D6.9 Publishable Report en

D6.
9
FINAL PUBLISHABLE REPORT
10 January 2020
SUMMARY
INTRODUCTION ......................................................................................................................................................... 4
SOCIO-ECONOMIC CONTEXT ..................................................................................................................................... 6
Territory, inhabitants, infrastructure and quality of life ....................................................................................... 6
Macroeconomic data ............................................................................................................................................. 7
SOCIAL HOUSING SECTOR ......................................................................................................................................... 8
Social Housing in Italy ............................................................................................................................................ 8
Evolution of the sector in Italy............................................................................................................................... 8
Social Housing in Emilia-Romagna....................................................................................................................... 11
Policies and Regulations ...................................................................................................................................... 13
SOCIAL HOUSING: BARRIERS AND OPPORTUNITIES ................................................................................................ 16
Main barriers for the Social Housing sector ........................................................................................................ 17
Opportunities for the construction market ......................................................................................................... 17
THE LEMON PROJECT............................................................................................................................................... 18
Main Activities ..................................................................................................................................................... 18
Project impacts .................................................................................................................................................... 20
Consortium .......................................................................................................................................................... 21
Operative Scheme ............................................................................................................................................... 22
EPC investment programme ................................................................................................................................ 23
SUPPORT MEASURES, TOOLS AND INCENTIVES ...................................................................................................... 25
L.80 / 2014 ........................................................................................................................................................... 25
ERDF ..................................................................................................................................................................... 25
Urban Regeneration Programme ........................................................................................................................ 26
Tax and VAT incentives for energy efficiency refurbishment (Ecobonus)........................................................... 27
Conto Termico 2.0 ............................................................................................................................................... 27
Third part financing (Energy Performance Contract) .......................................................................................... 28
National Energy Efficiency Fund .......................................................................................................................... 29
THE EPC CONTRACT ................................................................................................................................................. 30
The legal framework of the EPC contract ............................................................................................................ 30
LEMON EPC tender .............................................................................................................................................. 31
2
EPC buildings case studies ................................................................................................................................... 35
LEMON work tenders .......................................................................................................................................... 51
Work tender buildings case studies..................................................................................................................... 53
THE EPTA REGULATION ........................................................................................................................................... 55
THE TRAINING ACTIVITY .......................................................................................................................................... 57
Policy maker’s training ........................................................................................................................................ 57
Tenants’ training .................................................................................................................................................. 58
LESSONS LEARNED AND COMPARISONS ................................................................................................................. 60
Lessons learned: EPC tender ............................................................................................................................... 60
Works Contract Vs EPC ........................................................................................................................................ 61
3
INTRODUCTION
The need to upgrade an energetic and structurally inadequate heritage to the current economic and
climatic needs, together with the lack of public funds to be allocated to this action, is pushing the
market towards new forms of financing, less onerous for the public administration and able to offer
advantages in terms of quality of construction, maintenance and management.
On behalf of ACER – Azienda Casa Emilia Romagna, which manages most of the social housing system
in the region, there is a strong interest in the redevelopment of the existing public housing stock, as
to be as much as inclusive with the socially poor range of citizen and to provide them with a
comfortable living is one of the main missions. Another issue for ACER comes from the problems of
tenants' arrears, which represent a cost for the PA and that, even if accounting for 5% of the total bill
income, can reach millions of Euro per year. Taking into account that 70% of these arrears are caused
by energy bills, reducing energy costs reduces the risk of tenants not being able to pay their bills,
reducing the costs for the PA and granting a better living for the tenants, tackling therefore both the
problems of quality of living and cost of energy bills.
The Energy Performance Contract (EPC) is a contract that can help out facing the issue, thanks to its
nature of public-private investment and to the chance to spread the expenses and compensate them
with the energy savings. It is widely used among Europe, aimed at reducing the buildings energy
consumption. In Italy, instead, encounters difficulties in the implementation due to some structural
aspects of the PAs:
 mistrust of possible beneficiaries - public and private - and financial institutions due to the lack
of an adequate analysis of this contractual model and its advantages that it can bring in terms of
economic and environmental sustainability;
 regulatory uncertainty regarding the regulation of the essential elements of the contract – it is
regulated as an atypical contract;
 uncertainty of the achievement of results.
The first thing to put in timeline is a great motivation on everyone's part. The scenario of the works is
environmental and ethical. In the case of LEMON, not only energy and environmental savings are
involved, but also the social aspect. The objective is that of saving, but everybody has to believe in it
because the challenge is demanding.
The methodical approach has to be changed. There was a time when it was possible to cover 100% of
the intervention's funding through public financing and therefore any means of contract would have
worked to achieve the result. Nowadays it is necessary to share the risk and entrepreneurship to
achieve the result. Without sharing it there the risk is of not proceeding at all.
4
In this context the pilot application of the EPC contract in different sectors, and especially in the public
sector, is fundamental in order to provide more knowledge and understand how to overcome barriers.
The LEMON project has therefore the main aim to be the first pilot project in Italy that experiment the
EPC contract implementation to deep retrofit a large stock of social housing buildings. This report has
been designed to present the lesson learnt and the recommendations for how EPC may successfully be
employed among social housing companies.
5
SOCIO-ECONOMIC CONTEXT
Territory, inhabitants, infrastructure and quality of life

