Green Homes are more affordable than you think | Over4 & RoGBC
Why energy efficiency matters?
The European Union reports that the buildings sector is responsible for 40% of the energy consumption and 36% of the CO2 emissions, being the sector with the highest energy consumption. The same figures are reported in Romania, where 85% of the residential buildings are built before 2000. Residential buildings are responsible for 81% of the total energy consumption in the building sector.
Besides the need of renovating the existing building stock, we face yet another issue Romania - financing of building new residential buildings that meet the energy efficiency criteria of the EU. On one hand, real estate developers are reluctant to build green, fearing the low demand for energy-efficient housing that come with higher costs. On the other hand, potential homebuyers are afraid of long-term mortgage loans and prefer to buy a cheaper home, exposing themselves at the risk of higher maintenance costs. Romania Green Building Council (RoGBC) has envisioned a green financing program that supports homebuyers who aim for an energy efficient, comfortable and sustainable home.
Green Homes & Green Mortgage (GHGM) by RoGBC
GHGM is a green financing program based on a sustainability certification - Green Homes by RoGBC. This certification attests that a building has a low energy consumption, provides the necessary comfort and a healthy environment to the final occupants and has a low environmental, due to the materials used and the design mode. Another important aspect of the certification is that it takes into account the location of the building. For a high score, the building needs to have access to amenities, alternative transportation, separately waste sorting infrastructure and water management. Although the initial investment cost is, on average, 10-20% higher as opposed to a regular building, green buildings compensates by having much lower monthly maintenance costs (50-80%).
Certified residential projects are eligible to our GHGM program and can apply to a Green Mortgage loan to one of the program's partner banks. Although the mortgage loan is higher for a certified green building, the low monthly maintenance costs and the lower bank rate make the "total cost of ownership" to be in fact lower as opposed to purchasing a standard home. Energy savings can be regarded as additional income for the residents of green buildings. You can find more details about the program here.
Over4 Rooftop as a case study
In Romania, there are about 30 projects that are certified or under certification so far. Among them, Over4 represents a unique renovation project of five story communist condominiums, built in the 1980s all across the country. The project proposed an extension of the living space, both horizontally and vertically - as well as a very energy efficient and comfortable "green rooftop".
The Over4 rooftop is made of a wood structure with mineral wool thermal insulation. The house is very well air-tight and has a ventilation system for heating, cooling and air-conditioning. The low-e triple glazing ensures both abundant natural light, while preventing heat loses. The project was prototyped and tested in-situ as a context-independent house in the Solar Decathlon Europe 2019 competition.
GHGM Financial Simulation
The example below showcases a financial simulation, a comparison between three newly built 70 sqm apartments, having different energy performance certificates, according to the national methodology: class B, class A and the Over4 apartment (close to passive house standard).
Although the cost of an Over4 apartment is higher as a result of the energy efficiency incorporated technologies, its monthly maintenance costs are substantially lower as opposed to a regular apartment, thus generating an indirect income of 65 euros per month. This, in turn, significantly reduces the mortgage default risk for the bank, who can afford granting significant monthly interest reductions.
Using the mortgage credit calculator of a bank enrolled in the GHGM program, turns out that the total cost of owning an Over4 apartment appears to be lower than the other 2 examples. As a consequence, the GHGM program is able to monetise the energy efficiency of a home. The GHGM program has been well received by the Romanian market. With 2 major partner banks, 25 real estate developers/investors and 30 projects already certified or under certification totalling about 6,000 homes, the program has the potential to make the building stock more greener.
Moreover, RoGBC has launched this year the SMARTER Finance for Families, a Horizon 2020 project. Its goal is to implement the Green Homes & Green Mortgage program in 12 European partner countries, with the participation and collaboration of experts from a total of 17 countries in the fields of ecological construction, sustainable energy and other related fields. More details about the program can be found by accessing this link.