Revisiting spatial distribution of residential energy renovation grants: evaluation of policy change for more equitable use of public funds

Lauri Lihtmaa, Kalle Kuusk and Targo Kalamees

Energy Policy, 2025, vol. 207, issue C

Abstract: We ask whether renovation subsidies are distributed equally among regions and whether such distribution can be considered fair in terms of national regional aspirations. We examine renovation subsidy applications submitted by apartment associations between 2010 and 2024 using three methods. First, we employ quantitative analysis explaining variations in subsidy applications and their relationship to the regional development status. Secondly, we utilise a logistic regression model to identify the thresholds of building characteristics that influence the likelihood of apartment associations obtaining grants. Lastly, we conduct interviews with policymakers, stakeholders, and practitioners to enhance the analysis. The results reveal that subsidies are distributed very unequally across regions, with significant annual variations. While leading regions benefited during the early stages, recent years have shown a shift, with more subsidies being allocated to mediocre regions. Despite outliers, the spatial distribution can be considered fair. The logistic regression analysis indicates that renovation uptake is unlikely for buildings that are underoccupied and either very small or large. Renovation practitioners emphasise that actual renovation uptake is more dependent on intermediaries, whose collective attitudes towards renovations determine a region's success. We suggest that policymakers should focus more on intermediaries who could, in turn, expedite the much-needed renovation activities.

Keywords: Energy renovations; Equality and fairness; Subsidy distribution; Regional development; Energy policy (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:207:y:2025:i:c:s0301421525003507

DOI: 10.1016/j.enpol.2025.114843

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