Evolution of Hungarian residential energy efficiency support programmes: road to and operation under the Green Investment Scheme

Abstract

The residential sector is the largest final energy consumer and is responsible for 30% of total carbon dioxide emissions in Hungary. In order to address the general poor condition of the building stock and resulting inefficiency in energy use, from 1990 onwards, the government and local authorities initiated energy efficiency support programmes in the residential buildings sector. Furthermore, technical assistance and loan guarantee schemes by the International Finance Corporation (IFC) helped to establish a market for financing energy efficiency investments. EU funds also played a role in the modernisation of non-residential buildings. Residential energy efficiency support programmes entered a new phase in 2009 with the start of the Green Investment Scheme (GIS). While Hungary was a front-runner in establishing the legal framework for GIS, the success of early AAU sales (the financing source of the scheme) were overshadowed by reputation concerns in terms of additionality and the disbursement of funds. At the same time the GIS brought with it improved environmental integrity compared to earlier programmes in terms of monitoring and verification of results, establishing a focus on GHG emission reductions in addition to energy savings, and introducing incentives for deeper refurbishment. The aim of the paper is to provide an overview of the evolution of energy efficiency support programmes for residential buildings in the Hungarian context, pointing out prevailing problematic elements, as well as areas of improvement and good practice.