How can local governments push for ambitious energy-efficient renovation of privately owned million-program houses?

Malmö University

How can local governments push

for ambitious energy-efficient

renovation of privately owned

million-program houses?

-An exploratory case study on the Bygga om Dialogen

project in Malmö, Sweden

Author: André Landwehr

Master Thesis in Built Environment (15 credits) Tutor: Peter Parker

Title: How can local governments push for ambitious energy-efficient renovation of privately owned million-program houses?

Author: André Landwehr

Master Thesis in Built Environment (15 credits) Tutor: Peter Parker

Spring Semester 2013

Sustainable Urban Management Examinator: Per-Markku Ristilammi

Abstract

How can local governments in the absence of national regulations or incentive schemes motivate private owners of post-war mass-housing for investments into ambitious retrofitting for energy efficiency? The million-program houses’ lifecycle currently makes renovations necessary and this would be an excellent opportunity to realize an upgrading of their energy-efficiency status. Private owners do however show no inclination to do so. An intertwined array of barriers towards energy-efficient renovation is explored in this study, while it seeks to find out which new drivers are needed to overcome these barriers and create an intrinsic motivation for the owners to undertake the anticipated investments. In an exploratory case study, these points are investigated in the context of the exemplifying case of the Bygga om

Dialogen project in Malmö, Sweden.

Bygga om Dialogen, is reframing the situation of investments into energy-efficiency in a

broader socio-economic context and thrives to create new drivers pushing the owners to undertake the investments via the tools of strategic niche management and reflexive

governance. This study explores how a strategic niche management and reflexive governance can be used to motivate a variety of stakeholders to scrutinize and reconsider their

assumptions of the renovation-business-case and how this can stimulate the owners to actively contribute to the establishment of a new, innovative, cross-sectoral approach seeking to realize energy-efficient investments in the context of holistic sustainable development in the neighborhood of Lindängen. Additionally it is explored how strategic niche management can be used to deal with the contextual, strategic and institutional uncertainties that the established network is facing. Ideally the vision of mutually realizing energy-efficient renovations as part of an inclusive socio-economic upgrading of the neighborhood, could act as a building block and exemplifying case for similar neighborhoods nationwide- or even all over Europe.

Acknowledgement

Completing this master thesis also means putting an end to one year at the university in Malmö.

A wonderful year that would have not been possible without the possibility of keeping my job at the DAA Deutsche Auftragsagentur GmbH in part-time that was joyful and amiable despite the long distance and communication via Skype. Thanks to the DAA for making this possible. Even less would it have been possible without the support and patience that my family gave to me. You gave so much to make it possible for me to spend this year here. It is overwhelming to know that I can always count on your support. Thank you for all your help!

Special thanks do naturally go to Peter Parker who has been the best tutor I could have imagined. It was fun to brood over the discovered complexities and intertwined problems together. Your enthusiastic support and concrete feedback was a great help and motivation. Further I want to express my gratitude to all the interviewees that took the time to answer a big array of questions and to provide deep and practical insights into their work and

understanding of the issue. I learned a lot from this and I hope that in return the copy of the thesis can be of use also for your work. Tack så mycket!

Table of Content

Background ... 4

Retrofitting the million-program houses – A multi-level challenge for sustainability ... 4

Problem Formulation ... 4

Research Questions ... 5

Theoretical Background ... 6

Method ... 7

The relation of method and theory ... 9

Limitations ... 9

Theory ... 10

Barriers and drivers for investments into retrofitting for energy-efficiency ... 10

How can local governments create new drivers? ... 12

Presentation of Case ... 16

Analysis and Discussion ... 19

Barriers towards energy-efficient renovation in Lindängen ... 19

(Missing) Drivers for energy-efficiency investments ... 26

New drivers with Bygga om Dialogen ... 27

Dealing with Institutional and strategic uncertainty ... 33

Open issue in Bygga om Dialogen ... 35

Conclusion ... 36

Background

Retrofitting the million-program houses – A multi-level challenge for sustainability

From an environmental sustainability perspective urban settlements are, due to their density in population and infrastructure, responsible for a large fraction of the worldwide energy consumption and CO2 emissions. A large fraction of this energy is consumed by a city’s buildings and again most of this energy is used on heating purposes (Bigalke et al 2012). The Swedish building stock accounts for about 30% of the overall national energy demand, with the houses build during the million-program accounting for a major fraction of this consumption (Gerdin & Hammarberg 2010). Facing global environmental issues such as declining resources and climate change it is essential to greatly reduce the energy demand of these buildings, for example by retrofitting a better insulation (Janson & Wall 2012). Research shows that the energy saving potential from making existing buildings more energy efficient is greatly exceeding the potential of savings from sharpening rules for new buildings (Discher et al 2010). While the Swedish government aims for a reduction of residential energy use by 50% until 2050, the current speed of retrofitting needs to be substantially increased and the window of opportunity of due renovations of the building material has to be utilized (Warfvinge et al 2012). Hence, there is a need to stimulate building owners to make long-term investments to improve the energy efficiency of their buildings. While energy-efficient retrofitting is urgently needed many obstacles to ambition and practical realization can be identified, from financial, organizational and inter-organizational perspectives (Hoppe 2012) Additionally the endeavors for more environmental sustainability through increase of energy-efficiency are often discussed to cause negative consequences from a social sustainability point of view, such as gentrification and displacement (Färber & Flecken 2011). Thus the renovation of the million-program houses in poor neighborhoods is a particularly wicked problem, when it comes to the attempt of realizing a sustainable action from social, environmental and economic perspective (Öresjö 2012). Empirical research (Simons &Peischl 2009) shows that renovations in low income areas are not likely to be undertaken by private building owners, as a refinancing the investment costs via raised rents seems practically not realizable. The situation is locked-in due to the fact that the renovations will not meet the demands for profitable investments for the owners.

Problem Formulation

The question of how to practically realize a holistically sustainable renovation of the million-program- or social housing buildings has thus emerged recently in political and scholar discussions by many European scholars (Hoppe 2012, Häkkinen & Belloni 2011, Huber et al 2011). A solution towards realizing efficient renovation of the million-program houses in Sweden is particularly urgent to be found, since a majority of the houses are now due to be renovated, a point in time in which energy-efficient retrofitting could be realized with cost- and work saving synergies. After the due renovations an additional retrofitting for energy purposes is even more unlikely to be realized (Warfvinge et al 2012).

