Renovating for the comfort of all

From planning to financing, from adding value to the property to controlling costs, Bryan Ferrari and his three guests highlight a shared ambition: to make the energy transition accessible, practical and sustainable for everyone. And they're doing it through the Spuerkeess energy coach.

On the Spuerkeess side, Alexandra Kugener is a Housing Advisor and Michel Marx is Team Manager of the Commercial Lending division. Arnaud Duban is Director of the Energieagence.

Bryan Ferrari: Today we're talking about housing in Luxembourg, but also about a partnership between Spuerkeess and Energieagence. So, to begin with, what is Energieagence?

Arnaud Duban: Energieagence offers advice on the energy transition. We range from support to decarbonisation. It's advice, special studies, to help individuals and businesses make the right decisions.

What is the link with Spuerkeess and why work together?

Michel Marx: Our partnership goes back a long way. For a long time, we used a simulator set up by Energieagence. Then, at some point, we thought we could deepen this partnership and use their training. We decided to train our advisers specifically in energy renovation work. That's when the idea of the Energy Coach was born.

I don't suppose that every advisor has become an Energy Coach..

Alexandra Kugener: No, we're talking about housing advisers. Those who work in this field. The idea is quite simply to provide even better, more in-depth advice that is tailored to the needs of our customers and that will provide them with the best possible support in their renovation projects. The Energieagence training courses give us a basic understanding of the support available, and I think that having access to even more information is very much appreciated by our customers.

What happens in practical terms for the customer? What will the housing advisor say or do about my questions and needs?

Kugener: What we see in the branches, as housing advisers, is that customers are already very, very well informed, contrary to what you might think. Often, people already have a very precise idea of what they want to do and have even contacted an energy advisor to be as prepared as possible. They just come to see us to find out more about the financial aspects.

L'Energieagence supports us as a trainer, but also as a relay point.

Duban: Absolutely. With the experience we've gained in the various areas of energy transition, we've developed a training programme for Spuerkeess housing advisors, which covers a number of topics related to energy transition and renovation. Technical aspects are covered, so that advisers have a more in-depth understanding of the issues. We'll be looking at the energy performance of insulation, as well as issues relating to the production of renewable energy and the replacement of boilers with heat pumps, for example. From a technical point of view, all these subjects will help to increase the skills of our housing advisors. Then, in addition to this technical dimension, we combine it with a more financial dimension; we have a fairly exhaustive knowledge of all the subsidy mechanisms available today. In this way, we can provide added value that is shared with bank advisers. These two elements will enable the housing advisers to provide a response and build a more robust case on behalf of their own customers.

So the customer comes to the branch, is guided by the housing advisor… and then what?

Kugener: There are two types of customer. Those who come to us with a concrete project and who have already been in contact with the energy advisor, and those who come to us to find out about their financial envelope. They give us their maximum budget and we try to fit the different items into it. As we've been trained, we have the basics, we know what simulators and grants are available, but for the second stage, we'll send the customer to an energy adviser. The housing advisor is there for the financial side, the energy advisor for the technical details.

Duban: Absolutely. That's where the synergy comes into its own. At that point, we're in a position to take over from the customer and provide them with a layer of skills and knowledge on energy advice in relation to their renovation project. In this context, we will visit the property to see for ourselves the state of the building and to be able to make a certain number of recommendations on the types of insulation materials, the thicknesses that need to be installed, the type of heating system that needs to be replaced, and so on. We'll be looking in a little more detail at the technical aspects of energy renovation, while also giving some idea of the scale of the work involved.

Do you refer people to carry out the work?

Duban: At the moment, we don't refer to craftsmen or tradesmen who are capable of carrying out the work. That's something we're considering. But that would be the next step.

Interest in energy renovation doesn't just appear out of the blue. The framework that sets the tone is the PNEC (Luxembourg's integrated national energy and climate plan for the period 2021–2030). What's more, for the bank, cleaning up its customers' property stock is a positive thing. Can you explain this factor to me?

Marx: I don't think the energy transition is just for engineers and architects. I think that everyone has to make their own personal efforts. We're talking about climate neutrality by 2050, and I think the bank can be a real catalyst. By helping our customers to make energy changes and finance renovations, we can speed up the energy transition. That's why we're trying to do our best to facilitate the transition.

Are we already seeing a price difference between properties that have been renovated and those that haven't?

Kugener: Yes, we can really see a difference. A property with good energy performance sells for more because the buyer no longer needs to carry out major works, unlike houses that are in a very low energy envelope. The scope of the work will be much greater, and customers buying homes with a low energy passport will also have to be wary of electricity costs and so on.

So what are the main obstacles, technical or psychological, that prevent customers from embarking on an energy renovation project?

