Renovation gets a ‘Super’ boost in Italy

Chiara Piccini
Chiara Piccini
September 2, 2020

The country’s use of financial incentives to spur building renovation as a part of its green agenda is an example for others to consider.

With a growing demand for solutions to the challenges COVID-19 brought to Italy, the  Superbonus decree announced in May 2020 shows significant promise. Green renovation has already been on the Italian agenda for more than a decade, with programmes like this aiming to incentivise investments in seismic and energy-efficient upgrades to buildings.

The financial Superbonus included in the May Decree will allow homeowners to recuperate investments that improve the energy-efficiency and seismic resilience of the country’s ageing building stocks.

How Italy is tackling COVID-19 by renovating its building stock

Italy’s plans are in line with the European Commission, which identified renovating for energy efficiency as a recovery vehicle that can provide immediate benefits to local populations. The EU Green Deal aims to start a renovation wave across the Union, as roughly 75 percent of its building stock is energy inefficient.

In Italy, renovation has become a hot topic as the country already planned to introduce climate change as part of student curriculums in 2020. The plan is to include lessons relating to as part of their students’ civics education, before integrating information into a more holistic education spanning various subjects.

Edoardo Zanchini, vice president of Italy’s leading environmental group Legambiente, said another relevant aspect is the necessity to create a solid and accessible system for the incentives, able to give certainties to people who want to benefit from them.  

Taking post-COVID-19 climate action now with Superbonus in Italy

Relaunching the business and building sectors using a 110 percent Superbonus can provide immediate benefits to property owners and local contractors. The renovation scheme will allow upgrades that focus on improving thermal performance and reduce the seismic vulnerability of the country’s building stock with a 110 percent refund available to cover the cost of investment. According to Zanchini, the plan is a vital step towards recovery by boosting economic activity and helping to reduce energy poverty.

As Italy was still struggling to recover from the 2008 financial crisis, the country was one of the regions hardest hit by the COVID-19 pandemic. Providing incentives that drive energy renovation projects can support diffuse job sites and by extension, Italian families. As part of the EU’s renovation wave planning, countries should develop a long-term building renovation strategy (LTRS). Although it may not be feasible to maintain the Superbonus indefinitely, incentivising renovation until 2040 shows enormous potential to speed up the recovery of the Italian economy.

How the Superbonus renovation scheme works

The energy-efficiency of Italy’s building stock is less than the European average, with 82 percent of buildings built before they passed the first energy efficiency law. This means most Italian buildings are in the G-class according to the latest energy performance certification system, the worst efficiency rating possible.

Some of the key statistics of Italy’s building stocks are:

  • In 2013, only 2 percent of buildings had an energy classification certificate.
  • Of the flats sold in Italy by 2018, only a small share had an A+, A, or B energy rating.
  • The majority of 1 to 3 room apartment buildings sold (85 percent) were between a D and G class.
  • Of all the buildings sold in 2018, 70 percent had a status of ‘to be refurbished’, placing them in the G class.
  • Only 35 percent of new buildings had an A-class energy-efficiency rating.

To accelerate the rate of renovation, the Superbonus scheme affords homeowners two options. The first allows homeowners to transfer the tax deduction to the company who performs the work, a bank, or an insurer. The owner, therefore, gets the work done for free with the investor able to recover 110 percent of the costs.

The other option is for the owners to pay upfront for the renovation costs and then recover their investment and an extra 10 percent in the form of deductions over 5 years. To qualify for the Superbonus, the renovation should improve the efficiency of the building by at least two energy classes.

Renovations should address at least one of three areas of concern:

  • Thermal insulation – Improving the thermal performance of buildings with insulation materials in roofs and walls of more than 25 percent of the dispersing surface. Renovating structures with modern insulation count towards a maximum deduction of €40,000 for multi-unit homes and €50,000 for single-family houses.
  • Installing efficient heating systems – Replacing inefficient heating systems with centralised condensing or heat pump technologies, including cogeneration plants, allow for a maximum deduction of €30,000 per single-family house and €20,000 for multi-unit buildings.
  • Improving seismic resilience – Any work carried out that improves the seismic safety of an apartment.

Owners can also recover the costs of replacing windows or installing photovoltaic electricity systems if they combine the work with either improved insulation or replacing the heating system. Improving the thermal performance with modern insulation in the building and reducing the energy consumption of the heating system provide the biggest benefits. Due to their advantages, these interventions are Maxi Renewal Actions and required as part of any Superbonus renovation project.

Challenges facing the Superbonus renovation scheme

Zanchini believes that the Superfund scheme is an effective way to recover many of the 600,000 jobs lost since 2008 due to adverse economic conditions. As Italy has more than 1.2 million multi-unit houses and 12 million buildings, a well-designed long-term renovation strategy can have an enormous impact on the country’s economy.

He thinks that incentives should reward, amongst homeowners, those who want to invest more to help boost high-quality solutions. Similarly, the renovation scheme should consider extending the timelines to 4 years as some condominiums’ decision-making process can be quite lengthy.

Finally, he thinks it is necessary to create a solid and accessible system that clarifies the incentives and provides certainties for those who want to benefit from the scheme. To ensure success, the scheme should be underscored by competence, control, and education.

Municipalities should also be allowed to implement local programs that improve the building stocks of suburbs and public housing for improved efficiency and economic activity.

To sum it up, Zanchini thinks:

  • Having clear energy goals can boost Italy’s recovery plans.
  • Promoting the use of healthy, recycled, and natural materials will improve sustainability.
  • Focusing on sustainability will provide more comfortable and healthy buildings for current and future generations.

By renovating the existing building stock with 110 percent Superbonus, Italy can restart economic activity while reducing carbon emissions and improving their population’s health and wellbeing. Promoting future sustainability with practical solutions and tax incentives is a major opportunity to speed up Italy’s economic recovery.

We support sustainable renovation initiatives with innovative technologies that help improve the thermal efficiency of the world’s building stocks.