The Green Building Market in Italy

A Hot Tip about Building Products and Construction in Italy

Posted on: 8 Jan 2010

Summary

The construction sector is fundamental for the Italian economy. However, because of current uncertaintysurrounding both the Italian and global economies, investments trends in the sector have been negativefor the past two years, although less so for the residential maintenance/renovations segment which isreceiving a boost from incentives aimed at energy saving. This, along with other factors that will beoutlined in this report, explains why the trend towards green building in Italy remains positive.

 

Research reveals that, over the past four years, a few key drivers (legislation, certification, active role oftrade associations and green building clusters) have increased the interest and demand for green buildingproducts and services in Italy. Currently, best prospects for the Italian green building market include:

 

- Photovoltaic panels (for domestic use)

- Solar thermal panels for building heating and hot water production

- Insulation products and energy saving systems for residential and industrial applications

- Wood construction

- Geothermal energy for building heating applications

 

Recently, some Italian trade show organizers have been trying to highlight the “green building”component among the categories of products they feature at their events. A major challenge for greenbuilders in Italy is compliance with the Italian legislation that regulates green building, which is starting tobe implemented in a uniform manner at the national level only now.

 

Market Demand

Construction in general is fundamental for the Italian economy, both in terms of investments and numberof employees. In 2007, the sector accounted for 11.1% of Italy’s GDP and 8.4% of the Italian workforce.During the nine years from 1998 to 2007, investments in construction in Italy grew by 29.4%, twice asmuch as the country’s overall GDP.

 

However, the growth trend stopped during the second semester of 2008, mainly because of uncertaintysurrounding both the Italian and global economies and because of cyclical factors. As a result, thenational association of Italian contractors had to revise its estimates for 2008 to reflect a 1.1% decreasein units constructed for the whole year (whereas previously it had forecast modest growth). Newresidential construction projects and public works (a segment that had been suffering already for a fewyears) were particularly hard hit, while the trend for residential maintenance (renovation) and nonresidentialprivate construction projects remained positive.

 

In 2009 overall investments in construction are expected to decrease by 10.9% vs. the previous year.The decrease is expected to be even larger (-19%) for what concerns new residential construction.Renovation activities are also expected to slow down in 2009 (-4.6%). Fortunately, some of the majorinfrastructural works planned by the Government of Italy are now being started. Also, there is hope thatthe stimulus plan named “Piano Casa”, which was agreed upon by the Government and the Regions andaims at revitalizing the construction sector by giving for instance homeowners the possibility to enlargecertain buildings up to 20%, will put many of the small contractors, distributors, architects, and buildingmaterials manufacturers, back to work. For instance, the “Piano Casa” could slightly improve the -10.9%figure quoted above for the decrease in investments in construction for 2009, bringing it “up” to -8.5%.

 

But it is estimated that only 10% of construction activities generated by “Piano Casa” will take place in2009, so there is much room for growth in the next few years. It is worth noting that one of the objectivesof the “Piano Casa” is to improve the energy efficiency of buildings. In addition to “Piano Casa”, other taxincentives (including those towards the use of energy efficient and renewable sources) are also expectedto sustain residential renovation activities. This, along with other factors that will be outlined in this report,explains why the trend towards green building in Italy is still positive.

 

By way of background, in Italy, discussion of green building issues evolved not in academic and politicalcircles, but rather among architects concerned about the sustainability of an environment whose health isincreasingly affected by the choice of building materials. In turn, the architects are trying to promotegreen building among policymakers. In any case, the debate around green building in Italy only started inthe early 1990s, well after the concept had gained a foothold in other European countries, especially theNorthern ones. As a consequence, the building sector in Italy lags behind that of other countries for whatconcerns the awareness of green building issues among sector professionals, the number of greenbuilding structures actually erected and the availability of green building materials.