Emilia-Romagna is located in the North-East of Italy, in the
centre of the Italian most productive area. The region
comprises one metropolitan city (Bologna) and 8 provinces
(Ferrara, Forlì-Cesena, Modena, Parma, Piacenza, Ravenna,
Reggio Emilia and Rimini). The regional population was of
about 4,454,393 residents in 2016 and it occupy 22.453
km2 of surface and it reveal a population density of 198
inhabitant per km2. The share of people with less than 15
years is the 14% of the total population, while the
percentage of with more than 65 years reaches the 22%.
An efficient network of infrastructures and its strategic geographical position make Emilia-Romagna an
important commercial hub well linked to Italian and European cities and one of the most relevant
junction between the Mediterranean and Northern Europe.
The regional rail system with its 1,400 km of network is one of the most integrated and served in the
country. Bologna specifically represents a crucial hub
for passengers with an annual average flow of
58,000,000 units and is, together with Reggio-Emilia
AV, the regional station of the new high-speed line.
The most important rail route is the axis connecting
Milan, Bologna and Florence, which is served by both
high-speed and traditional trains. The most important
motorways in Emilia-Romagna connect Bologna,
Modena, Parma and Piacenza with the northern and
southern part of the country and with the Adriatic
ridge. These infrastructures are integrated with a dense and widespread network of national roads in
the whole territory.
As for the airport system, Emilia-Romagna has three civil airports:
• Bologna-Borgo Panigale Airport

• Parma-Verdi Airport
• Rimini-Miramare / San Marino Airport
6
In particular, Bologna airport is the largest in the region, it has a volume of traffic among the highest in
Italy, with 6,882,000 passengers in 2015 and an increase of 4.7% compared to the previous year and 40
% in the last 10 years.
The Emilia-Romagna region ranks second at national level for gender equality and attractiveness of
immigrants and also has a poverty index of 17.7%, below the national average (30%) and the European
one (24%), showing a positive performance in statistics on quality of life and social inclusion.
Macroeconomic data
Regarding the economic outturn, the regional GDP was 149.313 million € in 2015, equal to 9% of
national GDP, and a wealth per inhabitant of 33.631 € in the same year, recovering from the last 8
years.
Emilia-Romagna's added value in 2015 was of about 134

billion €, about 9% at national level, and it derived in the
least from agriculture (2%), while industry and services
contribute 30% and 68% respectively.
Emilia-Romagna is high export-oriented, with an export,

mainly driven by manufacturing, of about 55.3 billion € of
goods and services exported in 2015, positioning the
region among the Italian head group for this indicator. Regional export represents the 13.4% of the
national one, confirming the significant contribution to the positive trend of national trade balance in
the last few years. Emilia-Romagna, with 25 thousand exporting companies, is the leading Italian region
for export value per capita and the third for total exports1.
Key sectors for foreign trade are Mechanical Engineering , with the highest amount of imports and
exports, that represents a cluster that develops process and product innovations that are essential for
other value chains as well. Regional exports of ‘tiles and ceramics’ exceed 90% of the national total,
while exports of ‘meat and meat-based products’ account for about 38% of the national total. Other
important sectors for international export are ‘agricultural machinery’ (27%) and ‘other general
purpose machinery’ (29%).
1
Source:Unioncamere ER
7
SOCIAL HOUSING SECTOR
Social Housing in Italy

