Greece was among the largest beneficiaries of the European Union's push to improve the energy efficiency of residential buildings, drawing substantial resources from the bloc's post-pandemic Recovery and Resilience Facility.
But a new report by the European Court of Auditors suggests that poor program design has left many of those investments delivering modest results and raising questions about value for money.
Greece accounted for 4% of all Recovery Fund resources earmarked for residential energy renovations across the European Union. Italy absorbed by far the largest share, receiving 43% of total funding for home renovations, well ahead of Spain with 15%, France with 10% and Germany with 7%.
Despite the differences in scale, Greece and Italy shared a common shortcoming: most of the money did not go toward deep energy renovations capable of reducing household energy consumption by more than 60%. Instead, funding was directed primarily toward medium-scale upgrades, which represented 83% of the estimated cost of renovation measures across the EU.
For Greece, that means a significant portion of the investment financed improvements that may prove insufficient to meet the country's longer-term energy and climate targets. The auditors warn that such choices risk creating a "lock-in effect," in which today's renovations make future, more ambitious energy upgrades more difficult or expensive.
Italy's experience offers an even starker example. Under the country's "Superbonus" scheme, homeowners could receive subsidies covering as much as 110% of renovation costs, effectively eliminating any incentive to keep spending under control. The European Court of Auditors concluded that the model was inconsistent with the principles of sound financial management and did not represent an efficient use of European funds.
The shortcomings extended beyond the design of financial incentives. The report found that many countries, including Greece, favored projects that could be completed quickly, often at the expense of more complex interventions such as comprehensive insulation works and deep renovations. Of the 18 investments examined by the auditors, 12 experienced delays and, in several cases, original targets were subsequently revised downward.
Perhaps more troubling, the report casts doubt on the reliability of the energy savings claimed by many programs. Estimates are based largely on theoretical calculations derived from energy performance certificates, which frequently diverge from actual energy consumption. In some cases, the gap reached 400% in Belgium and 80% in Italy, raising broader questions about the metrics used to demonstrate the effectiveness of public spending.
The auditors' overall assessment is unusually severe. The European Union allocated €43 billion to improve the energy performance of residential buildings, yet the absence of clear targeting, the emphasis on quick and easily deliverable projects, inadequate monitoring and the inability to properly assess costs against benefits significantly undermined the effectiveness of the investments.
In effect, billions of euros were mobilized to accelerate the green transition of Europe's housing stock, but a substantial share of those funds risks falling short of delivering the anticipated energy savings because policymakers prioritized the rapid deployment of money over the long-term effectiveness of the renovations themselves.