 

An important step towards the promotion of green building issues in Italy was the publishing in 2004 of a“White Paper on Energy, the Environment and Buildings” jointly by FINCO, the Italian Federation ofBuilding Products and Services Manufacturers (www.fincoweb.org) and ENEA, the Italian Agency for NewTechnologies, Energy and The Environment (www.enea.it). The publication was sponsored by the ItalianMinistry for the Environment. The purpose of the White Paper was to demonstrate the benefit ofregulating the energy consumption of buildings. The Paper proved that the combined construction,renovation and management of buildings make up 45% of Italy’s primary energy needs (and it is worthnoting that Italy imports 84% of the energy it consumes). The Paper also highlighted how “buildingenvelopes” (i.e. the foundations, roofs, walls, doors and windows of buildings) in Italy generally areusually not energy efficient because of the lack of adequate thermal insulation, especially for thosebuildings constructed before a 1976 law that set heating guidelines. Therefore, the Paper advocated anumber of measures for increasing the energy efficiency of buildings and the use of freely available andrenewable energies, including:

 

- Large scale renewal of the “envelopes” of buildings, both new and existing

- Regulation of summer air conditioning

- Promotion of the use of renewable energies on a larger scale

- Increase in the use of building automation systems.

 

From our research it seems that in the past four years a few key drivers have increased the interest anddemand for green building products and services in Italy, as follows:

 

1) Legislation and Incentives

 

Until recently, Italy lacked countrywide legislation and incentives to steer building activities towardssustainability. The only laws at the national level regulating the energy efficiency of buildings were:

 

- Law 373, from 1976, which regulated the heating process of buildings

- Law 10, from 1991, which regulated the rational use of energy in general, predating theguidelines of a subsequent EU Directive. Unfortunately the law was never fully implemented.

 

At the same time, certain local (Regional, provincial and town) authorities were autonomously draftinggreen building legislation and including green building techniques in their regulatory plans. For instance,a 2004 Decree from the Province of Bolzano set the maximum values for the yearly heating consumptionneeds of new buildings and categorized buildings according to their heating consumption. Theneighboring Province of Trento was also an early proponent of green building norms. Almost all of theother Regional incentives for green building and energy saving have only been adopted during the past 5years, sometimes transposing EU Directives into local legislation before this was done at the nationallevel. Other Regions and Provinces that have been active in drafting local legislation promoting green building are: Calabria, Emilia Romagna, Friuli Venezia Giulia, Molise, Tuscany, Veneto and, mostrecently, Lazio, Marche and Puglia. As for the types of measures adopted, they range from allowingincreases in the volume of buildings, provided that such increases meet energy saving criteria, to grantingincentives for the production of energy through renewable sources or solar panels.

 

The good news is that in recent times the Government of Italy has finally taken more steps to promoteenergy efficiency and the use of renewable sources in construction at a countrywide level, as follows:

 

a) Legislation on energy efficiency in construction: EU Directive 91/2002, which mandated thatstarting on January 2006 EU member countries certify the energy consumption of buildingsthrough rules defined at the national level, was transposed into Italian Law by Law Decree192/05, which also established the criteria, conditions and means for improving the energyperformances of buildings. The Law Decree became effective on 10/8/2005 and established thatwithin a year from that date all new buildings and all existing buildings with surfaces exceeding1,000 square meters (approx. 10,764 square feet), for which an integral renovation of theelements of the “building envelope” is planned, must possess energy certification. Law Decree311/06 broadened the scope of Law Decree 192 and, among other things, mandated that for newbuildings or in case of installation of new heating systems or of renovation of existing heatingsystems, the systems must be able to generate at least 50% of the yearly requirements forsanitary hot water through renewable sources; the Decree also mandated the energy certificationfor existing buildings with surfaces inferior to 1,000 square meters. It should be noted that theItalian Government recently eliminated a requirement within Law Decree 192/05 to attach anenergy certificate to the contract when selling or renting whole buildings or single housing units(one theory is that the Government wanted to make sure it could sell or rent more easily its ownreal estate properties, most of which do not meet the energy performance guidelines establishedby the Decree). Sector experts are still debating whether this recent decision impacts suchregulations implemented by the individual Italian Regions (see more in the “Certification” sectionof this report). In any case, it is still mandatory to issue an energy certificate for every building tobe sold (with very few exceptions), effective July 1st, 2009.

