Strengthening national frameworks for renewable and efficient heating and cooling in existing buildings

Expected Impact:

Proposals should present the concrete results which will be delivered by the activities and demonstrate how these results will contribute to the topic-specific impacts. This demonstration should rely on a solid analysis of the current situation, realistic assumptions and baselines, and establish clear causality links between activities, results and impacts.

In terms of qualitative impact, proposals under this topic should demonstrate how they will contribute to strengthen the national frameworks for business and financing models reducing or shifting high investment costs for the installation of heat pumps and solar thermal systems in existing buildings.

In terms of quantitative impact, proposals should quantify their results and impacts using the indicators provided for the topic, when they are relevant for the proposed activities. Proposals are not expected to address all the listed impacts and indicators. The results and impacts should be quantified for the end of the project and for 5 years after the end of the project. The quantitative indicators for this topic include:

• Number of relevant stakeholders participating in the national collaborative platforms
• Number of public authorities using resources and information produced and provided by the activity
• Number of public authorities and other relevant stakeholders endorsing the identified measures
• Number of relevant stakeholders, along the value chains, including consumers, with improved skills/knowledge during the action

Proposals should also provide indicators which are specific to their proposed activities.

Proposals should also quantify their impacts related to the following common indicators for the LIFE Clean Energy Transition subprogramme:

• Primary energy savings triggered by the project in GWh/year
• Final energy savings triggered by the project in GWh/year
• Renewable energy generation triggered by the project (in GWh/year)
• Reduction of greenhouse gas emissions (in tCO2-eq/year)
• Investments in sustainable energy (energy efficiency and renewable energy) triggered by the project (cumulative, in million Euro).

Funding rate

Other Action Grants (OAGs) — 95% 

Objective:

This topic will support the establishment of national collaborative platforms to strengthen the existing regulatory and financial frameworks at the national and local levels, thereby facilitating a large-scale rollout of on-site heat pump and solar thermal installations in existing buildings, including in combination with photovoltaic (PV) or photovoltaic thermal (PVT) systems.

Heat pumps and solar thermal are mature technologies which will be key to meeting the 2030 EU energy and climate targets and towards the climate neutrality of the EU’s building and heating and cooling sectors by mid-century.

However, high upfront costs for the purchase and installation in existing buildings and split incentives can be a barrier for many consumers across all building segments. Additionally, high electricity prices compared to natural gas prices represent another key barrier, notably in EU markets with higher levies and taxes on electricity compared to natural gas.

Alternative financing schemes and business models are emerging such as heating as a service, leasing, all-in offers, community financing or aggregators monetising the flexibility of heat pumps. Some of these models reduce or shift investment costs, risks and administrative burden from the consumer to the provider. In this context, LIFE CET and other EU programmes have funded projects assessing, testing and replicating alternative business models and/or solutions for technical energy delivery models.

These projects have developed, among others, standardised contractual models and methods/tools simplifying processes and assessments ensuring that installations are of high quality and suitable for the selected buildings prior to any installation.

Notwithstanding, the large-scale uptake of those alternative models is hampered, among others, by various national and local regulatory and market barriers. These concern, among other aspects, permitting, urban, building and rental regulations, third-party ownership and the nature of service agreements, the valorisation of demand response in electricity markets and the electricity-to-gas price ratio.

Given this background, the specific objectives of this topic are to identify and assess in detail and address, in maximum three to five national markets (for a single proposal), options to address specific regulatory and market barriers hampering the large-scale roll-out of alternative business models and to strengthen the capacity of public authorities and other relevant stakeholders.

This topic supports the implementation of EU energy and climate legislation. The built environment is at the heart of many of the policy challenges that Europe is facing today: of the climate emergency, of energy security, of housing affordability, and of the EU’s competitiveness. The topic addresses these by creating the conditions to strengthening, among others, the supply chain within the EU, as well as support the upcoming Heating and Cooling Strategy and Electrification Action Plan. Additionally, the topic will also address specific barriers that remain beyond the direct reach of EU legislation.

The EU is facing important increases in energy prices, driven by market volatility and exacerbated by its dependence on imported fossil fuels. A key priority for the EU is to strengthen the resilience of its energy system vis-a-vis geopolitical crises impacting the global energy market. Therefore, applicants under this topic are invited, where possible, to develop and implement long-term structural sustainable and energy efficiency measures to enhance EU energy system resilience against future crises, in coherence with short-term energy relief measures needed to respond to the current shock on the global energy markets.

Scope:

Building on the work and lessons learned from on-going LIFE CET projects^[1] and other initiatives, proposals shall target three to five LIFE eligible countries (for a single proposal) to establish or adapt existing national platforms/fora of key relevant stakeholders to:

• Assess in detail for each target country the barriers and enabling conditions for the uptake of alternative business models and financing schemes for on-site heat pumps and solar thermal systems, including hybrid systems, in buildings;
• Scope, assess and model for each target country the impact of specific regulatory and non-regulatory options to address the identified barriers;
• Assess options for
  • attracting a broader range of economic actors to deploy heat pumps, solar thermal and PVT and offer new business models;
  • adapting public incentives to alternative business models;
  • updating existing and creating new tools to enhance cost transparency and competition;
  • creating marketplaces and alliances that increase market transparency and facilitate decision making by consumers and support installers in view of improving consumer offers.

Proposals shall describe how they intend to organise the national platforms to achieve the above and are encouraged to start and monitor the first phase of implementation of selected measures within the duration of the action.

Proposals shall provide a clear and detailed overview of the state of play in each target market, the uptake level of the alternative financing schemes and the business models they intend to address and the barriers to be tackled.

The addressed business models and financing schemes should focus on the supply of at least space heating; however, this does not preclude considering additional services such as water heating and space cooling, including free cooling. For heat pumps specifically, actions may also address the unfavourable electricity-to-gas price ratio. On the other hand, business models and financing schemes for new heating and cooling networks, including small-scale networks, are out of scope.

The national collaborative platforms should include market players such as heating systems providers and installers, investors and economic actors, the financing community, utilities, consumer associations, and relevant competent national or regional public authorities (e.g. from different relevant ministries), regulators, energy suppliers and distribution system operators. Proposals shall demonstrate at the proposal stage the interest and nature of commitment from the above-mentioned actors, either through direct participation in the consortium or through tailored and detailed letters of support. The latter should also clearly specify for authorities their competence in the matter.

Proposals should collaborate and/or provide input, where relevant, to the national hubs of the European Energy Efficiency Financing Coalition, or other relevant working groups on sustainable finance.

Although the focus of the activities is mostly on the national level, proposals may also envisage the exchange of experience between key stakeholders from participating countries.

Proposals must be submitted by at least 3 applicants (beneficiaries; not affiliated entities) from 3 different eligible countries.

The Commission considers that proposals requesting a contribution from the EU of up to EUR 2 million would allow the specific objectives to be addressed appropriately. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts. 

For proposals focused on local heating and cooling planning, please consider applying under the topic LIFE-2026-CET-HEATCOOLPLAN.

[1] See proposals selected under LIFE-2022-CET-HEATPUMPS, LIFE-2023-CET-HEATPUMPS and LIFE-2024-CET-HEATPUMPS.