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Estonia to launch €28M small detached house reno grant measure this April

Residential houses in Tallinn.
Residential houses in Tallinn. Source: Siim Lõvi/ERR

The Ministry of Climate is hoping that €28 million earmarked for the renovation of small detached residential houses can be used up in just two years. Applications for the renovation support measure will open this April, and those approved will have 12 months' time for the renovations to be completed.

Under a recently unveiled bill, eligible for renovation grants are single-family homes and up to two-unit detached houses or townhouses.

Grant amounts will depend largely on where a building is located. In the cities of Tallinn and Tartu, the measure is slated to provide grants of up to €30,000 per project at a rate of 30 percent of total costs – meaning the homeowner themselves would have to be able to pay for the remaining 70 percent.

In the so-called "golden rings," i.e. metro areas, of Estonia's two biggest cities, grants would be capped at €40,000 per project at a rate of 40 percent. Everywhere else in the country, qualifying projects could receive grants of up to €50,000 each, with the homeowner only having to spot half of total costs.

Veronika Valk-Siska, head of housing policy at the Ministry of Climate, explained that more money will be granted in areas where renovations without state support wouldn't pay off.

"This methodology takes the value of the real estate into account on one hand, and on the other hand, the total number of buildings in the area in need of renovation," Valk-Siska said. "And thirdly, it looks at household incomes."

More support for full overhaul

Grants of €30,000-50,000 are intended for complete renovations of buildings. Following renovations, the building's exterior facade and roof should be insulated, windows updated and a heat recovery ventilation (HRV) system installed. That doesn't mean, of course, that previously purchased windows should be swapped out again already.

"We just can't finance work done before an application was submitted," she explained.

Those not out to achieve a C energy rating for their home and simply want to replace their roof or windows can apply for up to €20,000 for the partial renovation of a house. This amount together with the 20 percent support rate applies throughout the country.

It will likewise be possible regardless of location to apply for up to €20,000 in support for the installation of solar panels or batteries at rate of 70 percent support.

Applicants must also take into account that the state will support the installation of up to 15 kilowatts' (kW) worth of solar panels per project.

"A well-insulated building with a reasonable heating system shouldn't really need much more capacity than that," Valk-Siska pointed out.

One-year deadline

Likewise important is the fact that a production capacity of up to 15 kW can be hooked up to the grid at the expense of Estonia's distribution network operator (DNO) Elektrilevi.

From there, however, the process would demand significantly more both time and money, and time will be of the essence in the case of a grant being awarded, as all work for which support is sought must be completed no later than a year after an application is approved.

"We can't provide a longer period than that, because  the EU framework stipulates for us that all the work must be complete by the first quarter of 2026," Valk-Siska said. "And as a result in this case an applicant must weigh for themselves whether they can manage to complete the work within the given timeframe.

According to the ministry official, what has taken time ahead of opening applications is both various coordination rounds as well as communicating with the European Commission; the initial version of the support measure had been completed in August already.

"Kredex thereafter provided feedback regarding the conditions of the [support] measure; those were taken into account," she continued. "Then the letter of explanation was clarified and documents drawn up again. This was followed by an informal interagency coordination round. We've gone through in-house coordination at the ministry as well."

The bill has since been made public, and feedback from market participants is welcome within ten business days. The ministry then hopes to finalize the regulation by the end of this month at the latest.

Applications are currently slated to be opened at the beginning of April.

Valk-Siska recalled that an €80 million application round for apartment buildings was exhausted rather quickly. In the case of small detached homes, however, interest has been more modest.

"Owners of small detached residential houses need counseling and guidance, and Kredex has provided for this purpose dedicated advisers and people who can provide assistance to those who need it," the official said.

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Editor: Aili Vahtla

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