EU, Housing | New EU directive: – It's going to explode!

– It's going to explode!

That's what Otto Rapsam, known for his TV show Chinnasnaker'n, tells Netavisen.

It's called the hammer-on energy directive in the EU, he says. It will go to consultation in Norway in March. The aim of the European directive is for homes to use less energy, fully 22 percent by 2035, and for homeowners to have lower energy costs in the long term.

Most houses in Norway have energy class G, so many windows will need to be replaced and walls re-insulated in the coming years. Size goes from A to G.

– Where I sit there are 10 windows with three layers of glass. These cost NOK 26,000 each. How are people going to buy this? Someone who used to earn three times as much on Windows will now earn six times as much. The cost of artisan services will also rise. If there's a handyman with a waiting list, prices will go up, says Robsam.

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Price driver

Chinsnakers aren't the only ones who think it's going to be expensive.

Several estimates of costs have been toyed with. Homeowners estimate that it costs from NOK 500,000 to make upgrades to a home for several energy classes. Tender service Bikestart has also calculated the costs for the market. They estimate that apartments and detached houses cost between NOK 100,000 and NOK 300,000 respectively. Upgrading from energy class to F costs accordingly. But there is another aspect that comes to the fore: price growth following the fact that 1.6 million Norwegian homes will need to be upgraded over the same period.

– If the EU directive is introduced, it could have major effects on the market, says Fredrik Dahl, project manager at the tender service. Start of construction For Netavisan.

– Upgrading houses from energy class G to F will cost more than NOK 250 billion in total. There are still 6 years before the requirement is proposed to apply, which Dahl says will cost almost NOK 50 billion per year.

Today, we are renewing for approximately NOK 100 billion, says Dahl, referring to calculations by the Prognosgesenteret.

– An increase of more than 50 billion per year would be significant and would create significantly increased demand, thereby increasing prices.

Political cross-pressure

In terms of construction costs, prices have already risen sharply, explained senior analyst Bjørn Erik Øye at the Prognosesenteret.

– Otherwise there has been three to four times higher inflation in construction costs. The cost of building houses has risen sharply due to the rise in material prices.

But the directive also lays down guidelines for implementation of subsidy schemes known as energy upgrading. The Norwegian company Husiern has proposed VAT and tax exemptions for this type of investment. But that is a double-edged sword. Because that would increase demand – and thus increase price growth.

– The distance between set goals and achievable ones increases day by day, says Øye.

Construction Materials Industry:- Good news

But it's good news for everyone who sells products and services within renovations and upgrades. Industry body Norske trevarer is in favor of the directive.

– We think that this is beneficial for our industry, we think that all the strict environmental requirements are beneficial for the whole construction industry in general, and especially for those who produce wood, Norske trevarer's general manager Hilde Widerøe tells Wibe Nettavisen.

Wibe explains that the company has not calculated what the order in kroner is for the industry.

– It is useful for window manufacturers and exterior door manufacturers.

The NHO construction industry is also looking forward to life.

– Energy efficiency in buildings in Norway has great potential. The Energy Commission estimates energy efficiency for other purposes and local energy production at 25-41 TWh by 2030. Energy efficiency in buildings is a sustainable investment that can free up energy in a tight energy market, says director of social policy Kuro Huj. NHO Byggenæringen to Nettavisen.

They have a rich sandwich board of programs to implement: incentive programs for financing, easing lending regulations and continuing Enova support.

Enova support

Enova provides support for energy saving measures in homes and households, and the last state budget included around NOK 700 million for this purpose. This is a much lower amount than experts believe is needed.

The mandate for support programs is to provide support for new technologies so that they become well-known and gain a large market, and then withdraw and end the support program. They don't know if support programs will change. But one thing's for sure: they don't reveal which technologies they're going to support, because that would affect suppliers. As for the directive, they believe it will contribute to price pressure, but it depends, among other things, on which national adaptations are made when the directive is incorporated into Norwegian law.

– This will affect demand and price formation, says Tor Brekke, senior consultant at Enova to Netavision.

Sinnasnekker Otto Robsahm says that the support programs that exist today are not rigged for this order.

– Support is given to heat pumps and then the support scheme will be phased out. The amount you can get is not related to the actual costs. To achieve this, the prices of goods and services must fall, which is not going to happen. And there are many with poor houses. If they could afford it, they would have bought a high quality house.

But if triple-glazed windows and insulation materials and carpentry services are on the rise, there is good news: Norwegians already have a juicy renovation budget: 103 billion will be spent on renovations in 2022, according to the Prognosesenteret.

– These are mostly used for aesthetics, says Øye. – And these investments can be converted into energy upgrades, resulting in lower energy costs. It avoids increasing energy production and developing wind power. But it won't happen unless it works.