Still private building owners of the million-program houses currently show no intention to invest into additional energy-efficiency measures while renovations are undertaken (Högberg 2012). They experience no drivers that urge them to do so, as nationwide sustainability goals are nothing their business is concerned with, while additionally the decision for retrofitting is opposed by several strong barriers, as aforementioned. Local governments striving to fulfill ambitious sustainability targets have no legal regularities to enforce the renovation and are thus depended on the voluntary decision of the building owners to realize more energy-efficiency. These investments will have to be taken from a Corporate Social Sustainability motivation, as they will hardly fulfill the original investment performance requirements of the owners. Relying on such voluntary action creates considerable uncertainties, on contextual, strategic and institutional levels, hampering the practical realization of the anticipated investments (Lepoutre et al 2006). Hoppe et al (2010) sees the role of local governments as a distinctive one in practically realizing ambitious retrofitting projects. Inter-organizational interaction between municipalities and building owners is identified as the key towards enabling and facilitating successful modernization. But how can local governments create a motivation like this? New drivers would have to be created, resulting from a new understanding of the renovation context, from the owners’ perspective. Reflexive governance (Hendriks & Grin 2007) aim at inducing a turnaround of stakeholders’ current assumptions and cognitive framework towards sustainability issue, by helping them to scrutinize their prevailing perception and pushing a mutual reconsideration of the entire situation together with other related actors. Via the fostering of protected niche-projects in which these reconsiderations and second order learning processes can take place and be translated into mutual business action, Strategic Niche Management (SNM) (Schot & Geels 2008) channels reflexive governance endeavors and helps to realize the anticipated turnaround of motivation in practice. The purpose of this thesis is to identify and analysis the barriers and drivers towards retrofitting for energy-efficiency as perceived by the private building owners of million-program buildings and to investigate how the approaches of reflexive governance and SNM can help create new drivers and to overcome those barriers. Additionally it will be explored how these approaches can help to manage uncertainties arising in governance networks seeking to realize renovations for energy-efficiency.

Research Questions

The environmental department of the city of Malmö has started a pilot niche project, called “Bygga om Dialogen” (BoD), which is reframing the renovations within a holistic and multi-layered approach aimed at tackling manifold intertwined challenges of environmental, social and economic sustainability in the neighborhood of Lindängen, trying to realize an inclusive socio-economic upscale of the neighborhood from which also the owners would profit (Kommission för ett social hållbart Malmö 2013). A network of cross-sectoral public and private actors is established, acting in a newly created strategic niche, in which the issue and the stakeholders’ roles are reframed to create new drivers. This network aims at reestablishing a profitable business case for retrofitting via a Social Impact Bond (SIB) (Mulgan et al 2011) which is sought to unlock cross-sectoral financial resources.

When wanting to create an effective concept to motivate the building owners to retrofit their buildings, the current barriers and missing drivers, as perceived by the private building owners, leading to the lock-in situation need to be analyzed. From there it will be interesting to investigate how BoD strives to overcome these barriers and create new drivers, by recontextualizing the issue of renovations for energy-efficiency and utilizing second order learning activities in the network.

In order to tackle this problem in a structured way 3 research questions have been developed:

1) Which key barriers and missing drivers towards long-term investments for energy-efficiency can be identified from the perspective of the private million-Program buildings’ owners in Lindängen? How does this lead to lock-in situation

2) How does scrutinizing the current context and assumptions open the owners’ perspectives and create new drivers that help to overcome the lock-in situation? 3) How does the strategic niche management approach help to deal with the

uncertainties rising from voluntary CSR like investments and cross-sectoral collaboration?

Theoretical Background

An empirical analysis of the situation for retrofitting is used to contextualize and understand the locked-in state of affairs that needs to be overcome in order to practically realize the needed renovations. In order to overcome the deadlock Van der Veen (2012) argues that a reframing of the issue in a wider sustainability context is crucial and Hoppe et al (2011) and Barrutia et al (2007) see the local governments’ contribution via network and governance as an essential factor towards overcoming these barriers.

Transition management aims at gradually changing an entire social domain on a more holistically sustainable trajectory, resulting in a new more sustainable regime or paradigm. As the problems tackled are manifold transition management draws from a variety of theories and approaches, such as economics, policy making, collaboration, network governance and organizational change and social learning (Dewulf et al 2009). A key aspect of the transitions is strategic niche management (Schot & Geels 2008) which focuses on the creation and facilitation of strategic niches for innovative development concepts and technologies and allows those to prosper in a somewhat protected environment. Most research focused on SNM for new technologies rather than policy concepts (Schot & Geels 2008). Strategic niche projects challenge their diverse stakeholder networks to scrutinize and reconsider their entire interpretation of the issues’ context and are aiming at overcoming lock-ins by creating a new collaborative vision and project momentum from the new interpretation of the situation. From new projects for sustainable changes that are hatched in a protected space, SNM acts as crucial building blocks for a subsequent long-term regime change (Schot & Geels 2008). SNM uses reflexive governance structures to induce second order learning processes that facilitate the scrutinizing of what is currently taking for granted to allow innovative collaborative solution creation, resulting in a joint meta-vision, in which problem-co-owners

and solution-co-owners have mutual interest to tackle the problem. This process can be initialized by local governmental actors (Grin et al 2004). Reflexive actions and second order learning are thereby challenged by the real business world context with its closed business preferences which leads to strategic uncertainties (Hendriks & Grin 2007); in particular when the learning processes are aiming at making rather CSR related investments practically realizable (Lepoutre et al 2006). Voluntary CSR investments that are to be realized by cross-sectoral governance networks are facing substantial uncertainties for whose management a feasible concept or policy is needed (Lepoutre et al 2006). This paper tries to show how SNM supports the management of these uncertainties on all three levels portrayed by Lepoutre et al (2007). Furthermore this study applies SNM empirically to a holistic urban renewal concept, rather than a technology and therefore contributes to the theoretical development and extension of its scope of use.

Method

This study will consist out of two main parts, with the first one aiming at understanding how the private building owners in Lindängen perceive the case of retrofitting for energy-efficiency, which barriers they see towards realization of such investment and why those are leading to a deadlock situation in which the owners can see no opportunities for investments into increasing energy-efficiency. Furthermore it will be analyzed to what extend the owners experience the drivers as they seem to be no sufficient motivation to overcome the deadlock.

BoD tries to overcome this lock-in situation by, reframing the issue, pulling in new

stakeholders and establishing a cross sectoral innovative business case. In order to understand which effect this has on the stakeholders’ interpretation of the issue, the understanding of it prior to the changes proposed by BoD have to be understood.

