RenOnBill - standing for 'Residential building energy renovations with on-bill financing' - aims to scale up investments towards deep energy renovations of residential buildings by promoting the development and implementation of on-bill schemes, based on the cooperation between energy utilities and financial institutions.
Context
In order to meet the 2050 long-term target for reducing EU GHG emissions by 80%, it is necessary to dramatically increase the yearly buildings renovation rate from the current 0.4%-1.2% to at least 2.3%. Meeting this objective requires the utilisation of massive financial resources involving financial institutions who are sometimes resistant, due to their unfamiliarity with the technical aspects of energy saving solutions, the small average size of these investments and due to difficulties in attributing energy savings to their respective impact on cash flows. Therefore, the perceived risk of energy efficiency investments tends to be higher than the actual one. On-Bill schemes (OBS) offer a way of financing energy renovations that utilise utility bills as repayment vehicle. OBS has been in use for more than 30 years, particularly in the USA and Canada, where it significantly drives the building renovation market. In Europe, few attempts have been made, such as the UK’s Green Deal and Latvia’s SUNShINE, but the potential for on-bill schemes in Europe remains significant.
Primary actors
RenOnBill believes that OBS schemes can only be proficiently implemented if there is a close cooperation between energy utilities and financial institutions. Energy utilities have the technical capacities and information necessary to conduct a thorough evaluation of individual projects. They know the energy consumption profile of their customers in detail and are informed about customers’ default rates on energy bills. In view of such information, utilities can segment their customer base, associating corresponding solvency risks, and eventually propose building renovation services to their customers. In order to obtain financing, utilities can leverage their role as aggregators, bundling similar projects in order to achieve scale, thus making small-scale energy renovation projects in the residential buildings sector attractive to investors. Financial institutions, on the other hand, can reach the residential building renovation sector and become active in energy efficiency financing without being confronted with issues such as project fragmentation.
Objectives
RenOnBill’s overall objective is to scale up investments towards deep energy renovations of residential buildings by promoting the development and implementation of on-bill schemes, based on the cooperation between energy utilities and financial institutions. In particular, the project will:
  • Analyse and define the residential building market context to enable replication of suitable OBS across Europe;
  • Engage key stakeholders through national stakeholder platforms;
  • Develop tools to address the residential sector’s energy renovation financing demand and assess and bundle investments based on a transparent methodology;
  • Develop and implement business models in the three RenOnBill partner utilities through the development of pilot on-bill schemes.
  • Utilise RenOnBill takeaway messages and the insights gained to support and disseminate EU-wide knowledge on OBS.
These objectives correspond to the five RenOnBill pillars, which in turn constitute the methodology of the project. In order to reach these objectives, RenOnBill operates on four focus countries, namely Germany, Italy, Lithuania and Spain, because of their different characteristics, such as the climatic conditions and the availability of energy renovation support schemes. This allows analysis of replicating OBS in a variety of environments and country contexts within the EU.
View RenOnBill’s five pillars