Duban: What's often lacking is a vision. What impact is it going to have on my energy bill, on my consumption? We don't have a precise enough simulation of how much we're going to save on our energy bills at the end of the month or the end of the year. That's the stumbling block, especially for larger-scale projects that combine insulation with heating replacement and the addition of photovoltaic panels or electromobility terminals. When you start looking at projects that are a little more complex, it's important to be aware of the predictability and savings you'll be able to generate on your electricity bill.

Let's imagine we're on a tighter budget. Is there an order to follow, like starting with the facade before the windows… or do you have to take the whole package straight away? How does it work?

Duban: It's a big debate… There's an approach that says that the first thing to do is absolutely insulate, because when you insulate, you need less heating and so you're going to mechanically reduce your need for heating. The other debate is rather to work on existing consumption and ultimately reduce losses by adjusting temperatures and replacing heating and ventilation systems. That's optimisation. So these are two different approaches. From my point of view, they're equally valid. Ideally, of course, you need to combine the two approaches if you really want to improve the overall efficiency of the property, which will then lead to a reduction in consumption. But that's not all: as we were talking earlier about the energy classes of properties, we'll automatically see an increase in the value of the energy passport, which will gain in efficiency class. This also translates into an increase in the value of the property at the end of the day.

We also have different financing plans. Some work is covered by a personal loan, others by a home loan. How does this work?

Marx: There are two different possibilities. The traditional housing loan, which everyone is familiar with, but also the eco-loan. The eco-loan was designed for small-scale energy projects. If I want to replace my heating, if I want to do some minor work on my facade or my roof and I'm under €100,000… we have a loan that's really attractive in terms of interest rates.

Kugener: The other advantage of this eco-loan is that it can be taken out for ten years.

Marx: In terms of financing, I might also add that the government really does encourage people to carry out energy-efficiency work. As a bank, we do a bit of the same. If customers carry out energy-related work using Spuerkeess financing, they can take advantage of the eco-bonus. This means that if I've carried out work that has resulted in improvements to my energy passport, I can receive additional remuneration via my bank. This shows that we really want to support the energy transition and the customer in their efforts.

So in short, we're offering customers a point of entry, a point of contact and a point of exit, through which we can refer them to the relevant experts so that they don't find themselves alone in a regulatory and financial jungle?

Duban: That's right, and what's also important is that it's tailor-made.

We now know how the process works. But do the customers come back to us with feedback? Do we know how the market feels? Does everything run smoothly once the loan has been granted?

Kugener: It's difficult to say because we're not the ones who end up paying for the aid and subsidies. So we're not the first point of contact, the people to whom the information goes. We're just the financial contact who tells the customer whether their projects are feasible or not. That said, if we don't get any feedback from the customer, I take it that everything has gone well.

Correct me if I'm wrong, but I wonder if it's a good thing that transition depends on subsidies. Aren't we in danger of seeing a reverse trend if the government ever decides to end these subsidies? Why is it so difficult to tell customers that, even without the subsidies, in the long term a transition like this is really worthwhile?

Kugener: I also think that awareness-raising should go hand in hand with subsidies. We've seen that the subsidies are the incentive that pushes people to do this work, because they see a direct gain. Carrying out these renovations increases the value of the property, but anyone who decides to renovate their property is not necessarily doing so with a view to selling it the next day. So it's true, especially for solar panels, photovoltaic installations… I think that if the subsidies were abolished, there would be fewer applications. It's a shame.

Marx: I think it's also always a question of the price of energy. How much will we really save if we carry out this work? So it's up to us to make the right calculations and show that it has a real long-term impact. That's why it's right to talk about awareness-raising and education. You don't just renovate your house to sell it, you also renovate it to make it more comfortable.

From what you've told me, I get the impression that it's a win-win situation at every level. The climate wins, the bank wins because the customer increases the value of their assets and the customer wins because they pay fewer bills.

Marx: Yes, exactly.

Finally, how do you see the next developments in this area? What are the next steps? What can we predict?

Duban: Demand is only going to increase. The stock of existing buildings is greater than the stock of new buildings, with energy classes that are not as good as those required by the regulations. So the trend is bound to be towards a greater volume of activity in building renovation and energy refurbishment. Demand is only going to increase. So it's important to have intermediaries in the banking sector to be able to provide information, because this renovation will inevitably require financing. That's why the prospects here are very, very interesting and important. So we need to play the multiplier effect card to the full, through bank advisers who can reach out and have a wider reach than just an Energieagence standing on its own.

As a bank, we're there to help our customers through these times of change and transition, but we're also in a position to support them according to their specific needs.

Kugener: We're also in a period of change, of major climate change. These are issues that come up regularly, if not every day. So people are starting to be sensitive to this issue. If we want to do something about it, the answer is to renovate, also to comply with the standards that are being or will be imposed in the future. What's more, I think that standards will continue to evolve and that everyone will be obliged to adapt. That said, customers will also be doing this for their own comfort. Because I think that everyone wants to be in a house that they like, that's comfortable. So if it also makes the world a better place, I think everyone will want to move in that direction.