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POLICY SUGGESTIONS Do not focus on tariffs and costs only Not everybody can bank on future savings, and the problem of upfront cost is a serious one. A policy that aims at enabling change via the compensation of the carbon pricing might protect from the impact of such a measure, but might not just be useful to enact change. Carbon pricing itself proves to be an insufficient measure when it comes to improving the economics for renewable heating unless coupled with subsidies that rebate the investment costs. Besides the net cost of the installation (after applying subsidies), even when the payback time is very short can still be a problem for families that cannot count on savings. Upfront anticipation of tax deductions, as applied in Italy, seems to be working well, among other things because it applies to consumers of the no-tax area too. Other options would be grants or E.S.Co schemes that would pay back through savings. Electricity utilities could play a major role by selling energy- efficient and renewable heating technologies. A regulatory framework that favours renewable heating should also be in place: Minimum Energy Performance standards should be driving this change, in a context where permitting is made easier through revised urban building codes. Apply revenues from ETS and Recovery and Resilience funds The combined effect of the national allocation of the recovery and resilience plans and a European fund based on the revenues from carbon pricing could become a key enabler of both national and local projects aiming at proven technologies and certified CO2 savings. If we consider that the average heating system has a lifespan of 20 years, roughly 5% of the installed stock will be replaced every year. Given the increased refurbishment ratio expected in the coming years and the increased cost of gas, a more realistic figure would be 7%. The analysis estimated roughly 70Bn the cost of switching EU’s gas boilers to renewable heating. This would result in a yearly cost of ca. 4.7Bn over a 15 years period. This figure includes neither oil and biomass stoves/ boilers nor district heating, which would need to be addressed with extra funding. Shift from oil heating requires substantial less subsidies given the higher cost of oil and the lower number of oil heated houses. Target easier buildings and low-income households first Almost all buildings are compatible with the existing renewable heating technologies considered in the report. Nevertheless, not all buildings will be refurbished at once. Besides the older boilers that come to the end of their life, replacements should focus on buildings where the switch pays back quicker and the existing technologies are perfectly suitable to replace fossil with minimal costs. A special attention should be given to those consumers mostly in need of bills cuts and to standardised, large-scale interventions in the social housing domain. These technologies are quickly evolving: for instance, several heat pumps recently placed on the market are based on low-GWP and natural refrigerants and can offer high flow temperature and replace fossil boilers as plug-in solutions. The evolution of the technologies will not only bring down costs but also allow for more sophisticated solutions that can apply to those situations where today heat pumps and solar thermal are not the optimal solutions. Some buildings, as blocks of flats with individual heating and historical buildings, might need special subsides to switch to district heating or use an interim solution such hybrid boilers. 8PDF Image | GREEN HEAT FOR ALL
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