Energy conservation in housing sector increases population income

According to the Ministry of Regional Development, Construction, Housing and Communal Services of Ukraine, last year 40 million UAH, including over 6 million UAH in loans which were received by 11 Apartment Building Co-Owners Associations (ABCOA), were provided for implementing energy saving measures, capital overhaul and maintenance of housing and communal services (HCS).

Experts say the establishment of an encouraging energy efficiency environment in HCS should be one of the main tasks of the government in the next few years. They also point out that 

Ukraine currently has one of the world’s highest levels of energy consumption per unit of GDP.

Energy conservation in HCS can be one of the main sources for increasing the income of the population, the Information-analytical Bulletin of the Cabinet of Ministers of Ukraine says.

Energy efficiency in Ukraine is three times lower than the average in developed countries. Energy efficiency in Ukraine is particularly low in the area of HCS. For example, the energy intensity of the housing stock of Ukraine is 2–3 times higher than that in EU countries.

According to the Ministry of Regional Development, over 100,000 apartment buildings in Ukraine (80% of apartment buildings in the country) are in need of immediate thermal modernization, which is one of the ways to ensure energy conservation. More than 200 billion UAH is needed to support implementation of energy saving measures in apartment buildings. But this expenditure can completely pay for itself in 4–5 years, experts stress.

Experts believe that it would be impossible to complete thermal modernization only using state and local budget funds. It can be feasible only if we succeed in attracting private investment, especially from the residents of apartment buildings. And for that we must use all available mechanisms of budgetary, fiscal and monetary policy.

Analysts point to European experience, and propose the giving of tax relief to apartment owners that are involved in the financing and co-financing of energy saving activities in their buildings.

Experts insist that comprehensive energy efficiency actions in HCS may be only feasible in case of real reform. The project is dead without responsible owners of apartment buildings that would be interested in energy conservation measures. Also, it is revealing that the number of heat meters installed in apartment buildings is extremely low. The reason for that is the absence of owners who would be interested in recording the real volume of heat entering the building. And the heating companies are not interested in that either, because the absence of accounting allows them to significantly exaggerate the actual supply of heat.

It is also important to de-monopolize the heating market. Experts insist that competition is a necessity.