives of the project:
Europace has sets goals on the economy, environment and the society – the elements of the triple-bottom-line, concept that are considered necessary for achieving sustainability.
- Economy: EuroPACE aims to create successful Public-Private Partnerships (PPPs) that can promote public policies leveraging private initiatives.
- Environment: reduces emissions leading to improved air quality in the most polluted European cities, especially when combined with existing policies. EuroPACE aims to reduce CO2 at an annual rate of 1.2m by 2025, tripling from the previous year and equating to CO2 reductions by 200 tons for each million EUR invested.
- Society: PACE US has shown that real estate values increased by between $ 199 and $ 8,900 per home. This data is aligned with the empirical findings of several studies in the EU and Member States which demonstrated that, because of retrofitting, property values increase between 5 and 12%. EuroPACE intends to realize this potential for homeowners.
Project funding: The EuroPACE Project received funding from the European Union’s Horizon 2020
research and innovation programme under grant agreement No 785057.
Project coordinator: CASE
Technical leader: Global New Energy Finance S.L
Project partners: CASE – Centrum Analiz Społeczno-Ekonomicznych – Fundacja Naukowa (Poland), Global New Energy Finance S.L (Spain), Joule Assets Europe (Finland), Climate Bonds Initiative (UK), Ajuntament d’Olot (Spain), Agencia Extremena de la Energia (Spain), Ente Vasco de la Energia (Spain), Social Innovation for Communities – UPSOCIAL SL (Spain).