The spatial and social footprint of the energy saving program “Eksikonomisi Kat’ Oikοn”

Building stock upgrade index

The impact of this energy saving program per municipality was sought using the available data. The “Upgrade Index” approximates this impact by dividing the number of upgraded buildings through the program by the total number of buildings per municipality, which potentially need upgrading (constructed before 1980).

Table 2: Municipalities of the Attica Region with the highest and lowest Building stock upgrade index

Data source: ETAAN, author’s processing

The municipalities of the Athenian metropolis present great differences regarding their building upgrading rate through the “Eksikonomisi kat’ oikon” program, as illustrated in Table 2. The Municipality of Athens shows one of the lowest indices, despite the concentration of needs presented earlier. This low performance should be related to absentee and rather indifferent landlords and to the numerous homeowners whose reduced financial means cover more pressing needs than energy upgrading. The index is close to that of the Municipality of Filothei / Psychiko, where the low effectiveness of the program was expected because almost all of its units were excluded from the program due to high level of official property values. On the other hand, the limited effectiveness of the program in municipalities such as Nikea / Renti or Perama should be attributed to the social composition of their population, dominated by strata with limited means to invest in such a project, even with a generous subsidy. Municipalities like Kaisariani and Kallithea did not benefit to the extent that would be expected following the features of their building stock, which again should be attributed to the inability of many residents to meet the financial requirements of the program. Among the municipalities of the Northern Sector, fluctuations are significant. This is due, on the one hand, to the very low indices in the Municipalities of Papagou / Cholargos, Filothei / Psychiko and Kifissia, that were largely excluded because of the high official property values. On the other hand, others municipalities, such as Penteli and Chalandri, display high indices. These municipalities benefited the most by the program, since they combine a level of official property values ​​that do not exclude them and a mostly upper-middle and middle class population profile, who is willing and able to invest in such a program. Piraeus presents one of the lowest indices, revealing the existence of problems similar to those that explain the low performance of the program in the Municipality of Athens. Map 5 gives a comparative picture of the success / effectiveness of the program in the municipalities of the region.

Map 5: Building stock upgrade index per municipality

Data source: ETAAN, author’s processing

Types of Program Intervention and their assumed impact

On the basis of the program’s data, the number of applications and the funds attributed to the different types of intervention and per municipality were calculated; the main conclusion is that in all RUs in Attica the allocation of funds among the three main types of intervention (replacement of window frames – wall thermal isolation – replacement of heating systems) is similar (Figure 3 and maps 6-8).

Graph 2:  Percentage of applications per intervention and per Regional Unit in the Attica Region

Data source: ETAAN, author’s processing

A total of about 60% of project funding was absorbed by the replacement of window frames, while the remaining 40% was shared almost between upgrading the building shell and replacing heating and hot water supply systems, significantly boosting the respective industries and their personnel. The impact of the program increased due to the long recession in real estate production and transactions, which was deepened by the crisis.

Maps 6-8: Allocation of resources per type of intervention and per municipality in the Attica Region

Data source: ETAAN

Maps 9 and 10 to 12 show the attribution of program resources – in total and by type of intervention – to each municipality in relation to the proportion of old buildings (constructed before 1980). The comparison shows that the relatively smaller attribution refers to the central municipalities with the largest population and the oldest building stock, as well as to some municipalities in the areas of Piraeus and Aspropyrgos. On the other hand, municipalities with comparatively greater attribution of funds are concentrated in semi-peripheral areas, mainly in the northeastern middle-class part of the region.

Map 9: Attribution of program resources by municipality in respect to the rate of old buildings (constructed before 1980)

Data source: ETEAN

Map 10-12: Attribution of program resources by type of intervention and by municipality in respect to the rate of old buildings (constructed before 1980)

Data source: ETEAN

Conclusion

During the 5 years of the “Eksikonomisi Kat’ Oikon” program, € 396 million was spent on 50.041 approved applications. It is estimated that in the middle of the program about 1,500 applications / week were filed nationwide. 16% of the applications were submitted in the Attica Region (Taxheaven, 5/2012), which means that in Attica much less applications were submitted in respect to its population.

Despite the large number of applications, the program was rather complicated and accessible with difficulty. Beneficiaries of low income groups and, therefore, with a substantial need for subsidy, often had difficulty accessing resources and were frequently excluded. Banking institutions, acting as intermediaries between the ministry and the citizens, evaluated the applicants’ financial reliability in terms of guaranteed loan repayment criteria and the applicant could proceed only after their positive decision. Moreover, the obligatory loan provided by the program to enable the beneficiary to pay his/her part was often treated with mistrust by potential beneficiaries (see the Implementation Guide of the program).

Limited public awareness has also been an issue. The benefits of participating in the program have not been sufficiently disseminated. Pivotal was the poor information of related professionals, who were often not eager to participate. The repayment option through the bank did not provide them with the security they wanted in order to cooperate, and further hesitations were triggered by the fact that strict standards of cost, construction standards and certification procedures had to be respected. Even in the cases where merchants were actively interested to participate, they undertook in fact a professional risk. Banks rarely followed the reimbursement deadline for dealers and forced suppliers to play the role of sponsor, as they were often paid up to 7-10 months after the project was completed. This was not manageable for small local businesses because it made their function unsustainable. As a result, many of these businesses were excluded from the program.

The spatial distribution of approvals covered the entire Attica Region with some significant internal disparities. The interest per Regional Unit as well as per Municipality has revealed particularities, with typical cases being the Municipality of Athens and Piraeus, where the number of applications is much lower than expected from the large number of old buildings (constructed before 1980). Similar observations can be made about the Municipalities of Zografou and Kallithea. The interpretation of the comparatively low interest of the owners in these areas should be sought in the difficulty of a significant part of the potential stakeholders to meet the financial requirements of the program. Another possible explanation is that these are areas with the highest rental rate in the Region and where property owners show some reluctance to invest in upgrades, especially in a fairly problematic market for rented accommodation also burdened by the large number of vacant houses.

Regarding the social groups of beneficiaries, at first glance we assume that the main beneficiaries were those with the lowest income, since 56% of the applications were submitted by the lowest income category claiming 70% subsidy; 43% were submitted by the second income category claiming 35 % subsidy and only 1% of the applications were submitted by the highest income category claiming 15% subsidy. The real social impact of the program is, however, more complex than what is shown by the simple breakdown of the income tiers of the beneficiaries. Many beneficiaries may, for example, be characterized by a low income, but also be part of a network of families with greater incomes and the potential to enhance this effort energy upgrades to their property. The spatial distribution of resources and the average grant level show a privileged concentration in middle and upper-middle class areas.

Some areas are potential targets of increased interest due to the large accumulation of old building structures. For the efficient implementation of a relevant program in the future, one could initially be more thorough in identifying areas requiring urgent intervention, greater attention and possibly preferential treatment.

The way funds were distributed to different interventions shows that beneficiaries have been eager to change mainly window frames, and thus provided some positive impact to the relevant industry. However, the fact that this single option was not enough to upgrade properties to the next energy class, led to more complex applications combining different interventions and, eventually, preventing the channeling of resources into one single market.

In summary, it appears that a more full, better targeted and well disseminated information could increase the interest of the public and facilitate the participation of professionals to the energy upgrading of the building stock. At the same time, the practical problems of delays in implementation, repayment and information that create insecurity for consumers and professionals should be handled in a better way in the next rounds of the program. This will result in faster and more efficient resource attribution and wider energy upgrading. However, the problems with the implementation of the program are not limited to the issues of communication and orderly processing, as they also concern the mechanisms that systematically favor or hinder certain social groups in their decision to participate.