IHRS: the key to unlocking deep renovation finance Subtitle: How tailored financing and IHRS can break market barriers in Europe

Introduction

Despite the undeniable benefits of deep home renovations—lower emissions, better health, improved comfort—the pace of adoption remains far too slow. Financial barriers, lack of trust, and fragmented governance continue to hinder progress. The recent EU Peers policy paper sheds light on how to turn this around: by promoting innovative financing, leveraging Integrated Home Renovation Services (IHRS), and establishing supportive policy frameworks that make renovations accessible and impactful. These recommendations form a practical and scalable strategy to turn energy efficiency into the new norm—across all income levels and housing types.

Europe’s renovation challenge

Residential buildings are among the largest sources of energy consumption and carbon emissions in Europe. However, deep renovations—those that achieve nearly zero-energy standards—remain the exception rather than the rule. The barriers are complex:

• Limited demand due to low homeowner awareness and high upfront costs
• Investor uncertainty stemming from inconsistent quality and weak data
• Poorly tailored financial instruments that don’t align with the reality of long-term retrofit paybacks
• Exclusion of vulnerable groups, often left out of standard financing offers

The EU Peers report identifies these pain points and proposes targeted recommendations to make the renovation wave both effective and inclusive.

Financing is not just about loans

Financial instruments alone are not enough to trigger demand for renovations. Even in countries with subsidies or interest-free loans, uptake remains limited. Many homeowners still face barriers: high upfront costs, unclear value, complex procedures, or simply the fear that the promised savings won’t materialise. For low-income or highly indebted households, traditional financing isn't even an option.

At the same time, banks and public lenders struggle to adapt. The technical complexity, fragmented data, and lack of standardised quality assurance make it difficult to design offers that are low-risk, affordable, and scalable.

This is where IHRS can change the game.

Policy matters

To make this vision a reality, regulatory support is essential. Key actions include:

• Enabling Minimum Energy Performance Standards (MEPS) to create predictable demand
• Promoting tax incentives linked to measured outcomes, encouraging quality over volume
• Establishing a monitoring and verification body to ensure transparency, accountability, and alignment with climate goals

These measures help create a stable, investable market where homeowners, banks, and governments can work in sync.

IHRS as financing enablers

IHRS can serve as a powerful link between project developers, homeowners, and the financial sector. Their added value comes from three main roles:

• Structuring financeable projects
  By supporting homeowners through audits, design, and procurement, IHRS ensure technical soundness and cost transparency. This creates a robust pipeline of renovation projects with predictable cashflows and outcomes—exactly what financial institutions need to work with.
• Ensuring compliance and reporting
  Banks now face stricter disclosure requirements under frameworks like the EU Taxonomy and Sustainable Finance Disclosure Regulation (SFDR). IHRS can take on the burden of data collection, quality assurance, and documentation, providing lenders with verified, standardised information on energy savings and performance indicators.
• Facilitating tailored financing
  IHRS can help match homeowners with the right financial product—be it a long-term property-linked loan, an on-bill repayment scheme, or a subsidy-and-loan blend. They can also work with public authorities to design inclusive solutions for vulnerable segments, such as 100% subsidised renovations or risk-sharing guarantees.

What the financial ecosystem needs

For deep renovations to scale, financing must be affordable, inclusive, and aligned with real performance. Several instruments already show strong potential, especially when implemented in collaboration with IHRS:

• Long-term, property-secured loans: Financing models that link repayment to the property—not the individual—allow costs to be spread over 15–20 years with low monthly instalments. These loans can transfer to new owners upon resale, reducing financial risk for households. IHRS can support this by ensuring the technical quality and compliance of projects, and by providing banks with the verified data needed for credit decisions.
• Performance-based financing mechanisms: Energy Performance Contracts (EPCs), enhanced EPC+ models, and on-bill financing tie repayment amounts to the actual energy savings achieved. These instruments shift risk away from households and toward the implementing consortium. IHRS help ensure that savings estimates are robust, that works are executed to standard, and that monitoring and verification protocols are in place.
• Blended finance solutions for underserved segments: Households in energy poverty often require a mix of grant funding and loan guarantees to cover renovation costs. Public guarantees can de-risk loans for financial institutions, while subsidies can close affordability gaps. IHRS can play a central role in identifying eligible beneficiaries, packaging funding offers, and accompanying projects through implementation and reporting.
• Performance-linked tax incentives: Annual rebates to project integrators or consortia—including IHRS—that achieve verified performance targets (e.g. energy savings, user satisfaction, regulatory compliance) can help scale up market activity while ensuring quality. IHRS are ideally positioned to aggregate performance data across projects, manage portfolios, and ensure documentation meets public reporting requirements.

Enabling banks to act

To meet their green finance obligations, banks need assets that are not only technically sound but also compliant and easy to monitor. IHRS offer a ready-made infrastructure to support this transition—especially in local, multi-bank markets where adapting internal systems can be costly and slow.

Through IHRS, banks can outsource the complexity of compliance and tap into a pipeline of renovation projects already aligned with EU regulations. This opens the door to new green lending products, lower refinancing costs, and greater confidence in project outcomes.

Conclusion

Scaling up home energy renovation will not happen through public subsidies or bank loans alone. It requires a bridge—an actor capable of translating policy goals, technical requirements, and homeowner realities into structured, finance-ready projects. Integrated Home Renovation Services (IHRS) can be that bridge.

With the right policy support, IHRS can unlock inclusive, performance-based financing solutions that leave no household behind and provide the trust and compliance the financial sector needs. To make deep renovation the default—not the exception—policymakers, cities, and financial institutions must align around this model. The time to act is now.

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