Energy minister Claude Turnes, environment minister Joëlle Welfring and housing minister Henri Kox (all déi Gréng) on Tuesday presented changes to climate subsidies for households to co-fund electric vehicle infrastructure, insulation and renewable energy installations.
“It’s not that complicated to exit fossil fuels,” said Turmes. A home, for example, can switch from oil or gas heating to a heat pump, adding solar panels on its roof and better insulation to save energy.
Paying for this will become more affordable under government plans to facilitate access to home renovation subsidies. For example, a household no longer needs to upgrade its entire home to be eligible for benefits as was previously the case.
The Prime House and Clevver Fueren subsidies have been re-branded into the Klimabonus, which also includes funding for private forest owners to help protect biodiversity.
“We must involve everyone,” said Kox. Low-income households will get up to double the money to invest in more energy-friendly refurbishments. Once parliament accepts the changes, they will go into force retroactively from the start of 2022, meaning that households opting to invest now will be reimbursed under the higher tariff.
For example, a family with two children earning €4,714 in net income a month or less will receive a 100% top up of the energy subsidy. Based on income, this will get progressively lower as earnings increase. A family of four earning €6,688 a month for example, will only get an extra 10%.
Since the system in place requires households to pay up front and be reimbursed later, Luxembourg’s climate agency (formerly known as energy office Myenergy), is working with banks to ensure applicants get access to the loans they need until they can get back the money from the state.
The top-up for low-income households should cost between €2-4m, Kox estimated, calling the sum “homeopathic”. The ministers could not provide an anticipated budget cost for the new renovations regime, as this depends on the number of people applying and the amount they are eligible for. “The money is there,” said Kox.
Getting support from banks
The agency--or Klima-Agence--provides consultants who visit homes and suggest renovation plans. There’s a roughly four-week wait period between requesting a consultation and receiving an appointment.
The renovation project itself could take much longer to implement, however, said Tom Oberweis of the Chamber of Skilled Trades and Crafts, admitting that there are currently supply chain bottlenecks and labour shortages. Affiliated installation businesses can also provide the energy consultation, said Welfring.
The subsidies will mostly benefit property owners rather than tenants. In addition to the subsidy, they receive a tax break on the investment. Buildings under co-ownership--such as blocks of flats--will have to set up a joint fund to pay for refurbishments. This should help encourage investment, Kox said, but also protect members of co-ownerships from being slapped with unexpected bills.
An online calculator allows applicants to check ahead of time how much support they are eligible for. The , French and German. The government and climate agency are also planning a roadshow to present the new subsidy programme in six communes across the country.
The revamped Klimabonus aims to help Luxembourg achieve its climate targets--reducing emissions by 55% by 2030 and increasing energy efficiency by 44% this decade.
While these measures will help combat and mitigate climate change, Turmes said the war in Ukraine is a “second good reason to exit fossil fuels”.