The "popular home", destined solely to people who belong to disadvantaged social groups, funded with
public and non-refundable grants, and to the "free" construction, that is, funded and realized on
market conditions through the free initiative of the operators, a third type of housing offers emerges,
which is financed by private (or public-private) investments, also through the establishment of special
real estate funds for all those who they do not find an adequate response to their housing needs either
in the ERP or in the free market. This band in Italy is called “Social Residential Building” (ERS) and is
fully covered by Social Housing.
Today, with the implementation of the Integrated Real Estate Social Housing Fund system (SIF), it has
been able to provide a structured response on the national scale to the housing demand expressed by
this population. The SIF foresees the establishment of a National Housing Investment Fund (FIA), which
facilitates the establishment of a series of local funds devoted to Social Housing initiatives, promoted
by active stakeholders territories that meet the requirements of the public and social interest.
Differently from an old conception of public funding as the only form of social housing, the need to
involve private actors or forms of public-private partnership is becoming increasingly important.
In addition to the provision of non-refundable grant, a new concept of "ethical investment" has been
launched, which encourages private investors to intervene in social housing initiatives by taking an
ever-expanding public-private partnership perspective.
Evolution of the sector in Italy

According to the data provided by Federcasa (Association of IACPs), compared to a European average
of social housing on the total of rental housing stock of about 25% in 2008, Italy was below 5%.
ERP's difficulty in responding to the growing demand was justified by the financial structure of the
Home Companies. Since 1998, after GESCAL funds elimination, no substitute resource was specifically
foreseen, with the consequence that the only revenue that would serve the fulfillment of institutional
goals would have to come from management. In addition to possible process inefficiencies, the
regulatory constraints - both on the determination of selling prices and on the disposal mechanisms -
certainly did not favor the achievement of greater revenue.
8
The lack of efficiency in the preparation of sales and disposal plans accelerating a vicious cycle: the
worsening housing conditions, combined with the reduction in the average level of the recipient's
income, further reduced current revenue, already damaged by abusiveism.
The 2008 Italian Finance Law defined the concept of "Residential Social Construction". Real estate
located for individuals and households who are unable to access to the lease of housing in the free
market. Social housing therefore had to cover a new area of housing policy that was not included in
traditional public housing construction and which differentiates it from the point of view of flexibility,
of the target (a wider range of people in difficulty) and of the subjects involved (including private and
non-profit).
The National Housing Plan foreseen the involvement of public and private capital for the realization,
with particular attention to energy efficiency and environmental compatibility of residential homes,
mainly aimed at families in a position of economic-social fragility through the building new homes and /
or enhancing existing ones. In the “Piano Casa” it is possible to consider three intervention points
related to social housing:
 integrated fund system;

