ING has released a report highlighting the pressing need to advance the energy transition within Spain's housing market. The bank emphasises the urgency of implementing measures to improve energy efficiency in the residential sector, particularly via public incentives and raising public awareness, drawing on international success stories, such as those in Italy and the United States.
According to ING, "fewer than 1.1% of residential properties hold an A or B energy efficiency label, while over 80% of buildings are rated E, F, or G, placing them among the least efficient." Furthermore, the low rate of home renovations– just 0.14% in 2022 – underscores the urgent need for measures to drive the energy transition within the residential property sector. ING describes this as "a crucial area for advancing the ecological transition."
The study recommends several actions to achieve this goal, including removing bureaucratic barriers to ensure citizens can access grants for home renovations quickly and easily. It also highlights the importance of designing a clear roadmap for implementing the Energy Performance of Buildings Directive (EPBD).
The study also proposes analysing successful international initiatives that could inspire similar measures in Spain. Examples include Italy's Ecobonus, which offers a 110% tax deduction for energy efficiency improvements in flats or single-family homes and the Property Assessed Clean Energy (PACE) programme in the USA, which leverages public-private funding amounting to up to $2.5 billion.
"These strategies prove that it is possible to finance energy improvements through the savings they generate, boosting property values and promoting job creation – all without increasing homeowners' debt," the bank states.
In fact, renovation costs remain one of the primary barriers preventing households from improving energy efficiency, compounded by insufficient public support.
A survey conducted by ING reveals that the high cost of renovations and insufficient government support are among the key reasons households have not taken steps to improve their homes' energy efficiency. "32% of Spaniards cite these factors as the main obstacles, while 19% admit they are unsure about which measures to implement. Furthermore, nearly half of respondents (47%) believe the government should realign its budget priorities to focus on incentives for energy efficiency," the report explains.
To address this issue, the Dutch financial institution calls for collaboration between governments, financial institutions and investors to strengthen the sector and support the achievement of decarbonisation goals.
Another key recommendation is the creation of a dedicated financing framework for neighbourhood communities, recognising their significant role in Spain's urban areas.
In this context, the bank notes that Spain has fewer single-family homes compared to neighbouring countries and highlights that "this group, which presents a high-risk profile for financial institutions when providing responsible credit, plays a crucial role in collective decisions such as installing solar panels or thermal insulation."
The bank concludes that "it would be beneficial to propose a common sectoral framework tailored to this group, alongside public incentives, such as tax breaks or public guarantees, to facilitate the approval of loans by banks through more favourable risk assessments."
Tax deductions for rehabilitating homes and buildings have been extended
At the final Council of Ministers of 2024, held on 23 December, the Spanish government announced the extension of personal income tax deductions for energy improvement works in homes and residential buildings. These deductions range from 20% to 60%, depending on the type of work, with a maximum of €15,000 per property.
These tax deductions, officially published in the Official State Gazette, will remain in effect until 31 December 2025. They have already been applied to 122,862 projects, resulting in savings of €319.7 million in personal income tax, according to data from the Ministry of Housing and Urban Agenda (MIVAU).
