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Splitting energy costs between landlords and tenants: What can Sweden and Germany learn from each other?

Panel: 7. Policies and programmes for better buildings

This is a peer-reviewed paper.

Authors:
Sibylle Braungardt, Öko-Institut (Institute for Applied Ecology), Germany
Karin Lindström
Agneta Persson
Veit Bürger

Abstract

The legislative framework for splitting heating costs between landlords and tenants can influence the efficient use of energy in buildings. While landlords are typically responsible for investments in thermal retrofit measures, tenants can reduce energy consumption through energy-saving behaviour. In view of the shared responsibility, the question which contractual arrangements for splitting energy costs between landlords and tenants support energy efficiency is controversial. Our paper addresses this question by analysing the legislative framework in two countries with opposing approaches: In Sweden all-inclusive rents are common practice, where the landlord is entirely responsible for paying the heating costs. By contrast, in Germany, heating costs are fully borne by the tenants and individual metering and billing has a long tradition. Recently, several approaches for partially introducing all-inclusive rents in Germany following the Swedish example are in the discussion. At the same time, Sweden is currently strengthening the role of individual metering and billing in view of the requirements of the energy efficiency directive and the professional property owners’ resistance towards individual metering and billing remains very strong. Our analysis provides a comparison of the approaches that are currently discussed in the two countries and derives recommendations on how to combine the best of two worlds to provide a favourable framework for supporting energy efficiency.

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