 forms of public private partnership (PPP);
 Integrated residential construction promotion programs.
With the D.L. n. 47/2014, the objectives were to support and relaunch rent, increase ERP supply and
facilitate the development of social housing. The Legislator sought to improve existing housing through
a special Recovery and Rationalization Program.
Finally, the emphasis was put on the development of residential social housing, firstly by providing for
tax breaks and deductions in relation to leased social housing, by establishing the possibility for tenants
to redeem social housing at the end of the seven-year lease, and foreseeing some advantages for
buying a rented home.
In order to increase the supply of housing for social housing, the Legislator foreseen, finally, the
possibility of activating interventions, also in derogation of existing urban planning instruments, such as
renovations, replacements, variations in use. In addition, the Legislator also permitted, in derogation of
the relevant funding rules, the sale or transfer of real estate property (completed or in progress) by
public and private entities, with the participation of a public contribution, and aimed at contributing to
the increase in the supply of social housing.
9
Source: Istat
As shown in the graphic, only 5% is the Italian social rent share. Italy is confirmed as a country of real
estate owners (about 70%) and one of the countries that spends less for social housing in proportion
to the national GDP (0,6%), far below the European average(1%).
Source:Eurispes
10
Social Housing in Emilia-Romagna
The public residential building stock of the Emilia-Romagna region managed through the provincial
ACER consists of approximately 58 thousand housing for a total area of 3.6 million m2. Even if great
part of housing is in public buildings, it is possible to observe that an important share of housing is in
buildings that also contain private homes. Altogether the buildings in which there is at least one
managed housing are almost 6,5002.
The table provides a breakdown of the public housing stock by size / type and time of construction of
the buildings. It should be noted that, compared to the private building stock in the region, the public
one is represented in greater part by medium and large condominium buildings. On the other hand,
single-family buildings are almost absent. In particular, half of the managed housing are in large
condominium buildings (more than 16 dwellings), while at the private property level this percentage
settles on 18%. On the other hand, less than 9% of housing are managed in buildings containing up to 4
dwellings, compared to 50% in the private sector. Also with regard to the construction periods there
are differences. Form the detail emerges that an important share of public heritage was built in the in
the first post-war period, while they are in progressive decline from the 90s onwards. The average area
of managed housing is about 62 m2 against a value of 81 m2 for the private dwellings.
2
RSE - Energy System Research, Evaluation of a plan for the redevelopment of the public residential building stock of the
Emilia-Romagna region. The objective of the study is the evaluation of a plan of redevelopment interventions from an
energetic and economic point of view.
11
As mentioned, almost all of the regional public residential park is managed through the ACER, except
for few houses managed directly by the municipalities.
In the comparison between the periods of construction of public and private buildings, the post-war
building boom initially involved, in the first decade, the public sector, also in the post-bellum
construction sector. The private sector had its own exploits in the 60s and 70s. Subsequently, in the
eighties, public buildings returned to a certain weight, while from 1990 until today there is a substantial
balance and a decrease in the number of both public and private.
In terms of distribution between the different provinces, the province of Bologna contains the largest
share of managed homes (34. In the province of Bologna the percentage of managed housing is also
higher than the total number of dwellings occupied by residents (4.4%). On a regional level, the
managed accommodation represents 2.5% of the entire residential park.
12
Policies and Regulations
There are two characteristics of the housing policy of the Emilia-Romagna Region introduced with the
Regional Law 24/2001:
- the new building is a solution of last resort with respect to urban regeneration, sustainable
regeneration and the purchase of building assets to avoid further land consumption;
- Public Residential Construction is part of a larger program of Social Housing in which private operators
and integrated home assistance interventions co-exist for housing assignees.
Specifically, facilitated building interventions aimed at increasing the offer of rented accommodation
and in properties for households with incomes higher than those foreseen for public residential
buildings3.
Among the housing policies, there are 4 "Contributions for the house" currently under way that the
Emilia-Romagna Region has approved in recent years4:
 Social housing development program 2010 (Resolution of the Regional Legislative Assembly
18/2010)
3
Social Housing, Il mercato immobiliare in Italia: focus sull’edilizia sociale, Cassa depositi e prestiti, 2014
4
For more informations, visit the website: http://territorio.regione.emilia-romagna.it/politiche-abitative/contributi-casa
13
The Region proposes to build agreement-facilitated housing to be granted:
- in lease or in permanent use;
- in long term rental or use, not less than 25 years;
- medium term lease or use, also with deferred ownership, not less than 10 years;
to low-income people, with specific requirements, applying lower rents than market ones.
Results: 67 interventions financed, for € 74 million and a total of 774 housing (703 new
construction and 70 deriving from building renovation) realised by companies, cooperatives and
public institutions.
 House for young couples and other families (Resolution of the Regional Legislative Assembly
262/2009)
The Region intends to quickly satisfy, under conditions that are easier than the market ones, the
demand for housing services of particular categories of citizens who do not have the necessary
amount to access the property of the first house.
The objective is to favor particular categories of citizens in the purchase of the first house also
with an agreement of future sale, after a period of lease or assignment for a maximum of 4
years at rates better than the market. The price is determined at the moment of the signing of
the lease or of the use assignment act with deferred ownership.
Parties can agree on the sale of the accommodation even before the expiry of the 4-year lease
or assignment for use.
Results: 30 MLN of € invested in various steps, more than 1,142 supported beneficiaries
(couples, large families and single).
 Experimental program of self-construction of housing (Resolution of the Regional Legislative

