9. ENERGY EFFICIENCY

share best practices with regional and local authorities, to encourage them to adopt energy efficiency plans for their building stock, and to implement energy management systems and commission energy audits (MEAC, 2017b).

At the beginning of 2018, the total floor area of buildings over 250 square metres used by public bodies was just over 1.35 million m2. As of January 2019, the area of buildings meeting the minimum energy performance requirements adopted in 2013 was 572 000 m2. Reaching the 2030 target of the NDPES implies that at least 240 000 m2 will need to be renovated by 2030. The average annual renovation rate for the period 201420 is estimated at 30 000 m², which leaves 170 000 m2 for the period 2021-30. The target for 2020 is a renovation rate of 20% and Estonia is well on its way to reach this if the current annual renovation of 30 000 m2 is maintained (MEAC, 2018). The IEA congratulates Estonia for this achievement.

A key challenge for the renovation and reconstruction of public buildings are small public units, like pre-schools and primary healthcare centres. They are eligible for renovation grants but often lack the technical competencies to undertake complex renovation works. To overcome this barrier, the government plans to develop a green label and green public procurement system and to offer technical support services for the small units. The example of Ireland in consolidating small individual renovation projects into larger ones to bring down procurement costs and to help with more standardised renovation solutions should be considered by the Estonian government. The IEA encourages the government to expedite the issuance of both the label and procurement systems to facilitate the renovation of the public building stock.

Support measures

Subsidies are the main support measure for improving the energy efficiency of residential buildings. Housing associations can apply for grant support to the Credit and Export Guarantee Fund (SA KredEx). Depending on the complexity of the renovation to be undertaken and the location of the building, financial support is equal to 15-40% of the total cost. In addition, up to 50% of the cost of a technical consultant or for the renovation supervisor can be reimbursed. Apartment associations that apply for a grant of 15% of the total cost must achieve 20% energy savings. Applying for 25% support requires the reconstruction of the heating system, the insulation of the façade and roof, and the installation of new windows. If, in addition, the new windows are insulated and a ventilation system with heat recovery is installed, the renovation work can receive 40% grant support (MEAC, 2017c).

Housing associations often finance their share of the renovation work through loans. However, there are instances where the banking sector considers these applications to have higher than average risks, e.g. due to the location of the building or to the large number of association members that results in poor payment discipline. In response, the government has launched a loan guarantee scheme for housing associations. The loan guarantee can cover up to 75% of the total loan amount and is also administered by SA KredEx.

Since late 2016, individual house owners can apply for a grant of up to EUR 15 000, but the grant cannot exceed 30% of the total eligible renovation cost. In addition, the government offers tax incentives for individual owners to encourage the insulation of owner-occupied private houses or apartments. In 2015, 18% of income tax declarations requested a deduction for their residential housing loans (MEAC, 2017c).

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ENERGY SYSTEM TRANSFORMATION