Willingness to Pay for Renovation of Multi-Flat Buildings and to Share the Costs of Renovation

Abstract

The paper deals with the problems linked to the energy renovation of multi-apartment buildings and developed a case study in Lithuania with the aim to assess the household’s willingness to pay for energy renovation and to define the main barriers preventing the households from making decisions to renovate their apartments in residential buildings. Energy renovation provides huge energy savings and greenhouse gas emissions reduction potential and though policies and measures exist to promote large scale energy renovation, there are still many barriers and the pace of energy renovation is still very slow, especially in new EU member states and former Soviet Union members. These countries have inherited old, energy inefficient residential buildings from their Soviet past, and their inhabitants are locked in energy poverty because of their inability to renovate their apartments. This paper analyzed the current situation in the selected country and presents the results of a case study on willingness to pay (WTP) for energy renovation in Lithuanian residential buildings. The survey of 104 Lithuanian households living in unrenovated multi-flat buildings was conducted. The 39 multiple choice questions were asked in order to define the main barriers and drivers of energy renovation. The main results of this pilot study indicated that there are several important organizational and economic barriers for energy renovation in multi-flat buildings and current policies and support schemes have not addressed them in a proper way. The high heating bills and low heat comfort in apartments were the main drivers of energy renovation decision-making for households, however, inadequate state support, reluctance to take a loan due to low income, and inability to make collective decisions on renovation due to the lack of cooperation and housing association were the main barriers that prevented them from this step. New innovative schemes like the Energy Service Companies ESCO model with consolidated billing can be applied to address the identified barriers.