Assembly 1712/2010)
Emilia-Romagna Region proposes to respond to the need for housing of low and middle income
families. The maximum amount of the contribution per accommodation is 20,000 €.
Beneficiaries are families, with subjective requisites, to which the lodgings realized in self-
construction will be assigned in ownership.
Results: currently 2 interventions were funded for a total of 480,000 €
14
 Building program 3000 houses for rent and the first house of property (Resolution of the
Regional Legislative Assembly 47/2006)
With this program the Region proposes to build 3,000 houses to be leased or in permanent and
fixed-term use, for a maximum period of 10 years, and in property to low income people who
have difficulty in finding housing for primary housing use or at affordable prices.
It has been realized a rotation fund to finance the interventions aiming at reducing the interest
burden on subsidized loans granted for the implementation of interventions. The maximum
amount of the subsidized loan for accommodation is 120,000 € for permanent lease, 110,000 €
for term-fixed lease and 100,000 € for those destined to property.
These amounts are financed by the zero-interest fund for half (50%) in the case of new
construction and for 60% in the case of recovery interventions.
Results: Revolving fund of 90 million €, 112 co-funded initiatives for a total of 2,449 affected
housing.
15
SOCIAL HOUSING: BARRIERS AND OPPORTUNITIES
The building cycle is a decisive component of the recovery in domestic demand, which is a necessary
factor for the growth of the country; as seen in the previous paragraphs, the building heritage of our
cities is rather dated and has absolutely unsustainable and inadequate energy, environmental and
safety performances: conditions that represent a serious handicap in terms of efficiency and
sustainability.
There is a growing social need for residence that cannot turn into demand because it often has not
economic conditions and sometimes even cultural motivations.
The current trend, at various levels, is to try to initiate a change towards a shared culture of housing
policies and a climate of trust that gives a "non-marginal" role to rent policies, backed by long-term
investments.
Likewise it is necessary to construct the guarantee conditions and identify the subjects motivated to
invest (willing to take the risk).
The strategies for social housing must necessarily point to the reconsideration for social purposes of
the vast real estate assets that the economic crisis has left useless; considering also the opportunity to
act on the occupied building heritage to avoid that its inefficiency generate new dissatisfied social
question.
It emerges the need of a non-speculative real estate fund that acquires real estate assets depreciated,
and with open market operations, efficiently managing payment delays and preserving the property
value of real estate, but also strengthening support for "services for living" complementary to housing
policies and encouraging a privileged real estate tax for assets with a moderate rent.
As for the redevelopment theme, communication, social animation and organizational support are
necessary for the design and implementation of integrated programs for the redevelopment of the
building patrimony occupied by the owners with interventions at different levels of intensity and
involving the main actors: municipalities, agencies public, building and social cooperatives, companies
and their consortiums, condominium administrators, supporting the private investment of the owner
families.
It is therefore necessary the convergence of several actors who share a long-term vision oriented to
the rental market; a market that will exist as it will be supported by public (local and central) tax, land
and institutional policies, which ensure trust and confidence among operators.
16
Main barriers for the Social Housing sector
Among the main problems recognized as barriers for social housing sector redevelopment
interventions, there are:
- the complexity of relationships with the tenant: high mobility of tenants, problem of solvency and
presence of households with a strong incidence of elderly and immigrants with consequent difficulties
in interaction / communication (in particular if energy requalification is to be faced and an active and
conscious behavior is requested to tenants);
- Mixed ownership: some buildings are characterized by different types of properties (public and
private) and this creates complications when condominium decisions have to be made, given that ACER
cannot "speak" to all tenants of housing, but it must compare also with privates, especially when it
necessary to investing in energy efficiency.
Opportunities for the construction market

