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Investigating EU financial instruments to tackle energy poverty in households: A SWOT analysis

Housing Europe's Policy Officer, Edit Lakatos delves into a comparative analysis

12 November 2020 | Economy, Energy

Why is it difficult to mobilise and fully exploit the available financial tools in the combat against energy poverty and what are the challenges for social housing providers? Our policy officer, Edit Lakatos and Apostolos Arsenopoulos, a researcher in the National Technical University of Athens (NTUA) provide an overview of the existing financial instruments and successful schemes focused on facilitating the implementation of energy efficiency-related measures, in the context of addressing the problem of energy poverty, along with its adverse socio-economic effects.

Despite the successful efforts, mobilising the necessary funding and channelling the investment remains a key challenge to energy efficiency-related projects.

The paper pinpoints that every single financial program features limitations lying in the heavy and time-consuming procedures, the ineligible operations and the minimum-scale requirements and co-financing. In addition to that, the (un)stable regulatory environment in each implicated country emerges as a crucial factor, since it can prevent several beneficiaries from accessing the financing scheme.

In order to design efficient financing schemes targeting the energy poor, among others, the paper shows why policymakers should consider the affordability element, the nature of financing, the project size and the inclusion of technical assistance into the specific schemes.

To maximise the take-up of the funds, a better understanding of the local needs is required so the respective financial instruments are adjusted accordingly, as well-targeted technical assistance and expertise tailor-made for the needs of each engaged country. Although it seems that the involvement of private finance is inevitable, the obstacle of the long-term payback time remains, which can reduce the interest of private investors.

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