BoD aims at tackling the issue in a multi-level way and draws inspiration from many theories and concepts, which also mirror the concept of SNM with its reflexive governance approach. Thus the second part of this study aims at investigating how the reflexive governance and SNM tactics, combined with an incentive policy based on a Social Impact Bond financing is effecting the owners’ motivation to engage in CSR-related investments into energy-efficiency and which limitations this approach experiences.

The concrete objects of this case study thus are the owners’ perception of barriers leading to a perceived lock-in situation and the effect second order learning in reflexive-governance on the owners’ reinterpretation of the situation.

Yin (2009) argues that a case study is the most suitable approach, for an investigation of “how or why” questions towards organizations or the interactions between organizations. In contrast to an experiment he in particularly sees the case study in favor, when the researcher has no control over the behavior of the studied object, which is the case for the owners’ perceptions on investments for energy-efficiency. An exploratory case-study approach is chosen in order to investigate the owners’ interpretation of the issue and to get it deep understanding of the situation according to them, in particular why they perceive the renovation as undesirable or infeasible. The owners interpretation is furthered by means of interviews other relevant

external and internal stakeholders, who can contextualize and frame the owners’ interpretations within in a broader analysis. As Grin et al (2004), stress that for mutual scrutinizing of the prevailing assumptions and creative solution finding, co-problem-owners and co-solution-owners have to be part of the projects network.

Based on this a better understanding of the issue’s multi-level connections to the broader context can be gained. The existing literature on barriers and drivers towards energy-efficient retrofitting delivers a good starting point for developing insightful questions for investigation, however, since the individual interpretations that are to be understood depend on the specific, local contextual factors, they are much rather to be explored, than proven. Same goes for the potential effects the reflexivity approach and the tools of SNM might have on the individual stakeholders. Based on the theories of reflexive governance and SNM it is explicit which aspects to look at, while the effects could go in many directions and are rather inarticulate for each of the stakeholders, and still need to be made explicit by direct questioning and challenging of reflection on the reflection induced by BoD. Additionally it will be explored in what sense the notions of SNM and reflexive governance can act as a tool helping to manage the 3 levels of uncertainties portrayed by Lepoutre et al (2007).

An exploratory case-study approach is hence best suited to find answers to the research questions (Yin 2009) and consequently semi-structured interviews have been carried out as major source of empirical data.

The interviewees are Sten Lundquist from the tenants’ union, Malmö Stad is represented from the BoD project leader (Bjarne Stenquist) and two further employees (Lena Eriksson, Roland Zinkernagel) having been involved in other projects for energy efficient renewal. Also David Kihlberg the leader of a Swedish Society for Nature Conservation’s project about energy efficient retrofitting on post-war houses, is interviewed in order to draw in a neutral but knowledgeable opinion. From the group of owners Olof Andersson, representing Trianon Fastigheter and Sten Lundsted, representing Wilhem Fastigheter have been interviewed. Qualitative interviews have been chosen as means of generating empirical data, because the attempt of explaining causal links in real-life interventions and individual perception is too complex for surveys or questionnaires. The technique of semi-structured interviews allows conducting comparable results between the interviewees, while giving the researcher the freedom to adjust emphasis during the interview and to catch up unexpected new emerging issues, that haven’t been considered in beforehand (Bryman 2012). The semi-structured interviews follow an interview-guide that has been prepared for every group of stakeholders in beforehand that are based on the theory.

Besides the conducted interviews only little empirical data is available on BoD, as it is a newly established project. Additional data is drawn from presentations held about BoD by Bjarne Stenquist, the analysis of energy-efficiency endeavors by Gerdin & Hammarberg (2010) and a collection of articles about the renovation issues in Swedish million program areas in general, called Miljonprogrammet - utveckla eller avveckla? (2012, Forskningsrådet Formas).

The relation of method and theory

Bryman (2012) states that the quality of theoretical reasoning is crucial for conducting a case study. Therefore complementary theories have been conducted and structured in a way that allows deriving the anticipated findings of each of the studies.

The literature conducted to frame the owners’ current interpretation leading to a lock-in situation for energy-efficient investment covers empirical experiences in this issue all over Europe and additionally partly concerns with governance roles of municipalities in realizing energy efficient retrofitting of social- or post-war constructed housing, with which the prior to

BoD situation in Lindängen can be compared.

The theories on reflexive governance and SNM have be found after looking for theoretical approach describing the way BoD has changed the current perception of energy-efficient renovations for million-program houses, by reframing the context and opening possibilities by including new formerly unrelated stakeholders and sources of funding. In order to establish sincere commitment from the owners to the new idea, they would have to undergo a substantial learning process about their expectations to energy-efficient investments. Reflexive governance tries to induce and facilitate such processes of scrutinizing prevailing assumptions and structures (Schot and Grin 2007). Having been reassured about these learning processes taking place, the exploration of reflexive governance has been driven further for this study. Also the SNM approach has been discovered by searching suitable theories to what BoD is aiming to do, the creation of a pilot niche project in which innovative ideas are tested that could be subsequently used to transform a societal issue on a larger scale. Initially developed for technological niches only (Schot & Rip 1997), the SNM approach was later advocated to be applicable to innovative societal concepts, business models and policies as well (Hegger et al 2007 and Ieromonachou et al 2004). The SNM theory is used in the analysis to analyze project-internal learning experiences and the possibility of BoD to act as a building block towards tackling the urgent, but stuck situation of renovation in the post-war mass housing areas on a larger scale.

While only looking at one case, this case acts an exemplifying case (Bryman 2012), which can be representative for similar neighborhoods in Malmö, Sweden and Europe, on which the BoD approach could be applied. In capturing circumstances and conditions of this specific case, the goal is to achieve analytic generalization (Yin 2009) for neighborhoods facing similar issues. The SNM approach of BoD could act as a building block, inspiration and spark to a more general regime shift of the renovation issue in these neighborhoods.

Limitations

As BoD draws innovative ideas from many diverse sources, theories and practices and interestingly adjusts many of those, it is not possible to cover all facettes of the project within the given scale of this thesis. The focus will therefore lie on the private million program houses owners’ perception of the barriers and drivers towards renovating for energy-efficiency. This paper does however fall short of presenting all interconnections, as this would not be possible to portray within the given scope. Also this paper will investigate the

development of the owners’ interpretations of the situation and the challenges faced when managing uncertainties faced by the network, under the new cocenpt and plan of action . The development of these perceptions, are hardly measurable in a statistical sense and underly the authors interpretation.