Interventions in the Social Housing sector represent an important opportunity for three main factors:
- Brokerage: ACERs have a role of facilitator towards all subject with whom it is necessary to
interface to realize redevelopment projects: the owners of the heritage (the Municipalities),
users of houses also responsible for energy consumption (the tenants), who provides the
mortgage (the banks) and who carries out the work (ESCO / company);
- Centralization: social housing is an excellent test bench for testing "centralized" new tools for
tenants that improve their use and management habits;
- Replicability: a "valid" financing model for a portion of social residential stock can be more
easily applied on a large scale to a large part of social housing, due to the similar characteristics
of the heritage and the interacting subjects, to start projects redevelopment.
17
THE LEMON PROJECT
The European Union is asking for actions that help to deliver its target reducing the greenhouse gas
emissions progressively up to 2050. The social housing sector manages over 26 million homes, about
11% of existing dwellings in Europe (Housing Europe data). In Emilia-Romagna the Social Housing
companies (ACER) manage in total 78.703 dwellings in 6.404 buildings, whose energy demand ranges
from 80 to 450 kWh/m2 per year equivalent and average energy cost ranges from 600 € to 2500 € per
year.
The LEMON project is funded under the European Horizon 2020 programme to provide technical,
organizational and financial assistance to public and private entities for the preparation of tenders for
the energy retrofitting of more than 620 social housing units in the provinces of Reggio Emilia and
Parma.
It has the purpose of providing technical assistance to accelerate the investment in the energy
retrofitting of social housing units, integrating different form of funding available, including regional
and national loans and incentives, and apply forms of contract to govern the relations between Local
Authorities, dwelling owners, tenants, ACERs (Social Housing Companies), ESCOs (Energy Service
Companies) and financing institutions as to ensure a return on investment within 15 years from the
retrofitting.
LEMON increases saving opportunities, improves housing space quality and creates value for all the
actors involved in the energy refurbishment of social housing buildings: from people living in the
dwellings to the technicians who manage and keep high building’s performances, from innovators to
investors in the construction sector. LEMON focuses on a portion of social housing located in the
Provinces of Parma and Reggio Emilia but has the ambition to be replicated in other contests of Emilia-
Romagna Region and in Italy.
Main Activities
The main activities carried on during the project are related to:
 Set up a large retrofit programme, interesting for the banks and for the ESCO.
 Engage the regional stakeholders
 Design the energy performance guarantee scheme to launch the investment
 Engage the Local Authorities in the LEMON programme
 Launch investments to achieve a deep retrofit of social housing buildings
 Publish a EPC tender
 Develop and implement the Energy Performance Tenancy Agreement (EPTA)
18
 Screen and select the financing products available for energy efficiency investment through
a tender and a negotiation to select the bank for the loan
 Organize capacity building events and implement a wide project communication and
dissemination
By the end of the project LEMON, the social housing companies ACER Reggio Emilia and ACER Parma
delivered an investment programme of 9.453.428 € (VAT included) in 626 dwellings with an energy
savings, developing a pipeline of bankable aggregated project and financial schemes combining the
retrofit project of a consistence stock of social housing dwellings with an EPC contract that will involve
the ESCOs in the realization of the interventions and in the management of the retrofitted dwellings.
The innovation is based on the integration of different financing instruments available.
In total 626 dwellings have been included in Lemon programme, among them 149 are in Parma
Province and 477 in Reggio Emilia Province. The investment programme of 9.453.428 € will reduce by
4.039 MWh/y the energy consumption and avoid 794 tons of CO2 per year.
The work performed in LEMON include:

