On French Energy Poverty Day, Reclaim Finance and the YouGov Institute publish the results of a survey conducted in four EU countries (1) that highlights the role of building renovation in meeting the expectations and fears of Europeans, and the obstacles and solutions to encourage its deployment. The survey reveals that paying electricity and heating bills is an immediate concern for most Europeans surveyed, especially for low-income households and large families. Home improvements such as better insulation are a popular solution to this problem, but the costs remain a major obstacle. To remove this obstacle, Europeans support both the deployment of subsidies and interest-free loans. They are calling on the European Central Bank (ECB) – which is responsible for managing inflation in the euro zone – to play its part by supporting the energy transition.
Electricity and heating bills: households are worried
Half of the respondents in the survey think they will have difficulty paying their electricity bills and/or heating their home this winter (2). The lower the household income, the higher the proportion of people fearing these difficulties. More than 70% for households with an annual gross income of less than 15,000 euros, 60% below 25,000 euros, and less than 50% above 35,000 euros fear they will have difficulties. Similarly, bigger households are more likely to be worried. While less than half of households with 1 to 2 people think they will have difficulties, this increases to 55-56% for households with 3 to 5 people, and 64 and 74% respectively for households with 6 and 7 people.
The situation is similar in France. 48% of French respondents fear not being able to heat their homes or pay their bills (3). This increases to 62% for households with an average gross annual income below 20,000 euros, 52% between 20,000 and 40,000 euros and 33% above 40,000 euros. It increases from 57% to 87% when the number of people in the household increases from 4 to 7, with an average of 76% for households with more than 5 people.
Massive support for building improvements: a must have
76% of respondents agree that the public authorities should provide significant support for building improvements to respond to the energy crisis and fight inflation. This percentage is 83% among people who fear they will struggle to pay their bills and/or heat their home this winter. It also remains very high, at 72%, among people who are less concerned. Overall, a significant majority of respondents support renovation, regardless of location, income or household size.
In France, 82% of respondents support major public intervention for building renovation (4), including 86% of people who fear difficulties this winter and 82% of people who do not have this fear.
Financing: the main obstacle
The question of financing clearly appears as a major obstacle to building improvements: 76% of respondents consider that the cost is too high.
Beyond the total cost, 36% and 37% respectively consider the cost of borrowing and opposition from other parties as problems. The cost of borrowing is the second most cited problem in France (34%), Italy (43%) and Spain (45%). In addition, the loan rate is more likely to be identified as a problem by those who fear difficulties this winter (5).
The obstacles to renovation identified by respondents are consistent with their support for solutions to incentivise it. Public financing, the simplification of assistance and access to interest-free loans are most supported by the respondents (6). Investment and public subsidies and interest-free loans are the two levers most cited by those who say they are facing difficulties (7).
Interest-free loans are the most supported option in France and the second most popular in Germany and Spain. The simultaneous support for public financing, simpler grants and interest-free loans suggests that respondents want a combination of these financing levers. Such solutions are also supported by the European Unlock coalition and by groups involved in the Day against Energy Poverty held on November 24, 2022 in France.
The European Central Bank (ECB) must act
For the survey respondents, the ECB has a role to play in providing an answer to the financing difficulties and the current crisis. Indeed, 76% of them want the ECB to support the reduction of energy consumption and the transition to renewable energies, notably by facilitating the renovation of buildings. ECB intervention is supported by a large majority of respondents in all four countries, even in Germany, where respondents were the least supportive of government intervention and financial aid for renovation (8).
Agreement on the need for ECB intervention is even stronger among those who fear difficulties this winter (9). In the same way, people who support significant public intervention to support renovation, also support the intervention of the central bank (10).
82% of people who believe that the high cost of borrowing hinders building renovation support the involvement of the ECB (11). And the majority of people who support the intervention of the ECB also support zero interest loans (12).
In conclusion, the responses of Europeans reinforce the demands of the numerous European and French organisations that see building renovation as a central axis in the fight against fuel poverty. Like these organizations, Europeans think that such building improvements are difficult to finance and require better support mechanisms, including easily accessible public subsidies and interest-free loans. They want to see ambitious public intervention from European governments and from the European Central Bank (ECB). Europeans clearly identify the ECB as responsible, giving particular importance to the demand for financing operations allowing the distribution of zero-interest loans for building renovation throughout Europe, as expressed by Reclaim Finance and the Unlock coalition (13).