Theory

Barriers and drivers for investments into retrofitting for energy-efficiency

This paper aims at identifying barriers and drivers for energy-efficient retrofitting of the million-program houses in Sweden, with a particular focus on the neighborhood of Lindängen, Malmö. The existing European literature has been analyzed for barriers towards energy-efficient retrofitting, as the amount of literature analyzing the barriers to retrofitting post-war housing from a Swedish perspective is rather limited.

Split incentives

Many of the studies conducted on the topic of energy efficient retrofitting of rented properties name the ‘split-incentives’(Hoppe & Lulofs (2008), Faber & Hoppe (2012) and van der Veen (2012) issue as the biggest barrier towards practical realization of renovations for energy-efficiency. It is also referred to as the ‘investor/user dilemma’ Faerber (2011).

According to Ekhardt & Heitmann (2009) in particular quantifiable capital flows seem to be unequally distributed from both perspectives. The landlord (investor) feels like carrying the entire investment costs, while the tenant profits financially from the lower energy bills and improved living quality in well insulated spaces. However the tenants feel that they are, via increased rents, forced to pay for the landlords desire to realize necessary renovations and increase of the buildings’ value (Pfnuer 2009). Often the savings gained from the retrofitting often are not large enough to allow short return of investments. This way neither of the parties feels motivated to contribute to a practical realization of the retrofitting. This is leading to a locked up situation, for renovation endeavors.

Dilemma to raising the rents

Swedish landlords have no legal right to ask for an increased rent in return for building changes that do not directly improve the living quality of the single flat, according to the regulation. This is not the case for measures that only affect the building’s energy performance, like a refitted insulation of the building’s wall. The tenants would have to agree to this voluntarily and are in negotiations represented by the tenant union (Gerdin & Hammarberg 2010).

Nevertheless, even if a rent increase high enough to refinance the investments is legally realized, the tenants might not be able to afford the prospective rent, as the post-war buildings often are inhabited by economically weak tenants. Hence a substantial increase of the rent can potentially force them to move out (Faerber & Flecken 2011).

Missing knowledge and experience

Tambach et al (2010) see biggest barrier to practical realization of increasing the building stock’s energy efficiency in missing knowledge and access to knowledge and competencies. According to their empirical study on barriers towards energy-efficient retrofitting, knowledge needs were indicated by all interviewed actors (Tambach et al 2010).

Municipal employees felt like there was a competence-center missing, from which the building owners could get information about financial possibilities. Also (Faber & Hoppe 2012, p. 629) indicate that a lack of practical experiences in the field of retrofitting the existing housing stock add a level of uncertainty about the outcomes and therefore another barrier to practical realization of retrofitting. Häkkinen & Belloni (2011) rather perceive this an issue of organizational learning, since pilot projects and research about technical and financial feasibilities have already been carried out. According to them the missing step is the adoption and application of this knowledge by the building owners.

Short sightedness of the tenants

The missing knowledge and subsequent ignorance or uncertainty about the long-term benefits also are a main reason for the tenants’ hesitations with accepting a raised rent, since the benefits seem rather uncertain as opposed to the certain increase in rent (Van der Veen 2012). Hoppe &Lulofs (2008) see a general unopeness of tenants towards long-term benefits, if they go along with short-term shortages in spending power. This short sighted perception of renovation investments makes reasoning for increased rents in exchange for long-term energy savings complicated and acts as another major barrier towards practical realization of retrofitting.

Short-sightedness and commercial focus of the house owners

The tenants however is not the only group that previous studies portray with too short time perspective. Private landlords often apply a high level of return of investment and short pay-back period as main criteria of investments into the buildings (Sandoff n.d.). This is also the case for energy efficiency measures, which should rather be regarded as long term investments, since significantly expanding the building’s life cycle (Häkkinen & Belloni 2011) and providing long term benefits from decreased energy consumption and thus lower vulnerability to energy price developments (Van der Veen 2012). Provided that the savings resulting from the lowered heating bills can be utilized to refinance the investments, these investments are generally low risk, but slow in return (Pfnuer et al 2009).

Judging the investments on base of this short timed conditional framework, the private owners often feel that the “greater public good” benefits more from their investment than themselves. As a profit oriented business they feel no motivation to undertake such investments without major subsidies or incentives from the public or state (Hoppe &Lulofs 2008, p. 828). This perception of the investment into energy-efficiency led, according to Hoppe &Lulofs (2008)

to a quest for government subsidies, without which the landlords claim ambitious investments cannot be economically feasible.

Missing reliable incentive schemes

The social and environmental urgency, as well as the huge potential to lower the nationwide energy-consumption have also driven many Europeans governments to create regulations for efficiency levels and incentive schemes, such as low-interest capital acquisition and partly even grants for realizing energy-efficient renovation.

Tambach et al (2009) nevertheless portray that building owners need coherent and easy-to-understand- and long-term subsidies schemes in order to provide a reliable framework for investment planning. According to Hoppe & Lulofs (2008), this criterion is seldom met by European, national or local incentive programs. The financial uncertainty resulting from frequently and prematurely changed or abolished incentive programs provide another barrier for building owners to invest into energy-efficient retrofitting (Hoppe &Lulofs 2008).

Hence building owners who do invest into energy efficient retrofitting will often pluck the low-hanging fruits, meaning only investing into the single most economical measure for energy-efficiency, falling short of the potential of energy savings that could be achieved, while undertaking renovation works on the building anyway (Hoppe &Luflofs2008).

Energy poverty and high energy prices as drivers urging for investments into energy efficiency

Since many of the inhabitants of post-war constructed mass housing today are rather poor, high heating bills resulting from inefficient buildings and rapidly increasing energy prices are a major threat to the overall affordability of the flats and the maintaining of a healthy living standard by the tenants (Faerber 2011, p. 85). The risk of conflict resulting from energy poverty could thus be a major driver for house owners to undertake renovations for decreased energy consumption.

Connection to the method

A major task of this study will thus be to analyze if and in which way the barriers and drivers identified in the European literature are applicable to the case’s context. The data derived from interviews with different stakeholder will help to map and clarify actual barriers and drivers in the cases context and how these relate to the ones identified in the previous literature.

How can local governments create new drivers?

Van der Veen, (2012) advocates a governance networking approach between building stock owners and the local municipalities as a major factor in successfully realizing practical investments, provided these networks can mutually agree on goals and ambitions for the

energy conservation. The same conclusion is drawn by Hoppe et al (2011) who empirically investigated several local large-scale retrofitting projects in the Netherlands and pinpointed the degree of networking activities as the crucial factor in practical realization of ambitions for energy conservation.