 

Although the above Law Decrees have not yet been fully executed, noticeable progress has beenmade recently through a series of Implementing Decrees issued by the Italian Government.

 

- The first Implementing Decree was issued on April 2, 2009 by the Government and sets thegeneral criteria, the calculation methods and the base requisites for the energy performance ofbuildings and heating systems and for the systems for hot water production for sanitary uses.

 

- The second decree was issued on 6/26/2009 and consists of the procedures for the application ofenergy certification of buildings and includes the “Italian Guidelines for Energy Certification ofBuildings”. These became effective on 7/25/2009 and mandate the use of a “green report card”that calls for detailed analyses of the energy performance of a building in the Winter andSummer. The green report card is mandatory in the following cases: sale of a home, building of anew home, total renovation of a home, request of the 55% tax deduction for energy efficientrenovation, signing of an energy supply contract on behalf of a condominium.

 

- A third decree is still missing. That decree is expected to set the criteria for approval of theindividuals and organizations that will be allowed to perform energy certification.

 

On April 1st 2009 the Italian Government and the Italian Regions (which have the ultimate jurisdictionover urban planning) agreed on a stimulus plan, labeled as “Piano Casa” (“House Plan”), aimed atrevitalizing the construction sector. Some of the main issues on which the Government and theRegions found an agreement were:

 

- Possibility to enlarge certain buildings by up to 20%

- Possibility to demolish, rebuild and enlarge certain buildings by up to 30%

 

It is worth noting that one of the objectives of the House Plan is to improve the energy efficiency ofbuildings. Again, the means to achieve this latter goal differ among Regions, ranging from very strict measures (e.g. the Region of Piedmont mandates that the enlargement of buildings be accompanied by a 40% reduction in the primary energy consumption needs of a building) to very liberal ones (e.g.in the Region of Veneto the enlargement of buildings is not subject to any energy need reductionrequirements).

 

b) Incentives towards the use of energy efficient and renewable sources: the following are available:

 

- For photovoltaic systems: a measure called “conto energia” rewards electricity produced byhomeowners and businesses through photovoltaic panels with a special rate guaranteed for 20years. In addition to that, users can either sell the excess energy they produce to third parties orcede it to the grid and then withdraw it from the grid when they need it. For all PV systems that will start functioning on or after January 1, 2010, incentive rates will be reduced by 2% (i.e. theGovernment will pay users less for the energy their PV systems produce). In 2011 furtherreduction in incentive rates are expected. In any case, depending on when users decide to installa PV system, the incentive rates that are in force at that time will apply to those systems for the next 20 years.

 

- For solar thermal panels: there is a tax deduction of up to 55% of the expenses incurred in the installation of solar thermal panels, including the expenses incurred for installation-related engineering and masonry works.

- For wind power and all other renewable sources: a special, fixed all-inclusive rate is available forwind power up to 200kW and other renewable energies up to 1MW (excluding photovoltaic).

 

- For energy efficient renovation: it is possible to deduct 55% of the expenses incurred for theenergy efficient renovation of existing buildings, both in their entirety and in their single components. This includes works on the “building envelope” and the substitution of heating systems. There are very precise guidelines for doing this. For energy “re-qualification” forinstance, it is necessary to meet certain objectives for the energy performance for the winterheating of buildings, in order to avoid exceeding specific values indicated in Attachment A of a3/11/08 Decree by the Ministry of Economic Development. Also, for works on the “buildingenvelope” it is necessary to meet the values of thermal transmittance indicated in Attachment B ofthe above mentioned Decree. Also, for the substitution of heaters for winter time, those heatershave to meet certain energy efficiency parameters indicated in a 2/19/07 Decree, which was latermodified by a 10/26/2007 Decree and coordinated with a 4/7/2008 Decree. Also, Law Decree115/08 allows increases in the volume of buildings, provided that such increases are for energysaving purposes.

