EFFECT4buildings Bundling tool

Published on 18 November 2020

Finland

About this good practice

The Interreg project EFFECT4buildings has developed a toolbox of financial tools for implementing more energy efficiency measures in buildings. The target group is building managers.
Bundling is a tool for combining many small measures into one package, which can increase the profitability of an investment and make it more attractive to potential investors.
Energy efficiency measures often consist of many small investments. The risk of “cherry picking” is high. It often results in sub-optimal solutions, since it is cheaper to use several measures at the same time in a building and measures are often interlinked.
Grouping less profitable measures into a larger “package” prevent the risk of cherry picking and is easier to communicate. It helps to focus the discussion on a strategy rather than on details.
Bundling can be carried out with the Total Concept Method, TCM. TCM provides an action plan of measures that as a whole fulfils the property owner’s profitability requirements. The profitability assessment in TCM is based on the internal rate of return method, which assesses each investment by the actual profit it creates.
These IRR values vary between single measures, which in practice means that the most economical and the most profitable measures will assist the funding and implementation of less profitable measures. Operating this way, the complete action package will fulfil the profitability frames set by the building owner.
The tool includes training material.

Resources needed

To use the Total Concept Method some hours for introduction is needed. If data for possible measures are available, it does not take a long time to insert them to the tool.

Evidence of success

TCM gives an easy and brilliant way to implement a successful energy efficiency project.
Bundling method has also been proved as a good standard for the presentation of proposed measures in energy audits.
Another best practice in using the bundling method is to make a Public Private Partnership agreement when approving state aid grants for investments in SMEs, as a pre-condition for such aid,
The method is so successful that it should be tested on a larger scale within the EU

Potential for learning or transfer

The tool has been developed with the aim to make them possible to adapt in all (European) countries. The potential for transferring best practise to other regions is supported by clear guidelines, templates and training materials.
Visit project website www.effect4buildings.se to explore the full toolbox.