Reframing the issue of retrofitting for energy-efficiency

Van der Veen (2012) further concludes that moving "energy efficiency" from being regarded as an environmental sustainability issue to a poverty- and therefore social sustainability issue is the most effective way of driving the practical realization forward, in a way that leads to acceptable results for tenants, municipalities and building owners. He claims that approaching retrofitting for energy efficiency from a social sustainability angle will engage new powerful stakeholders, enable broad policy and funding programs and generate more public support for retrofitting, than treating the retrofitting as an issue of merely environmental sustainability. He further claims that via developing a strategy that connects the renovations with targets for poverty alleviation, employment and health many social sustainability issues could be successfully tackled. This is where renovation for energy-efficiency can be connected to social impact bonds, since these aim to provide financial resources towards cross-stakeholder models for sustainable action that aim for measurable contribution to socially sustainable development (Mulgan et al 2011).

Strategic niche management (SNM)

Strategic niche management (SNM) (Schot& Geels 2008) aims at creating sustainable innovation journeys by allowing innovations with socially desirable character to develop in protected project spaces. In such projects new technologies, practices and regulatory structures are formed and grown to spark off a transition towards a more sustainable regime practice. Inside these niche projects a multitude of diverse stakeholders joins collaborative networks, possibly led by local governmental actors, to challenge their current practices and assumptions in order to create a vision for a more sustainable mutual work trajectory.

The niche developments need to take place in a context that creates intrinsic drivers for all of the diverse stakeholders, including the regime players, who can ideally provide resources and embed the niche projects institutionally. All stakeholders mutually form a meta-vision to guide the joint endeavors, to which they can all commit. For this current cognitive frames of all stakeholders need to be challenged. The transformative power of this mutual reconsideration allows creatively mutually build a commonly supported solution, from which the group draws new internal momentum to utilize the emerging window of opportunity This is where SNM connects to the concept of reflexive governance (Schot & Geels 2008, p. 542).

Reflexive governance

Reflexive governance (Hendriks & Grin 2007) facilitates the collaborative endeavors for sustainability of a diverse group of stakeholders and encourages those in scrutinizing and reconsidering their current aims, roles, interpretations, work-structures and relations; or as Grin (2009) puts it “everything that is taken for granted”, in the self-induced problems. In

mutual learning process of first order (new facts) and most importantly second order learning (new interpretations) the network actors develop creative and innovative approaches to reach a mutual goal. Even the mutual goal itself often is unset in the beginning of the process and developed in joint forces to ensure commitment from each stakeholder. With initializing such a process governments have a valuable alternative to command- and control governing, which is mostly unsuitable to master the challenge of modern wicked sustainability issues. Reflexive governance recognizes that the 2nd order learning processes in such networks need a context and reason to take place and further more need to be facilitated, fostered and maintained against the preconditions and assumptions created from the stakeholders’ business as usual. Co-owners of the problem and co-owners of the solution, often apparent outsiders, have to be included in this process (Grin 2009). Through inducing second order learning and actively maintaining the learning, reflexive governance is believed to be able to overcome lock-in situation in sustainable development and help networks to realize what seemed previously impossible in this sense it exceeds the concept or mere network-governance. This also means that actors engage in actions they would previously not have thought of as feasible or even existing.

Dealing with uncertainties

Also Lepoutre et al (2006) interpret command- and control mechanisms and persuasion as insufficient in winning stakeholders’ commitment in tackling issues of sustainable development. Lock-in situations in their opinion often result from a perceived lack of opportunities which is not suitably tackled by commanding change. Hence governments are forced towards utilizing the most difficult to manage policies and approaches in order to tackle wicked sustainability problems, often via networks including a diversity of stakeholders that need to be orchestrated and motivated for actions on a voluntary basis. Within these networks Lepoutre et al (2006) identify 3 types of uncertainties resulting from institutional inertia, disagreement about the content of the problem, and strategic considerations of each actor towards behavior inside these networks.

Each of those uncertainties they claim is manageable via creative, unprejudiced mutual social learning and subsequent recognition of benefits from and self-interest in realizing the established vision, resulting reconsideration of their own role in the issue to be tackled. Thus there is again a connection to reflexive governance. In order to establish such benefits leading to self-interest often incentives need to be provided.

Connection to the method

As mentioned in the introduction the BoD, is has formed a governance network to encourage private building owners to undertake long-term investments into the areas’ buildings: These investments aiming at an improved energy-efficiency, though are not the central concern of an agenda for environmental sustainability, but much more one part of a holistic neighborhood transformation strategy. By incorporating energy efficiency into countermeasures of broader social sustainability issues, the network initiators are hoping to extend the support base; an approach that mirrors Van der Veen’s (2012) suggestion for treatment of energy conservation in building stocks. This paper aims at showing how with applying SNM, the private owners undergo such second order learning, as proposed from Lepoutre et al (2006) and Hendriks &

Grin (2007) in BoD and how the social impact bond provides the necessary incentives for the stakeholders.

The interviews, that serve as empirical data for the analysis, have been conducted in order to investigate how this particular network is using SNM helps dealing with the that Lepoutre et al (2006) portray to be a central barrier towards effective collaborative networking for social change and how a reflexive governance Hendriks & Grin (2007) approach could help to realize new interpretations of the lock-in situation for energy-efficient renovation.

Presentation of Case

The neighborhood of Lindängen is located in Fosie, southern Malmö and has been part of the nationwide million flats program. As the foremost objective of the million-program was constructing a large quantity of new buildings in short time, the building standard during the million-program was generally not of the highest quality. The neighborhood is surrounded by large roads that are physically isolating the neighborhood in an island-like manner.

The Lindängen neighborhood was erected from 1667-1971, as part of Malmö’s 1966 master plan for urban development and counts about 2600 flats officially inhabited by 6136 people in January 2008. (Malmö Stadskontor 2008).

The area has been facing a variety of socio-economic issues, foremost unemployment and high perceived crime rate, due to which the neighborhood was included in the ”area-program” of Malmö that is trying to induce positive social changes in deprived 5 neighborhoods.

About 47% of the people in Lindängen are employed which is significantly below the Malmö (61%) and Swedish (76%) average. However, within the 5 neighborhoods of the area-programs Lindängen is having a comparatively high standard compared to Holma-Krocksbäck (39%) or Herrgârden in Rosengard (17%). Out of the approximately 900 people in between 20-29 living in the area (Malmö Stadskontor 2008) 350 are unemployed (Stenquist n.d.). About 14% of the population is are receiving welfare support, with 510 households receiving each 44310SEK in average support (Malmö Stadskontor 2008).