 

- For home appliances: the 2008 budget law allows for incentives for the substitution of homeappliances with energy saving models in the amount of 20% of the expenses incurred. Except forwhat concerns refrigerator upgrades to class A+ and above, the incentives are limited tohomeowners who are already performing renovation works and only until 12/31/2009.

 

- In addition to the above national incentives, certain Regions have also been providing localincentives for energy efficient construction by using EU funds that are destined towards regionaldevelopment plans (FESR). Such incentives differ in size, scope and time span and they areusually accessible only to companies or individuals based in those Regions.

 

2) Certification:

Demand is increasing for the following types of mandatory and voluntary certification that, in turn, rewardand foster the building of energy saving residential and commercial units:

 

a) Certification of Building Products (mandatory):

In order to be marketed in Italy, building products must possess the CE mark. This is in accordance with EU Directive 89/106, which was transposed into Italian national law by Presidential Decree 246/93 andother subsequent decrees. It applies to hundreds of building products and calls for a Declaration ofConformity from the manufacturer, placement of the CE Mark on the product and granting of a CECertificate of Conformity from a notified body.

 

b) Certification of the Energy Efficiency of Buildings (mandatory):

In the Summer of 2009 the Italian Parliament approved the “Italian Guidelines for Energy Certification of Buildings”. These becameeffective on 7/25/2009 and mandate the use of a “green report card” that calls for detailed analyses of theenergy performance of a building in the Winter and Summer. The green report card is mandatory in thefollowing cases: sale of a home, building of a new home, total renovation of a home, request of the 55%tax deduction for energy efficient renovation, signing of an energy supply contract on behalf of acondominium. The average cost of the “green report card” for an average size apartment (100 squaremeters, i.e. approx 1,076 square feet) is estimated to be 300 Euros, which is not too different from other European countries. As noted previously, the Italian Government recently eliminated a requirementwithin Law Decree 192/05 to attach an energy certificate to the contract when selling or renting whole buildings or single housing units. Sector and legal professionals are debating whether this recentmeasure is also valid in those Regions that had already regulated this issue: in the case of Lombardy forinstance it has been established that the requirement to attach the energy certificate to the sales contract is still in force and that violators will be fined. In any case, it is still mandatory to draft an energy certificate for every building to be sold (with very few exceptions), effective July 1st, 2009. Also as noted previously, there are still no national criteria for approval of the individuals and organizations that will beallowed to perform energy certification, therefore at the moment there are still noticeable differences among regions in terms of which categories of professionals are allowed to perform energy certification ineach region, It is hoped that these inconsistencies will be resolved soon.

 

c) Other types of certification (voluntary):

- LEED: LEED certification is now available in Italy and is granted by the US Green BuildingCouncil, which has a chapter in Italy (www.gbcitalia.com). An example of this is the Porta Nuovareal estate project in Milan, which will obtain the LEED certification. The Milan project is beingdeveloped by US firm Hines, jointly with a firm from Bologna named Galotti. It will consist of356,000 square meters of residential, commercial and office buildings. In particular, within theproject, the first building to obtain LEED certification will be the HQ of the Region of Lombardy,which will have zero emissions thanks to a system of heat pumps that will generate heating andair conditioning from groundwater. The building will also feature solar panels and ventilatedwalls. The building is expected to consume 37% less energy versus traditional office buildings.

- Casaclima: the local government of the Province of Bolzano, located in Northeastern Italy, andthe administrators of the towns located in that Province, have created an agency namedCasaclima, whose aim is to encourage the construction of low energy consuming homes throughconsulting, design and certification services. Since the objective of the agency is to combineenvironmental best practices and cost saving measures, the project has become very popularamong builders and homeowners in the area and has noticeably driven the local demand forhomes whose heating consumption needs are below 3 liters of gasoil per square meters per year.“Casaclima” buildings are now being erected in other parts of Italy as well.

 

“SB 100”: ANAB, the Italian association of architects promoting green building awareness has developed a voluntary certification system based on sustainability parameters that meet thefollowing objectives:

o Limiting the waste of natural resources.

o Paying attention to the quality of the environment and to the health of those who spend most of their time inside buildings.

o Considering the social implications of buildings and how they impact the growth of the community.