 The scouting of innovative solutions provided by local small enterprises to be implemented
in the social housing retrofit;
 The dwelling energy retrofit programme development, which include the energy audit, the
feasibility studies and the business plan of the energy investment for 862 dwellings instead
of 620, engaging 27 Municipalities. In fact, the investment programme has been modified
many times since the Municipalities were not able to approve the investment programme
due to political changes after the elections, lack of co-financing and a change in the
buildings retrofit priorities, or since other buildings non included yet received grants from
structural funds. Moreover, after the first EPC call got desert, some buildings were removed
from the investment programme because not sustainable and profitable for the ESCO. This
activity enabled the delivering of the applications for structural funds funding, obtaining
1.539.850 € of contribution for energy efficiency retrofit investment.
 The development of the economic and financial plan and the approval of the retrofit
programme by 16 City Councils and 59 landlords.
 The engagement of regional stakeholder in 4 meetings to share the project outcome and the
investment scheme, and to receive support to overcome the barriers and replicate the
initiative in other contexts.
 The development of two different tenders: 18 works tenders in buildings mostly with
autonomous boilers managed by the ACER to achieve the energy performance objective and
2 EPC tenders that include investment in buildings with mainly centralized heating system.
Through the EPC tender the ACERs are therefore selecting an ESCO that support them in co-
finance and achieve the energy saving included in the energy saving programme agreed
19
between the Local Authorities, dwelling owners and the ACERs. The first Lemon EPC tender,
was published on the 27th of July 2018, expired the 15th of October 2018 and got desert.
The tender that was addressed to the deep energy retrofit of 395 dwellings got desert. The
second LEMON EPC tender was published on the 2nd July 2019, closed on 16th September
2019 and had 1 participant.
 The recognition of financial institutions interested in financing the ACERs LEMON project
through a ‘Competitive dialogue tender’ and negotiation activities with 3 banks.
 The introduction of the Energy Performance Tenancy Agreement (EPTA) as Regulation
approved by the Municipalities of Parma and Reggio Emilia and by the Union of Tenants on
July 14, 2017. With the formal approval the agreement has been transformed into a scheme
for tenants that set out the energy efficiency sharing saving (70% ACER and 30% tenants)
approach. This provides the possibility to increase the tenants renting fee in the retrofitted
dwellings according with the EPTA fee identified in LEMON business plan.
 The organization of 2 capacity building events national and regional decision makers and 3
capacity building events for the social housing companies tenants, presenting the LEMON
Dwelling Energy management Manual.
 The project communication and dissemination: the LEMON Dwelling Energy Management
Manual is available in Italian (https://drive.google.com/file/d/1MAMb9pp0uBr_0-
ZwiFPOPGcneYAEnVvV/view) and English
(https://drive.google.com/file/d/1NjnOGKyljttD1O4IMa2scuB5Ts9XUFq0/view) and other
training material were developed to support the capacity building activities. Media
dissemination and participation of the partners at National and EU events and initiatives
ensured a proper dissemination of the project.
Project impacts
The project, affecting directly the energy consumption of a wide selection of social housing dwellings,
grants an impact on climate, through a path towards a decarbonised building system.
# Type of impact Revised

1 Avoided GHG emissions (tCO2e/year) 794
2 Primary energy savings (MWh/year) 4.039
3 Total energy efficiency investment 9.453.428
20
Consortium
AESS is the Energy and Sustainable Development Agency of Modena, a no profit association of 86
public authorities and promotes energy saving and renewable energy
projects among the public and private sectors. AESS has a wide
experience in EPC call for tenders development and procurement for
public buildings, developed in the last 20 years.
ACER Reggio Emilia , the social housing company operates on the Province of
Reggio Emilia in the service o f Municipalities, but it also has autonomous,
financial and accounting autonomy as well as juridical liability.
ACER Parma is a no profit public company that assumed management of public housing located in the
province of Parma in Emilia-Romagna. It operates in social residential
housing through its own technical department that provides services
of design and project management aimed at creating housing for
seniors, for students, redundancy workers and accommodations for
rent.
ART-ER Attractiveness Research Territory is the Emilia-Romagna

