Incentive Policies for Residential Buildings Energy Retrofit: An Analysis of Tax Rebate Programs in Italy

Starting from the oil crisis that occurred in the early 1970s, the issue of energy efficiency has occupied an ever more prominent place in the economic, political, and academic debate. In this context, the construction industry has been considered among the sectors that have the greatest potential for the reduction of energy consumption and greenhouse gas emissions, as well as for the use of energy from renewable sources. With regard to the European situation that is the focus of this research, the first regulations on building energy performances date back to the mid-seventies. These regulations, which had a significant spread until the 1980s, have focused on the definition of minimum requirements for the building elements. Over the years, the introduction of new regulations has established a series of economic instruments for the promotion of energy-saving technologies. During the last decade, the use of incentive programs has strengthened. Meanwhile, what has been gradually better recognized is the role played by the refurbishment of existing buildings in reducing energy consumption and greenhouse gas emissions, as stressed by the most recent Directive 2010/31/EU on the energy performance of buildings. Under this framework, the incentive policies intended to achieve energy improvements in buildings face a twofold challenge. On the one hand, they have to stimulate the increase of the rate of building renovation; on the other, they should ensure the achievement of minimum performance standards, according to the EU’s goals. Given these premises, this research aims to verify, using a Discounted Cash Flow Analysis, the suitability of the tax rebates currently in force in Italy to stimulate private investments and to be an effective tool to reduce the EU’s energy consumption. The investment costs of 14 refurbishment alternatives, applied to seven single-family houses located in Italy, are estimated. The cost appraisal considers the retrofit expenses and all the ancillary costs that affect the decision-making process of a private investor, as well as the effect of the tax rebates. The results we achieve underline that the analyzed programs are not completely able to stimulate the enhancement of minimum energy standards in buildings. Indeed, the maximum amount of works eligible for the deduction is too high, if linked to an actual increase in global energy performance. This mechanism makes more profitable the exploitation of incentives related to the adoption of specific technologies, which, however, do not guarantee the overall increase of the buildings’ performances

Challenges for public-private partnerships in improving energy efficiency of building sector

The provision of private capitals to build and operate of works bringing benefit to the community received a major boost during the la st three decades, by the spread of public private partnership schemes all over Europe. Both project financing (contractual PPP) and public-private partnerships with shared capital (PPPI) were mainly used to build infrastructures able to generate income through revenues from users, recovering by this means at least a share of the investment costs. Some changes that have occurred over the last five years make it difficult in the near future the implementation of the cooperation models used in the past. The economic and financial crisis has dramatically worsened the supply of capital necessary to complete the projects, while the needs to which the public administrations are facing are rapidly changing. Over the most tried and tested field of big infrastructure and urban facilities, new priorities are emerging, such as the refurbishment of social housing stock and the supply of new homes at affordable prices or rents for low income households, as well as the rehabilitation of public school buildings. As for environmental reasons, the achievement of high standards of energy efficiency is also an important variable for the feasibility of PPP scheme, in particular in retrofit and refurbishment of existing buildings. A reliable prediction of the achievable energy efficiency levels and their impact on operating costs of the buildings affects the structuring of public private partnership, and in some cases it may represent a main driver of its economic and financial sustainability. In this context, significant benefits can be derived from the use of several tools - mandatory, incentive, voluntary \u2013 made available to support energy efficiency by different levels of regulations - European, national, local. This paper investigates innovative business models for energy retrofitting actions and several available tools to subsidize their adoption. The paper comprises a case study selection, based on a detailed analysis of eco-innovations collected in Italy, and a focus on a significant case

A Procedure to Evaluate the Extra-Charge of Urbanization

The Public-Private Partnership is also used, at international level, to carry out interventions in urban variant on areas or buildings that, by enhancing the value of (private) real estate properties, guarantee an economic return for the local community through an extraordinary contribution of urbanization (ECU) paid to the Administration by the private entity. The Italian Regions and Municipalities that have regulated the ECU calculation adopt a procedure of transformation value that does not specify either the duration or the risk-related rate of return of the real estate operation, which are essential factors for its balanced quantification. The paper defines a procedure that integrates method- ologies, diffused in practice and literature, with official datasets to determine objectively the ECU, also evaluating its sensitivity to the critical variables of the transformative process. The proposed procedure is easy to apply and adaptable to a wide range of interventions and to different phases of the public-private (re) negotiation. It is in line with the Italian case and it is consistent with the international evaluation standards (IVS), having a general validity in the esti- mation field

Building\u2019s Operational vs Embodied Energy: needs and barriers for a more reliable environmental impact balance

To comply with EU directives, which require new buildings to be nZEB by 2021 (2010/31/EC) and all buildings to be nZEB by 2050 (2018/844/EC), the construction industry has mainly focused on the containment of energy consumption during use, but scientific literature highlights that techniques employed to achieve higher operational energy efficiency lead to an increase of embodied energy, embodied carbon and other environmental impacts, especially those related to the manufacturing of building materials. The more stringent energy standards have thus reduced the impacts of the building operational phase, raising those relating to materials and components which are required to allow the buildings achieving these benefits. Several evidences of this trend are provided by applying the Life Cycle Assessment (LCA): although that method is not currently addressed by the EPBD, the key role that the embedded impacts play on the building environmental balance is confirmed. Though a precise calculation of embedded impacts is difficult to perform, due to the many factors involved, the estimation of their share compared to the operating impacts is crucial to determine an effective building energy and environmental balance. Moving toward this target, the Sustainable Building Rating Systems (SBRS) are progressively integrating LCA-based criteria within their protocols. This should provide a simplified and standardized approach thus helping their application in building sector, as preconized by the literature. However, several discrepancies emerge in both method\u2019s application and interpretation of the results among the different SBRSs in use worldwide