Sunny Spain’s green energy plan leaves the needy cold

By Corina Pons

MADRID (Reuters) – Standing by his swimming pool at his home in an affluent Madrid suburb, retired engineer Juan Manuel Cosmes Cuesta is excited about the 30% state subsidy he will receive for the installation of solar panels that have already more than halved his monthly electricity bills.

“A lot of people we know – neighbors, my wife’s friends in the area – do it and everyone is happy,” he said.

This is not the case in less affluent areas a short drive away.

“I understand that for these grants you have to first give some of the money and that’s a lot for a lot of people,” said Manuel Blanco, a 44-year-old plumber who lives in the San Pascual neighborhood. built in the 1970s.

Others said the top priority was the elevators as they climbed the many stairs in the old buildings.

“What we need most here are lifts to help the elderly,” said Candela Garcia, 73, who has lived since childhood in the working-class neighborhood of Orcasitas, south of the Spanish capital.

As Europe doubles down on its green ambitions made more urgent by the fuel and cost of living crisis, the disconnect between Madrid’s suburbs highlights a wider dilemma for policymakers: how to ensure that low-income groups income are not left behind as economies embrace the coming energy transition.

Cosmes Cuesta is well off rather than wealthy, but he can afford to wait for his state grant.

“I don’t know when they will pay it, but they will eventually,” he said.

Social justice grievances were at the heart of France’s 2018 ‘yellow vest’ protests that prompted President Emmanuel Macron to drop an environmental tax on petrol and diesel, which aimed to limit the use of fossil fuels , but was seen as hitting those who could least afford it.

Similarly, equity issues arise when governments distribute subsidies in an attempt to reduce emissions and also dependence on imported Russian fossil fuels through increased use of renewables and better insulation.

Spain is using EU grants as part of a goal to make 510,000 homes more energy efficient by 2026, targeting buildings in which two-thirds of Spaniards live and which have most are over two decades old and are poorly insulated.

In some cases, grants can cover up to 80% of costs and include upfront payments or tax breaks. Construction groups, such as Ferrovial or OLHA, and banks, including BBVA and Santander, encourage subscription by offering assistance with administrative procedures and financing.

As an added sweetener for apartment dwellers, some projects cost the installation of elevators.

Aid for accessibility ramps and lifts remains the most requested grant by residents’ associations from the Madrid housing office, since 40% of Spanish residential buildings with four floors or more do not have a lift. , according to official figures.

Regarding the new grants, residents’ associations, consultants and researchers told Reuters that low-income apartment owners either ignored them or were reluctant to apply.

“There is still very little interest among residential owners,” said Salvador Diez Lloris, president of the national association of building administrators.

Andimat, the national association of companies that sell insulation products, has calculated that for a complete renovation of a typical six-storey building – changing windows, facades and roofs – a subsidy of 65% of the cost of 159,000 euros ($167,363) would be available.

This would reduce energy consumption by 59%, but each household would still have to find 4,600 euros in advance.

But Andimat director Luis Mateo said there was no “renovation sales boom”.

BENEFIT FROM SOLAR ENERGY

Contrast that with the buoyant trade in subsidized solar panels in the more affluent suburbs of Madrid and Barcelona, ​​where single-family homes dominate: Christopher Cederskog, chief executive and co-founder of solar supplier SunHero, expects at least 30% additional installations this year.

“My clients are asking for a lot of grants,” Cederskog told Reuters.

Two-tier consumption means in practice that while Blanco the plumber saw his flat’s electricity bill double to 270 euros a month in winter, retired engineer Cosmes Cuesta saw his bills go up by 120 euros in December to only 43 euros in April after the installation of its panels.

“Our society has not sufficiently integrated the improvement of energy efficiency,” said María José Piccio-Marchetti, director general of housing and rehabilitation of the Community of Madrid. “It’s a change of concept.”

As Belgium, France, Italy and others all seek to improve energy efficiency and energy bills rise, Marie Le Mouel, a fellow affiliated with the Brussels-based Bruegel Institute, said that now was the time to offer subsidies – but the challenge is to design the programs correctly.

“Building stock energy efficiency is sort of the next big thing on the decarbonization agenda,” she said. “In Europe, each country is struggling to find the right mechanisms to make this work.”

The Italian “super-bonus” system is even more generous than that of Spain. The state pays 110% of the cost of greening buildings, from insulation to solar panels to replacing boilers and window fittings – has created jobs and boosted the economy, but has also ran into equity issues.

“Benefits have gone to very few people, mainly wealthy and skilled people who have homes in the historic centers of major cities, especially in the northern half of the country,” said the small business lobby and think tank CGIA in a statement. report.

Silvia Pastorelli, climate and energy campaigner for Greenpeace, said one approach could involve grants for the less well-off and subsidized loans for the wealthier. She praised the Belgian program which ties the amount of the subsidy to household income.

“You shouldn’t need to own the roof above you or the walls around you to benefit from solar panels or insulation, and you shouldn’t need tens of thousands in your account to renovate if you struggling to pay your heating bills,” she said. said.

Spanish Prime Minister Pedro Sanchez’s leftist government acknowledges the problem but says the program is unprecedented and essential to get started.

Officials and businessmen are betting that once the first buildings manage to pay less for electricity following renovations and subsidies, more owners will apply for these aids because they will see that their neighbors have succeeded .

David Lucas, general secretary for housing and the urban agenda at the Ministry of Transport, estimated that the 4 billion euros allocated to this plan would be spent by 2026 when 9.3 million homes in the country must be renovated.

“Billions of euros can’t be a problem, it has to be an opportunity,” he said.

($1 = 0.9500 euros)

(Additional reporting by Gavin Jones in Rome and Belen Carreno in Madrid; editing by Mark John and Barbara Lewis)

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