This report provides an overview of relevant EU funding sources for projects aimed at improving energy efficiency and deploying renewable energy in the heating and cooling sector, and to support innovation and job creation at regional level in the same sector.
This study covers European funding sources for the current programming period (2014- 2020). Where possible, an outlook will be provided for the period beyond 2020 (2021- 2027). The overview will focus on public funding, both grants and other financial instruments such as soft loans and guarantees.
EU funding for heating and cooling projects is channelled both through the five European Structural and Investment Funds (ESIF) and through dedicated EU grants and financial instruments. The bulk of ESIF funding under the Cohesion Policy is concentrated on less developed European countries and regions, whereas the other EU funding sources are typically open to applicants in all Member States. Many EU funding instruments require cross border cooperation, but there are also EU instruments that allow for a single applicant.
Some of the EU funding sources in this report are well-known and established, others are less popular. Typically, the more popular programmes also have lower winning chances. It may therefore pay off to look at alternatives. Moreover, preparing an EU funding project can be complex and time consuming. A review of several surveys on the subject revealed that experience of drafting project applications is one of the major differences between successful and unsuccessful applicants.
For highly innovative projects, it is often needed to maximise the utilisation of public funds in order to close the business case. The many EU funding sources cover different project activities, different phases in the technology development (TRL levels) and increasingly also the different types of finance (e.g. equity, debt) that are required to fund a project. This offers opportunities to combine EU funding.
One option is to use several instruments for the various phases of project development (e.g. research, pilot, demonstration). Another possibility is to cover each activity with a different instrument, for instance by applying for a Project Development Assistance (PDA) grant to cover the project development and applying for a LIFE subsidy (the EU’s funding instrument for the environment and climate action) to cover the implementation of the project. Increasingly, EU grants can also be combined with EU debt financing, provided by one of the EU innovative financial instruments. However, there are some limitiations to combining public funding sources (e.g. non-cumulation and state aid regulations). Although it is the primary responsibility of the managing authorities to verify compliance with the regulations, there are several cases where this did not happen correctly, sometimes with the consequence that beneficiaries had to repay (part of) the funding.