Unlocking Private Investment to Deliver Building Renovation and Clean Energy for All

6 February 2017

By Ulrich Bang, Senior Director, Public Affairs & Corporate Responsibility, VELUX Group

Last year the VELUX Group celebrated its 75th anniversary – three quarters of a century creating better living environments with daylight and fresh air. Our main product consists of energy-efficient roof windows, together with a range of other products such as blinds, roller shutters and remote controls. The VELUX Group has manufacturing and sales operations in more than 40 countries, with the EU being our most important market.

Improving energy efficiency in buildings is an important topic for the VELUX Group. It represents a huge, untapped potential, not only in terms of using resources in a smarter way, but also in terms of boosting economic activity, growth and jobs.

In the EU, buildings are responsible for 40% of total energy consumption and 36% of CO2 emissions. As 75% of existing buildings are not energy-efficient, it is easy to see why energy renovation is a key target area.

VELUX’s particular contribution to increasing energy efficiency and reducing greenhouse gas (GHG) emissions in buildings is through the installation or replacement of highly energy-efficient windows. Nevertheless, there are general barriers to building renovation, especially when it comes to financing and unlocking private investment. Many homeowners leave energy renovation projects at the idea stage, as they imagine them to be both complex, with multiple providers required to carry out the project, and also overly expensive.

The BetterHome Initiative – A Way of Overcoming Barriers to Renovation

To overcome this, the VELUX Group has teamed up with three other global companies within the building industry who also provide energy-efficient solutions¹ and in April 2014 launched a new initiative called BetterHome. The idea with this concept is to provide a service which simplifies the process of an energy renovation project for homeowners. By visiting BetterHome’s webpage, homeowners can get an overview of the energy saving potential of their renovation project, and see concrete examples of different energy-efficient solutions depending on how much they want to invest.

Through the BetterHome webpage, it is also possible to get in contact with accredited local installers who are part of the BetterHome initiative. The installer will provide guidance around the required improvements, the energy saving potential and also financing options. The concept is that the installer will be the homeowner’s single point of contact for the whole renovation process – therefore making it simpler and more convenient. Banks and mortgage institutions in Denmark are supporting partners in the BetterHome initiative, and they provide guidance and help to secure the correct financial services, thereby reducing uncertainty.

BetterHome provides further peace of mind by showing ways in which the investment will increase the value of the property due to improved comfort, energy savings and living conditions.

A “Pick and Click” approach to selecting approved providers and services puts the customer centre stage, and the approach has given positive results so far. The BetterHome initiative reached its targets in Denmark and has been subsequently extended to Sweden in 2016.

The Velux Group and the EMF-ECBC Energy Efficient Mortgage Initiative

One of the principal barriers preventing homeowners from renovating is financing – even though energy renovation has a positive impact on property value, while savings on energy bills increase disposal income.

Therefore, the VELUX Group is also interested in the new Energy Efficient Mortgages Action Plan announced by European Mortgage Federation – European Covered Bond Council (EMF-ECBC). This aims to help the market recognise and price in the value of energy efficient homes. We believe that the EMF-ECBC initiative has the potential to further increase the renovation rate and thereby contribute towards greater energy efficiency in the EU.

It is clear that we need cooperation across sectors and industries if we are to unlock private investment in European home renovation. As a responsible company, we have to step up to the challenge.

¹ Danfoss, Grundfos and ROCKWOOL.

This article was originally published in the January 2017 edition of Market Insights & Updates, the EMF-ECBC Monthly Newsletter. Please note that any views or opinions expressed in this article are those of the authors and not necessarily those of the EMF-ECBC. This article does not constitute investment advice.