TOP 15% study: buildings in the Czech Republic are inefficient

A large number of buildings in the Czech Republic are extremely energy-inefficient. This leads to higher operating costs for their owners, operators or tenants. If the owners also want to obtain bank financing for trading these properties in the future, they should invest in renovation.

These are the findings of the first ever comprehensive probe into the true state of the domestic real estate stock from the point of view of its energy efficiency. This unique study of the 15% most-energy-efficient buildings (TOP 15%) was prepared by CEVRE Consultants and EnergySim on the initiative of Česká spořitelna. It was sponsored by the Czech Banking Association (CBA), the Czech Green Building Council (CZGBC) and the Ministry of Industry and Trade (MIT).

Owners of real estate gain the opportunity to check how their building compares to the market as a whole. All they need to do is to know the energy class of the building and use the data available in the study to see if their building is energy-efficient or if they can reduce its energy consumption and their operating costs.

The published materials enable banks and investors to better provide advice and financing for projects aimed at improving the energy efficiency of buildings.

What makes the study unique?

The TOP 15% study provides comprehensive data on the energy efficiency of the real estate stock in the Czech Republic for the first time ever. It is based on analysis of non-public data collected by the Ministry of Industry and Trade (MIT) in the ENEX energy label database. Until now, only partial information on the number of buildings recorded by the Czech Statistical Office was available on the market. The TOP 15% study maps the entire domestic real estate stock, which includes around 3 million buildings.

The TOP 15% study sets the standard for analysis of data from the ENEX database. It sets threshold values and rules for the 15% most-energy-efficient buildings. Membership in this group is expressed in terms of the operational need for primary energy from non-renewable sources. Buildings built before 31 December 2020 were included in the analysis in accordance with the requirements of EU Taxonomy.

The TOP 15% study provides a simple guide to comparison of a building’s energy efficiency as compared to the market as a whole. The further a building is from the 15% threshold of the most-energy-efficient buildings, the more the owners need to be vigilant – in the coming years they should consider improvement of buildings to ensure that they meet the sustainable building requirements defined by the EU Taxonomy. Otherwise, owners of buildings like this could find their refinancing options more complicated.

„The study revealed that we have a very high percentage of extremely inefficient buildings here, reconstruction of which needs to be focused on urgently with the support of European subsidies,“ stresses Matúš Púll, Sustainability Manager at Česká spořitelna. „The urgency stems not only from the impending European regulation which will prevent banks from financing trading of these properties, but especially from the excessive costs which the owners and operators of these buildings have to pay. For example, the average family house has an incredible value of 387 kWh/m².a in the assessed parameter. Due to the energy efficiency and the financial demands of operation, we will gradually have to refurbish them all to at least the level of a C label, and we should think about how to achieve this.“

„There is often talk of strict requirements for new buildings, but the real challenge is the renovation of existing buildings, which, according to the study, have huge potential for savings. The advantage of renovation over new construction is also that we save on building materials and the emissions associated with them,“ adds Jiří Cihlář, co-author of the CEVRE study.

Radek Šalša, Spokesman for the CBA, said that the study provides banks with a uniform guide on how to assess the state of the real estate market. „Of course, it will be up to each bank to decide how to proceed in specific cases,“ he stresses.

„The TOP 15% analysis will constitute the basis for further strategies which will set the trajectory for the gradual renovation and decarbonisation of the building stock,“ said Ján Čiampor, Director of the MIT Energy Efficiency and Savings Department. „Within the framework of its Taxonomy and ESG working group, the CZGBC is currently preparing an interpretation of the taxonomy for the building sector. The council participated in the revision process of the TOP 15% study and plans to use the definitions and the building compliance assessment procedure in its interpretation,“ says Simona Kalvoda, Executive Director of CZGBC, in conclusion.