The Financial Challenge of Home Renovation

Europe's green transition demands an urgent scaling up of dEEp (deep Energy Efficiency as a priority) renovations.

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Challenge: High upfront costs hinder widespread adoption.
Solution: Shifting from traditional subsidies to blended finance models within Integrated Home Renovation Services (IHRS).

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This approach unlocks private investment, de-risks renovations, and accelerates the transition to energy-efficient housing.
Financing large-scale home renovations remains a key obstacle in Europe’s shift towards energy-efficient housing. High upfront costs discourage homeowners, highlighting the crucial need for flexible and affordable funding solutions that reflect these projects; documented low collection risk. Integrated Home Renovation Services (IHRS) leads the way with innovative financial models that blend expert technical knowledge with customised funding solutions.
This article explores three successful IHRS initiatives, Hauts-de-France Pass Rénovation (France), MultiHome (Bulgaria), and AdEPorto (Portugal), which were featured as success stories in the EU Peers project. It highlights their diverse funding approaches, including public subsidies, private investments, and self-sustaining revenue models.

Public Support: Hauts-de-France Pass Rénovation

Hauts-de-France Pass Rénovation operates as a public entity under the Etablissement Public Industriel et Commercial (EPIC) model. This innovative setup allows it to serve as both a public service and a commercial enterprise, delivering a complete renovation solution for private homeowners, condos, and municipalities.

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Essential funding strategies:

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Low-interest, long-term loans: This service offers financial solutions that make energy-
efficient renovations more accessible, easing the financial strain of high upfront costs for
homeowners.
Government-backed guarantees: Using public funds, Hauts-de-France Pass Rénovation
makes renovation projects more accessible to a broader range of people, including low-
and middle-income households.
Integrated financial and technical support: The blend of financial aid and expert
renovation services simplifies the process and boosts homeowner confidence.

The success of this model highlights the crucial role regional and national governments can play in financing energy-efficient renovations through well-structured and sustainable financial solutions.

Private Investment and Public-Private Cooperation: MultiHome

While public support is vital, private sector involvement will be essential to scaling up the renovation rate. MultiHome, an initiative by the Energy Agency of Plovdiv (EAP), demonstrates a hybrid model that blends public and private financing to establish a self-sustaining renovation ecosystem.
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Essential funding strategies:

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Partnerships with financial institutions: MultiHome collaborates with banks and other economic partners to offer homeowners customised financing options, including green loans and grants.
Municipal partnerships: Local governments support the initiative by providing subsidies, tax incentives, and logistical assistance. Network of trusted providers:

MultiHome boosts investor confidence by guaranteeing high-quality renovation services through a network of pre-approved contractors, simplifying the process of attracting private funding. This balanced cooperation model demonstrates how IHRS can effectively combine public and private capital to maximise impact and ensure the long-term sustainability of their renovations.

Financing by adding assets: AdEPorto

AdEPorto, the Porto Energy Agency, drives sustainable development in the Porto Metropolitan Area by leveraging asset-backed financing to fund energy efficiency and renewable energy projects. By securitising municipal assets, including public buildings, infrastructure, and underutilised spaces, AdEPorto structures investable vehicles that unlock private capital, leverage EU funding, and generate sustainable, risk-adjusted financial returns.Key initiatives like Porto Solar securitise rooftops for solar installations through power purchase agreements (PPAs) and leasing models. At the same time, the Powering Energy Hub integrates energy-efficient upgrades into existing infrastructure using EU grants and performance-based contracting. The Energy and Comfort for All initiative also combats energy poverty by retrofitting social housing and securing funding through green bonds and public-private partnerships. AdEPorto de-risks sustainable investments through these strategies by combining municipal assets with green financing mechanisms such as energy performance contracts (EPCs) and blended finance models. By capitalising on public infrastructure as revenue-generating assets, AdEPorto enhances asset monetisation, optimises capital allocation, and unlocks new liquidity streams, accelerating the energy transition while ensuring long-term financial viability and fiscal resilience for municipalities and investors.

Across the successful IHRS initiatives (Hauts-de-France, MultiHome, AdEPorto), key themes emerge:

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Blended Finance: Combining public and private capital creates sustainable funding ecosystems.
Risk Mitigation: Strategies like guarantees and securitisation reduce risks for all stakeholders.
Integrated Support: Pairing funding with expert guidance simplifies renovations and ensures quality.
Local Adaptation: Each initiative adapts to regional needs and market conditions.
Long-Term Sustainability: Models prioritise ongoing viability and sustainable revenue streams.
Public-Private Partnerships: Collaboration unlocks innovation and scales impact.

‍Alignment with EU Goals: Initiatives support EU energy and climate objectives.

The Future of IHRS Client Financing

The success of Hauts-de-France Pass Rénovation, MultiHome, and AdEPorto demonstrates that there is no universal financing model for home renovations. A sustainable future depends on a strategic mix of public subsidies, private capital, and self-sustaining financial structures.

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Key takeaways include:
- Government-backed financial instruments, such as low-interest loans and guarantees, play a critical role in improving affordability and accessibility for homeowners.
- Public-private partnerships catalyse unlocking new funding streams, enhancing scalability, and fostering trust in IHRS initiatives.
- Financing through asset-backed models, by securitising public infrastructure and assets, can unlock additional capital, further enhancing the sustainability and scalability of home renovation projects.
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As Europe intensifies its green transition, developing innovative financial instruments will be pivotal in driving the widespread adoption of energy-efficient home renovations. By leveraging the success of these proven IHRS models, regions can tailor and deploy fit-for-purpose financing strategies that optimise capital flow, align with local market dynamics, and generate sustainable, long-term financial returns.

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