Lind & Hellström (2003) who investigated the development of rent levels in Malmö found that the rents in rather undesired neighborhoods rose only slightly, unlike in well desired parts of Malmö, which have face a significant increase. This is most likely due to the system called Malmö-Modellen, in which boundaries for legal rent increases are bound to the socio-economic status of a flat’s location.

Buildings

The residential buildings discussed in this case are owned by three different private companies: Stena Fastigheter, Wilhem Fastigheter and Trianon Fastigheter, with Stena Fastigheter holding the biggest share of the stock and Trianon merely owning a few buildings.

Concerning the energy performance, the buildings show the typical energy-use of million-program buildings, consuming in between 175 and 200 kWh/ (m2*year) for heating purposes. The area is connected to the district heating grid of Malmö so that all of the buildings are district heat as source of heating (Persson 2009). The district heat network in the area is run by EON Värme Sverige AB.

Some of the areas buildings have until recently been owned by a Norwegian pension fund, which was accused of having shown no interest in keeping the buildings maintained and thus having caused a significant deterioration of the buildings’ standard (Blomé & Lind 2011). However these buildings have been sold to a new owner, namely Trianon, who claims to have undertaken investment to reestablish a reasonable building standard.

The high energy consumption, low standard of building and pressing social problems of the neighborhood have drawn many discussions about how to uplift the area in the last years. The area program is part of this, as was a project run by Malmö Stad’s environmental department and Stena Fastigheter in 2009, in which potential agendas for a socio-economic uplift of the area have been discussed. In this project the REPOT scheme was developed (Kildsgaard & Iverfeldt 2009) as a framework for renovation of million-program areas and aims at integrating an energy-efficient retrofitting of the buildings into a bigger sustainable development context, tackling not only environmental, but also social and economical issues. The potential of the financial investment into the retrofitting should be reused inside the community of the neighborhood, for example in order to tackle unemployment issues (Kildsgaard & Iverfeldt 2009). Crucial idea of the REPOT scheme is to look at the retrofitting form a triple bottom line perspective, trying to identify possibilities along the renovation process, from which the invested capital could be harnessed on multiple levels inside the community.

However a retrofitting project according to the REPOT scheme was never actually initiated, so no concrete practical examples for how to put the idea of reusing the potential were established.

Bygga om Dialogen

In spring 2012 Bjarne Stenquist, from the environmental department of Malmö Stad, initiated the project “Bygga om Dialogen” which is serving as the analyzed case in this paper. The project, just like the REPOT scheme, incorporates retrofitting of Lindängens’ buildings into a wider socio-economic context, aiming at simultaneously tackling sustainability issues on social, economic and environmental levels. Ironically the BoD was initiated completely independent from the 2009 developed suggestion of applying the REPOT scheme to the area.

Driven by the idea that the potential lying in the renovation investments can be reused in many

ways inside the

neighborhood, for

example by the

renovation process creating new local jobs, the project aims at gathering financial

support from a broad variety stakeholders across organizational borders, that could see a long term benefit from a socio-economic uplift of the area

successful model for renovation of post

The Bygga om Dialogen project trys to connect these different organisations and funds by drawing their financial contribution to the project together in a social investment fund (”funds of funds”). The exact financial contributors to this fund are currentl

project is still in an early stage. It is sought to have a contrbution from funds, such as the European Social Fund (European Investment Bank), th (European Regional Development Fund

(JESSICA). Further more local private and public actors are investing into the fund the idea of social impact bonds (

house owners that they will have to invest into social and environmental sustainability projects, such as energy savings

projects should be locally sourced from the currently unemployed inhabitants of the neighborhood. The sourcing and training of the workforce will be organized by a local delivery organization, which will be

investment fund. On a success based model the local departments that are financially supporting unemployed people, will contribute a part of their savings made from people being no longer unemployed and now having a job, to the deliv

BoD aims at showcasing that the public sector can benefit in long term

supporting the building owners in their renovation projects, if these projects in turn create new jobs locally, as the welfare costs would subsequently decrease by increasing the employment rate in the neighborhood. This way a group of st

would normally not be financially contributing to a project aiming at increasing the energy efficiency of the local housing stock. The anticipated long

investment of the so called “social

Figure 3 Initial investment and resulting savings for document author]

support from a broad variety stakeholders across organizational borders, that could see a long economic uplift of the area or alternatively of the develo

successful model for renovation of post-war housing in Europe.

The Bygga om Dialogen project trys to connect these different organisations and funds by drawing their financial contribution to the project together in a social investment fund (”funds of funds”). The exact financial contributors to this fund are currently still negiotated, as the project is still in an early stage. It is sought to have a contrbution from a variety of European

European Social Fund (European Investment Bank), th

European Regional Development Fund) fund and potentially the a European Revolving Fund (JESSICA). Further more local private and public actors are investing into the fund

the idea of social impact bonds (Mulgan et al 2011) the fund will provide financial help to the will have to invest into social and environmental sustainability projects, such as energy savings through improved insulation. The workforce needed for these projects should be locally sourced from the currently unemployed inhabitants of the The sourcing and training of the workforce will be organized by a local delivery organization, which will be partly dependent on financial support from the social investment fund. On a success based model the local departments that are financially ng unemployed people, will contribute a part of their savings made from people being no longer unemployed and now having a job, to the delivery organization.

aims at showcasing that the public sector can benefit in long term

supporting the building owners in their renovation projects, if these projects in turn create new jobs locally, as the welfare costs would subsequently decrease by increasing the employment rate in the neighborhood. This way a group of stakeholders are motivated for investments that would normally not be financially contributing to a project aiming at increasing the energy efficiency of the local housing stock. The anticipated long-term savings effect from the initial

called “social impact bond” is illustrated in Figure 3.

Initial investment and resulting savings for social-welfare funds (Stenquist n.d.) [Translated by

support from a broad variety stakeholders across organizational borders, that could see a long of the development of a

The Bygga om Dialogen project trys to connect these different organisations and funds by drawing their financial contribution to the project together in a social investment fund (”funds y still negiotated, as the a variety of European European Social Fund (European Investment Bank), the European ERDF the a European Revolving Fund (JESSICA). Further more local private and public actors are investing into the fund. Based on he fund will provide financial help to the will have to invest into social and environmental sustainability . The workforce needed for these projects should be locally sourced from the currently unemployed inhabitants of the The sourcing and training of the workforce will be organized by a local financial support from the social investment fund. On a success based model the local departments that are financially ng unemployed people, will contribute a part of their savings made from people being

aims at showcasing that the public sector can benefit in long term, from financially supporting the building owners in their renovation projects, if these projects in turn create new jobs locally, as the welfare costs would subsequently decrease by increasing the employment akeholders are motivated for investments that would normally not be financially contributing to a project aiming at increasing the

energy-term savings effect from the initial

In this way the project is using mechanisms of so called “impact investment” or “social impact bonds”, often public-public-, public-not-for-profit- or public-private partnerships across organizational barriers commonly working towards a goal that all stakeholders have a mutual interest in. The idea has been successfully set into practice in 3 projects in the UK and the US, tackling social issues, such as homelessness and re-socialization of ex-prisoners (Mulgan et al 2011).

