EuroPACE market analysis

Abstract

This paper presents the overall status, characteristics, and policy framework of the housing sector and the initiatives towards energy efficiency in residential buildings in Belgium in order to assess the market demand for EuroPACE - an on-tax financing scheme for home retrofits. In fact, there are over 5 million residential buildings in Belgium. In 2015, the construction of new buildings represented 44% of the building stock, while renovated buildings accounted for 56%. Moreover, there is a high degree of transformation of old buildings - office buildings or commercial buildings - into residential dwellings. What is also important is that Belgium is a largely urbanised country, with over 83% of the population living in urban areas. Furthermore, 62% of the building stock was built before 1970, and only 41% of dwellings have wall insulation, 36% have fully double-glazed windows, and 58% have roof insulation. These poor insulation figures show that the need for the renovation of the building stock is high. What is more, energy prices are among the highest in the EU and 20% of Belgians are experiencing energy poverty. About 22% of the total energy consumption of the country comes from buildings. To push this renovation further, Belgium must overcome a few barriers - notably financial and technical - before achieving energy efficiency in residential buildings. Barriers related to lack of interest from the authorities are not as significant, as the country and its three regions (the Flemish Region - or Flanders, the Brussels-Capital Region, and the Walloon Region - or Wallonia), which are responsible for the development and implementation of housing and Energy efficiency policies, seem committed to implement initiatives for energy efficiency adapter to local conditions and challenges. For instance, financial support measures such as green certificates, housing bonuses, and renovation premiums aim at boosting energy efficiency in existing buildings. In order to achieve its main objective, this paper analyses the residential building stock (age, size, quality, value, ownership, amount, as well as practical details relative to housing), the characteristics of its users (household composition, income level, and division between urban/rural areas, among others), the characteristics of its energy spending and production (energy price, sources, building energy levels, and energy poverty, among others), as well as the different initiatives and policies implemented at the national and regional level to reduce energy consumption and encourage owners to invest in more energy efficient options when buying or renovating their dwelling. The conclusion of the paper presents a brief Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis of the housing sector in order to evaluate the feasibility of an on-tax financing scheme such as the one proposed by EuroPACE.