Parma, Italy
3 strongest incentives motivating Parma citizens to energy renovate their homes
The ultimate goal of the Municipality of Parma in Italy is to reduce energy cost and energy poverty of the households on its territory while improving their quality of life. Beginning of the next year will be marked by the launch of a set of incentives and accompanying measures that shall motivate citizens and local businesses to energy renovate their buildings.
Energy System Research (RSE) in collaboration with the Ministry of Economic Development carried out a study on the building stock of the Municipality of Parma that consists of 18,671 residential buildings and 80,595 residential units. Via a survey targeting citizens, they also examined the main financial and non-financial barriers to energy renovation of the private building stock.
Decision-making process of condominiums is perceived as the biggest obstacle, followed by lack of financial resources. In condominium it is difficult to reach an agreement satisfactory for all owners. In this regard, the municipality notes the importance of involving the condominium managers as main partners and intermediaries in the internal decision-making and promotion of energy efficiency measures.
Citizens have also expressed the need for incentives that would encourage them to implement energy efficiency measures. Three incentives are perceived as the most motivating: energy bill reduction, tax deduction and the price of energy. Free energy audit also obtained quite a high score.
Moreover, 63% of respondents found the incentive in the form of soft loans very important. Among participants who attributed positive evaluation to this financial instrument, 66% would accept a 0% interest loan, while a share of 34% would be willing to pay at most a 2% interest.
Municipality has developed an action plan that shall remove the identified barriers and introduce incentives mobilising private investments. It will:
- Set up an Information Desk for citizens and consumers associations.
- Support Condominium Administrators at technical committees - informing them about benefits of energy efficiency measures and providing technical assistance for planning and implementation of energy efficiency measures.
- Delegate management and evaluation of energy audits to Parma Energy Agency.
- Create standardised models for energy audits and energy performance contracting.
- Launch an expression of interest targeting local banks – future partners of the soft loan scheme.
The University of Parma has been evaluating and benchmarking two business model scenarios of the future soft loan scheme:
- Loans are provided by local banks and the municipality creates a dedicated guarantee fund.
- Loans are provided by local banks and the municipality is subsidizing the preferential interest rates or manages to negotiate reduced interest rates by creating competition.
The scenario where the municipality allocates part of the municipal budget to a revolving fund and then provides direct loans to beneficiaries was very soon excluded. It became clear that the municipality will not be able to allocate sufficient budget and human resources for management of such a revolving fund. This should be the role of a future partner bank for whom it is a core-business to manage the loans.
The municipality has already contacted and discussed the idea with 6 financial institutions and banks (incl. Fondazione Cariparma, Crédit Agricole) and discussed the possibility to create a regional guarantee fund with the representatives of the Emilia Romagna Region.
The University is also studying possible economic and social impact of the scheme on the Municipality of Parma. A methodology that provides for the assessment of the social return on investment is under development.
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