Residential buildings use about 25% of final energy consumption in the EU and existing buildings are one of the sectors with the highest potential for implementing energy efficiency measures. Proper exploitation of such large potential requires an accurate valuation of energy efficiency projects. Due to a long list of project participants, as well as the costs and benefits they perceive, valuation of on-bill schemes deserves special attention. To select the most appropriate and feasible investment, the valuation of a single on-bill project has to consider and combine its technical and financial aspects simultaneously.
Financial decisions differ significantly from decisions related to technical issues. While technical decisions rely mostly on time-independent and well-known inputs, such as physical properties of materials, financial decisions are not that straightforward. Financial valuation usually requires forecasts of different inputs, such as energy prices, that are never completely accurate. In addition, complexity is increased by the fact that common financial analysis tends to neglect project results that are not obvious and easily monetised.
Investment analysis is especially important in the light of the Renovation Wave and Recovery and Resilience Facility funds. Proper valuation of on-bill schemes may be crucial for an effective use of these funds and significantly support implementation of the national recovery and resilience plans, and especially of their green transition components.
The new RenOnBill paper explains the financial valuation of on-bill investments and introduce some of the most important underlying topics. Special focus is on the practical implementation of valuation steps and different perceptions project participants may have when analysing an on-bill investment. A chapter is devoted to the monetisation of non-energy benefits and their inclusion into project valuation.
Finally, to support proper evaluation of on-bill schemes, and to ensure adequate allocation of available funds, the RenOnBill paper proposes governments undertake the following actions when setting up an on-bill renovation programme: developing their own on-bill project evaluation techniques and preparing and promoting clear on-bill project evaluation guidelines