This small town model will improve energy efficiency in your buildings!

Aradippou's financing solutions for energy efficiency actions


Located at the outskirts of Larnaca (Cyprus), Aradippou is a small town with a big vision. Thanks to its size, its homogeneous building stock and its Mayor’s ambitious vision, the city is testing innovative financing solutions in energy efficiency.

The municipality has already set up a soft loan scheme for photovoltaics in collaboration with the Cyprus Cooperative Bank. Through its participation in the Horizon 2020 INNOVATE project, Aradippou wants to develop a similar financing scheme for energy efficiency. The city also wants to set up a One-Stop-Shop service with public and commercial partners. This service will guide citizens throughout their energy efficiency renovation process.

A One-Stop-Shop for energy renovation

While access to finance for such renovations through commercial banks does not represent a major barrier in Cyprus, the island is still recovering from the last financial crisis. This affected salaries, employment, and the construction industry as a whole. Between 2008 and 2015, the construction sector lost 65% of its value – a severe shock from which it is only slowly recovering. Also, the crisis has made Cypriotes less willing to spend their income on renovation works. That is why the One-Stop-Shop project is also an opportunity to help the local economy recover from the crisis. It will encourage investment in energy efficiency measures and collaboration between construction companies.

According to the municipality, Aradippou’s buildings needs such renovation: 91% of the housing stock was built between the 1980s and early 2000s. At the time, there wasn’t any legal obligation for thermal insulation or other minimal efficiency standards. Despite the low energy performance, the owners don’t renovate their buildings because of their recent construction.

Integrating energy efficiency in construction works

To overcome this technical barrier, the municipality is identifying starting points for energy efficiency actions. This can be done by including them into other necessary construction works, for example integrating thermal insulation when fixing a roof. Also, the recent construction of many homes has the advantage that the original architect is still known and can assure the quality of the works. This way, the homeowner is sure that the renovation will have the desired result.

For the launch of its One-Stop-Shop, Aradippou will renovate 10 houses, thanks to the INNOVATE project. This will provide a starting point to build a sustainable business model, which can continue operating beyond the duration of the project. 
The services provided through the One-Stop-Shop are:

  • the development of personalized refurbishment products;
  • independent advice and technical assistance;
  • tailored financial advice;
  • coordination of suppliers and contractors;
  • monitoring to ensure high quality service from all participants.

The dual INNOVATE model distributes responsibilities between the municipality and the market. The municipality provides advice and orientation, including an energy check of the homes free of charge, and acts as a coordinator. Financial institutions and construction companies then take over on the basis of free market competition, guiding the homeowner during the renovation works.

Energy efficiency hotline and discount vouchers

Aradippou is dedicating space in its town hall to these services. The municipality is setting up a hotline where citizens can ask for advice. They are also considering to award a local tax credit and discount vouchers to a limited number of homeowners. The discounts would be assigned on a first-come, first-served basis.

The city will thus incentivise citizens by lowering the cost of investment. Thanks to the photovoltaics soft loan scheme, the city has already infrastructure in place to cooperate with banks. The coordination of the suppliers and contractors will be done by the Larnaca Chamber of Commerce and Industry.

New financial solutions

The recent change of ownership within the Cyprus Cooperative Bank may cause some delays. The city will have to re-establish cooperation with the bank’s new governance. Nevertheless, the municipality is considering to offer an interest rate subsidy, an action that was proposed within the INNOVATE project. This would enable the cooperation with all banks, providing a broad spectrum of financial solutions.
Aradippou is creating an innovative model for energy efficiency actions. We hope other cities in the region will be willing to follow its steps!

Read more about Aradippou soft loan scheme for photovoltaics in the RNP website!
Visit the INNOVATE project website

Source: http://www.financingbuildingrenovation.eu/cases/aradippou-cyprus/

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Author

Sara Giovannini

Publication date

October 24, 2018