 

The above referenced certification system is called SB100 (which stands for “sustainablebuildings with 100 actions). The system includes a list of objectives grouped by themes(bioenvironmental, social, economic, etc.) and lists 100 possible actions to be accomplished inorder to reach those objectives. SB 100 also allows for certification of the energy performance ofthe building in accordance with EU Directive 2002/91/CE.

 

- “Marchio Bioarchitettura di Qualità energetico ambientale”: INBAR, another non-profit associationof professionals, technicians and other experts, grants its own “Marchio Bioarchitettura di Qualitàenergetico ambientale”, which verifies the achievement of certain energetic and environmental performance levels in the construction of new residential buildings. The aim is to evaluate theimpact of a building during its whole life cycle.

- “Sistema edificio”: ICMQ SpA, a well known certification body that operates mainly in the buildingsector, offers a comprehensive certification framework for buildings that includes mandatoryenergy efficiency certification but also other forms of voluntary certification for light, water,acoustic and thermal parameters that contribute to the value of a building.

 

3) Associations and green building clusters:

In Italy there are both associations of professionals that have been very active in promoting greenbuilding topics among the Italian public, as well as a few visible examples of technology districts thatgroup firms involved in green building and of model “zero emissions” residential communities.

 

- The first Italian association of architects promoting green building awareness, which goes by the name of ANAB (acronym for Associazione Nazionale Architettura Bioecologica), was foundedin1989. ANAB has been particularly active in trying to develop green building guidelines aimed at the public sector. www.anab.it

- INBAR (which stands for Istituto Nazionale di Bioarchitettura) is another non-profit association ofprofessionals, technicians and other experts, which for the past decade has been promoting theawareness, information, and education of future generations of professionals on green buildingissues. INBAR together with the Italian federation of construction cooperatives has launched anetwork of construction cooperatives named “La Casa Ecologica”, whose aim is specifically topromote sustainable building. www.bioarchitettura.org

- The Green Building Council now has a chapter in Italy as well (GBCI). It aims to promote sustainable construction in Italy, mainly by granting certification according to U.S. LEEDstandards. Its 150+ members include several businesses, local administrations, professionals and foundations. GBCI is headquartered within the aforementioned Habitech “Energy-Environment Cluster”, near Trento, in Northern Italy. www.gbcitalia.org

 

As for technology districts that group firms involved in green building and renewable energies and model “zero emissions” residential communities:

 

- As noted, Habitech, the “Energy-Environment Cluster”, is located near Trento, in Northern Italy.It owes its existence to an initiative of the local provincial government and is recognized by theMinistry of University and Research. It is based on collaboration between the University of Trento, research laboratories, private companies, and local authorities aimed at creating joint venturesspecialized in the following sectors: sustainable construction, production of energy fromrenewable sources, and intelligent rural and urban planning technologies. The district also houses the headquarters for the Green Building Council in Italy

 

- The whole town of Angeli di Rosora in the Marche Region in Central Italy, is set to become thefirst Italian zero emissions community, with a school, a research center and electric vehicles soonto be added to what can be considered the first zero emissions house in Italy. The house was inaugurated in Angeli in June 2008. The building is three stories high, houses six apartments and was built by Loccioni, an engineering company that is now focusing on energy and environmental issues. The building is known as the “Leaf House” (an acronym for “Life energy and future”) andproduces the whole amount of energy that it consumes. Common green building practices were used, such as wall and casing insulation, photovoltaic panels, heat pumps, diaphragm cellelectrolysis (to extract hydrogen from water and turn it into electricity for nighttime and overcastdays), and collection of rainwater. (The first zero emission non-residential building in Italy insteadwas completed in July of 2008 in the town of Bolzano. It is built entirely from renewable materials and according to the latest insulation techniques and entirely meets its own energy needs from locally available resources through geothermal and photovoltaic systems).

 

By Federico Bevini

 

Read the full market research report

 


Posted: 08 January 2010

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