EU money for home renovation does not achieve high energy gains

EU money for home renovation does not achieve high energy gains

€43 billion from the EU’s COVID cash pot earmarked for the energy-efficient renovation of residential buildings
EU support does not favour renovations with the biggest energy savings
The cost-effectiveness of renovation measures is not ensured

EU-funded renovation measures from the COVID recovery fund – the Recovery and Resilience Facility (RRF) – delivers only moderate energy savings. This is the main conclusion of a report published today by the European Court of Auditors (ECA). Easy-to-realise projects are largely financed to the detriment of more profound renovation work which would yield greater long-term results. Without better targeting, a clearer focus on results, and more intensive monitoring, future spending may fall short of the EU’s energy and climate goals.

Europe cannot meet its climate and energy goals without more efficient buildings. Yet two thirds of the energy used for heating and cooling still comes from fossil fuels, and nearly three quarters of buildings across the EU are still energy-inefficient. Renovating existing homes is therefore key to reducing energy consumption and cutting emissions, especially ‘deep’ renovation projects with more than 60% energy savings which are essential for creating highly efficient building stock.

“EU renovation funding for private homes should go to those projects with the greatest potential for cutting energy use. However, we saw all too often that RRF funds went where they were easiest to spend, not where they would make the biggest difference”, said Nikolaos Milionis, the ECA Member responsible for the audit.

In most cases, faster and simpler renovations are favoured. Indeed, audit visits in member states showed that selection criteria are not used to rank projects by their expected impact. This reduces the chances of giving support to projects that could save the most energy, or to households in the greatest need. In other words, the money – EU countries plan to spend up to €43 billion – is often spent quickly rather than strategically.

This approach can also create a two-fold problem, the auditors warn. First, moderate renovation measures may lock buildings into lower performance levels for years, making future upgrades even harder and more expensive. Second, this probably leads to investments that are not the best choice for long-term decarbonisation. The auditors actually found that simple measures – such as replacing windows or installing solar panels – attract strong demand, while more energy-efficient construction work is less common.

The auditors are also critical of how the results are checked. Across the EU, most renovation measures funded by the RRF focus on outputs, such as the number of homes renovated or the size of renovated areas. Very few seek actual results, such as lower energy consumption: of the 111 renovation measures examined, only three included energy-saving targets.

To estimate energy savings, EU countries are encouraged to use energy-performance certificates. However, the auditors do not regard this information as reliable enough or comparable, meaning that it is unsuitable for proper monitoring. One reason is that certificate estimates do not match real energy consumption, which also depends on how people heat, cool and use their homes. Another reason is that the certificates frequently contain errors, leading to savings being under- or over-estimated.

Lastly, the report points to a lack of cost-effectiveness considerations, which makes it difficult to detect poor value for money and make corrections during project implementation. The auditors’ analysis, which covers different types of interventions, buildings and policy choices, shows that the cost of saving one unit of energy varies greatly between the member states they reviewed in greater detail. In this respect, the Italian ‘Superbonus’ scheme, which alone is expected to receive close to a third (€14 billion) of all RRF dedicated funding, is a particularly striking example. Costs per unit of energy saved turn out to be almost four times higher than initially expected. In addition, the scheme covers up to 110% of renovation costs, meaning that public support can exceed the actual cost. For the auditors, this clearly does not represent a cost-effective use of EU funds.

Background information

Residential buildings account for about a quarter (25%) of energy consumption in the EU. Since 2021, the Recovery and Resilience Facility – which requires 37% of funding to be dedicated to climate and energy targets – has offered member states the opportunity to boost residential energy-efficiency improvements. Furthermore, in its proposal for the 2028-2034 EU budget, the European Commission has included the option to continue to finance such renovations.

Special report 20/2026, “Improving the energy-efficiency of private homes with the RRF: broad financial support, but weaknesses in the foundations”, is available on the ECA website, together with a one-page overview of the key facts and findings. The report examines whether RRF investments and reforms contribute to the energy efficiency of residential buildings in an efficient and cost-effective way. Renovation measures and schemes in Belgium, Cyprus, Italy and Lithuania were subject to particular scrutiny to obtain audit evidence.

Contact:

ECA press office: press@eca.europa.eu