Analysis and Discussion

Barriers towards energy-efficient renovation in Lindängen

The theory part of this paper presented the recent European interpretation of barriers and drivers that private building owners of post-war buildings experience towards energy-efficient building renovation. The interviews conducted with private building owners of the case in Lindängen, Malmö and members of the environmental department of Malmö Stad, are now used to analyze the barriers and drivers portrayed in the literature with the Swedish and local context. All barriers are manifold, inextricably, and presuppose or reinforce each other. The structure presented tries to get the best logical chain into this.

Many scholars suspect missing technical knowledge about retrofitting being one barrier towards investments into energy-efficiency for private house owners.

In the interviews with the owners this dependency becomes evident, as Peter Lundsted from Wilhem Fastigheter sees a large technical competency inside the company:

“It is not the knowledge or the technical matters, we all know that. It worked in many other countries in Germany as you might know. It is no rocket science, the techniques are all here.” Peter Lundsted (2013)

According to him, also Stena, another large private owner has technical experts who know about potentials of retrofitting, with both companies having an exchange of technical knowledge.

Trianon, as a rather small owner, does not have the technical competencies, being motivated to explore the possibilities of retrofitting they can however easily buy the needed knowledge from external experts:

“We have no experience with the renovation, nobody has that…we had to buy the knowledge from consultancies, but that’s no problem.”

Olof Andersson (2013)

Concerning professional rent companies neither Lena Eriksson sees a gap in knowledge about the financial performance of retrofitting projects:

“I think usually they have quite a good idea about the pay-off time.”

There is, however, a considerable qualitative difference between theoretical and practical knowledge and made experiences. As Olof Andersson pointed out, none of the house owners does already have practical experiences with retrofitting, because none of the theoretical projects have been realized in practice yet. Häkkinen & Belloni (2011) pointed out exactly this case, claiming that the existing knowledge has to be adapted into practice. Therefore naturally the barriers towards renovation would have to be overcome.

The savings for ambitious renovation don’t equal the investment cost

Since the barriers towards investments for increased energy efficiency are analyzed for private owners, it is important to look at the investment from a business case perspective. Professional private owners are likely to primarily undertake investments out of a motivation for increased profits (Hoppe & Lulofs 2008). In an empirical comparison of various investments for ambitious, holistic decrease of energy use for the building stock in Germany, (Simons & Peischl 2010) point out that the sum of savings not in all cases accounts for a positive rate of return of investment within 30 years, with a best case return of investments of less than 5%.

The owners, in the Lindängen case, for example claim that the savings were hardly high enough to profitably repay the investment, if the investment aims for a more than a 25% decrease of the buildings energy consumption. The financial performance of energy-efficiency measurements is however very individualistic and highly depending on the measurement itself, as well as the status quo and architectural properties of the building retrofitted. For most buildings exists a number low hanging fruits to retrofit, which generate very good financial performance from substantial savings and low investment costs.

The split-incentives problem- Or no incentives for anybody?

Many scholars (Hoppe & Lulofs 2008; Faber & Hoppe(2013), van der Veen, (2012), Pfnuer (2009) and Ekhardt & Heitmann (2009) see the split incentives problem as the most powerful barrier towards the rent increases and not only for this reason, as a main barrier towards practical realization of investments into energy efficiency as a whole.

Also Roland Zinkernagel, a German working for Malmö Stad, is familiar with this problem:

“The housing owner invests but the benefits go to the building owners,

very roughly speaking” Roland Zinkernagel (2013)

Within the Swedish context this barrier turns out to be not existing in the same way it is experienced in other European countries. The reason for this is that in Swedish tenants normally pay a lump sum for rent, which already covers all energy-related costs. The energy bill is paid by the landlord; he profits directly from the energy savings, which should provide motivation for investment, as Olof Andersson points out. As illustrated before this is only true

for the ‘low hanging fruits’, so the challenge for the owner to gain additional revenue, for example from increased rents remains, for ambitious projects.

To prevent gentrification from rapidly increasing rents, the rent has to be negotiated with the Swedish Tenant Union (Gerdin & Hammarberg 2010). The negotiations are bound to legal regulations. Landlords have the right to raise the rent due to a standard increase of the flat, for example, a renovated bathroom, however not for improved energy efficiency.

The tenants’ organization thus is an important stakeholder in the renovation processes. as potential rent-increases would have to be negotiated with them. Sten Lundström (tenants’ union) is sure that the tenants could not afford a substantial increase:

“The problem is not whether people want the renovation or not, the problem is:

‘Who is going to pay for it?’ Sten Lundström (2013)

He thinks the tenants organization would face a hard time explaining to the tenants why they should “pay a higher rent for the environment” which illustrates the analysis of Van der Veen (2012) that the tenants often do not recognize any benefit with the retrofitting and often, with a short-termed perspective, only see the dawning rent-increase as a threat.

Van der Veen’s (2012) research was however conducted in the Netherlands, in an environment where the energy-bills are separated from the rent and solely paid by the tenant. Thus tenants do have a financial profit from the renovation, unlike in Sweden, where the tenants would have no such financial benefit from the renovation. Also Lena Eriksson from Malmö Stad (Personal Communication, Email on 22.05.) sees the tenants in an inferior position here:

“As the tenants do not know the power bills, all savings will go into the owners

pockets, after the investment has paid off” Lena Eriksson (2013)

In the context of Lindängen, as for many million-program areas, increasing the rents is mostly not a question of willingness or understanding, but substantially is a question of social-security. A significant raise in rent is, in particular in poorer areas directly linked to issues like gentrification and displacement (Faerber & Flecken 2011).

In the case’s context the risk of potential displacement is also discussed between the stakeholders:

We can’t do it! If we could raise the rent to cover for both the energy and the standard increase of the flats the tenants could not afford it and would have to move. […]In the total it would be too costly for the tenants.

Peter Lundstedt (2013)

With no financial incentive from lower power bills in return tenants will thus be even more unlikely voluntarily accept an increased rent due to the retrofitting. The owners have no incentive to invest into an ambitious reduction of energy-use, as this does not realize a sufficient financial benefit. For ambitious efficiency targets the split incentives problem thus

rather turns out to be a “no incentives for anybody” problem. The owners only have an incentive for low-hanging fruits, resulting from the fact that these are the only investments that create a very positive financial return.

High expectation on return of investment and commercial focus of the owners

However, the question of when a business case actually generates a sufficient financial return, or becomes profitable enough to be undertaken, is a rather subjective. As Roland Zinkernagel of Malmö Stad supposes, the anticipated minimum financial performance of the retrofitting might be quite a challenge in practice, a fact also stressed by Sandoff (n.d.):

- _{“I think the biggest barrier is financial of course”…”It is a question of, does the}

building owner have the resources, and of course that they have quite a short financial perspective ,they have a payback time of 3 years, or something. So that makes their investments quite difficult, from that point of view at least. “

- _{Roland Zinkernagel (2013)}

As illustrated before such returns are not to be expected from investments fulfilling ambitious reduction targets.

Pfnuer et al (2009) support Zinkernagel’s impression and concludes that unsatisfactory financial pay off is the major barrier towards realizing ambitious investments; if the anticipated return of investment is doubtful to be reached, the professional renting company is unlikely to undertake the investment at all.

Also David Kihlberg sees a conflict in the nature of investments into energy-efficient renovation and the owners’ criteria to such investments:

“The Short sightedness is definitely a problem: If you do something about your building these changes will last you 50 year, but they often want it to pay of in

10 years.” David Kihlberg (2013)

Investing into standard-increases or energy-efficiency?

Consequently the situation could be summarized as follows: The investment into the standard-increase of the flat shows a clear business case to the owners, while the business case of ambitious energy-use reduction is subject to many uncertainties. A voluntary agreement on raising the rent for ambitious energy-efficiency investment seems unlikely, in particular if it was in addition the increased rents, resulting from the valuable standard increase.

“We would have to raise the rent, but I don’t think there is an understanding for that. “… “The tenants’ organization doesn’t see any profits from the renovations” Peter Lundstedt (2013)

If financed via increased rents, only one investment option between standard increase and retrofitting seems feasible, due to the tenants’ budget. Building owners and tenants feel that they are gaining the more direct benefits from the standard increase; additionally the standard increase poses less legal problems to the owners, when wanting to raise the rent. Thus,

lacking sufficient monetary sources from energy bill savings and having closed the option of rising the rents for refinancing the investment, the investment into energy efficiency would have to be paid for via an alternative way.

David Kihlberg also thinks that the owners would, for economical reasons, decide to invest into standard increases, rather than energy-efficiency:

“They cannot see how energy efficiency would pay off, that is why they rather focus on standard increases.” David Kihlberg (2013)

Due to the illustrated situation the investment into standard increases seems to the owners as least troublesome and most profitable. According to Wilhem many owners thus tend towards renovating the apartments one by one for an increased standard, for which they can subsequently get a higher rent. In order to avoid displacing current tenants by very significantly increasing rents, the renovation is taken after one of the current tenants moves out.

“Yes, I think the great solution now is to renovate one by one, Wilhem and the other companies have already started, or are planning to do that. Because it is not good for the existing tenant when you come and you renovate the apartment and you raise the rent by 50-60%, but if you take it one by one, there is only a

win-win situation.” Peter Lundstedt (2013)

Wilhem agrees that with this method there will be hardly any option to also improve the overall energy-efficiency standard of the building. In conclusion, unless the portrayed situation changes, ambitious investments into energy efficiency will not be on the agenda for privately owned million-program houses.

Realizing ambitious renovations – now or never?

Then again David Kihlberg points out how important it is to realize as high as possible energy-reduction, when undertaking a renovation, as major renovations usually happen in long-term cycles: Often synergy effects can be taken from a due renovation of deteriorated building parts, when making the parts more energy-efficient by adding a better insulation. He fears that building owners will miss a great opportunity to reduce the buildings’ energy use, if the energy-efficient retrofitting is not taken with the recently due renovations.

“So there is a big wave of renovations coming up now…in which the house owners have to do something about these houses. And they are a huge part of the building stock in Sweden , these million-program houses…Also we have huge energy consumption in the building, so we have an opportunity to do something about it now…but it is not happening.” David Kihlberg (2013)

If not exploiting the potential cost-cutting synergy effects now, the investment into energy-efficient retrofitting stays unlikely to be realized until the next renovation cycle, due to their relatively low payback-rate and high cost (Hoppe & Lulofs 2008).

The danger of only picking the low hanging fruits

“If you only realize the low hanging fruits first, it is unlikely that a new investment for more ambitious targets will be taken up later.”

Roland Zinkernagel (2013)

Furthermore owners are unmotivated to aim for the highest possible efficiency standard, as profitability declines with level of ambition towards the savings, since the marginal costs for every saved kWh increase with the percentage of realized savings (Simons & Peischl 2010). Low hanging fruits in terms of single energy-efficiency measures with good financial performance do exist (Simons & Peischl 2010), according to Olof Andersson in their case these are the first 25% of savings:

“The tenants pay only one bill, hence the savings go directly to owner. We found that investments for 25% of kWh savings are profitable, the rest is too expensive

to repay with the savings“ Olof Andersson (2013)

For David Kihlberg this picking only the low hanging fruits is not at all sufficient:

“They will make small efforts, because obviously saving energy pays off in money as well..But they won’t do these big changes..Because they don’t really see how they would get that money back. That’s the problem”

David Kihlberg (2013)

Given that the million-program buildings are a large part of the Swedish building stock and thus account for a significant portion of the national energy demand, it would be necessary overcome the situation stuck due to the illustrated barriers, also demonstrate the feasibility of renovation nationwide.

The role of incentives

Pointing towards other European countries as role models the owners thus claim that the public sector should help financing these investments via public incentives- Otherwise, so they claim, there will be no option of realizing (ambitious) investments into energy efficiency.

“One solution, I can’t figure why Sweden doesn’t copy it, is the one from Germany you get about 3 times as much money in income as you have in buying cost, if you produce power from solar panels.” Peter Lundstedt (2013)

“The last 20% of savings are only affordable with governmental support”

Olof Andersson (2013)

The municipal actors’ support the private building owners in this claim, Roland Zinkernagel and Bjarne Stenquist are sure that would greatly help to motivate for and realize ambitious investments into energy efficiency. The empirical study of Tambach et al (2009, p. 988) also shows similar opinions of local municipal actors, the interviewees believe that long term