Joint Stock Consortium that was born from the merger of ASTER
and ERVET, with the purpose of fostering the region’s sustainable
growth by developing innovation and knowledge, attractiveness
and internationalisation of the region system.
21
Operative Scheme
banks
law 80
EPC fee
energy
structural
funds
saving for Fee for ACER/co-
funding
municipalities
tenants
intergration of
Innova- funding and
tion incentives
competitive Fee for ACER/co- landlords

funding
enterprises national
revolving
fund
credibility Renting
for investors fee
conto
termico tenants
LA and capacity Tenant’s

companies
building Manual
The process of LEMON project sees the project partners as core subjects, sees EPC contract, EPTA
contract and Tenant’s Manual as main outputs. It can be summarised in five main phases:
- Phase 1| from check-up to financial plan:

1. Energy audit
2. Energy refurbishment project: feasibility study, intervention plan, business plan
3. Focus group with companies: innovative and sustainable solutions to refurbish the social
housing system
- Phase 2| Development of the tender and definition of financial instruments:

1. Municipal / condominium resolution approving the investment programme
2. Development of the EPC tender: project, contract scheme and risk analysis
3. EPTA contract
4. Financial instruments identification
- Phase 3| Publication of the tender, contract signing and works assignment
22
- Phase 4| Capacity building through training events for tenants and policy makers, evaluation
and monitoring of the project’s impact and replicability
- Phase 5| communication and dissemination of the results
The investment plan foreseen two different financial programmes to be implemented: works contract
and EPC contract. The choice between the models is based on the financial incentives availability and
the possibility to make a long lasting investment for the ESCo out of the refurbishment activity,
affecting therefore the success rate of an EPC contract.
EPC investment programme

The EPC investment programme includes 323 dwellings: 283 dwellings are owned by the Local
Authorities and managed by ACER Reggio Emilia and 40 owned by private landlords. The dwellings are
located in 27 buildings divided in 7 Municipalities. In 39 of these dwellings there is a centralized heating
system, while in 289 there are autonomous boilers.
The energy saving expected with the EPC tender is 2.250 MWh, the 37% of the actual energy
consumption 6.114 MWh. The CO2 avoided will be 406 t of CO2.
23
The energy efficiency investment of the tender is 5.223.046 € € VAT included and foreseen the
following interventions:
 Thermal insulation
 Replacement windows
 Installation of internal control systems on dwellings
 Centralized heating systems substitution
24
SUPPORT MEASURES, TOOLS AND INCENTIVES
The project took advantage of a series of financial tools, mixing them in the best way to maximize the
cost saving for the tender. To analyse and select the right incentives for the energy refurbishment
intervention is one of the most important and difficult tasks to be undertaken during the project
development.
Following, some of the most important financial tools dedicated to energy efficiency in the buildings
sector, applied at the national and regional level in Italy.
L.80 / 2014
 Type of funding: Grant
 Managing structure: State
 Source: Law no. 80/2014
 Geographical area: National
 Beneficiaries: Social housing companies
Short description:
Law no. 80/2014 "Urgent measures for the housing emergency, for the construction market and for
Expo 2015" is a provision for social housing companies addressed to build a long term financing
programme 2015-2018 for the retrofit of housing, including energy efficiency and/or seismic safety, for
a maximum amount, including VAT, of € 50,000.00/accommodation. The grant has been delivered to
the Regions, which allocated, with commitment of expenditure and liquidation, the funding to the
territories.
ERDF
 Type of funding: Grant
 Managing structure: Emilia-Romagna Region
 Source: Structural funds
 Geographical area: Region
 Beneficiaries: Public Authorities and Social housing companies
Short description:
25
Axis 4 of the Emilia-Romagna Region Regional Operational Programme (ROP) 2014-2020, co-financed
by the European Regional Development Fund (ERDF), focuses on the theme "Promotion of the low
carbon economy in the territories and the production system". The resources allocated to the Axis
amount to € 104,379,054.
In particular, Axis 4 - Investment Priority 4c - supports:
- interventions for the retrofit of individual buildings or complexes of public buildings, as priorities in
the approved Sustainable Energy Action Plans (SEAPs) (with particular reference to schools, public
offices, sports buildings, public housing and social housing buildings) and the installation of intelligent
systems for remote control, regulation, management, monitoring and optimization of energy
consumption (smart building) and pollutant emissions (Action 4.1.1);
- installation of energy production systems from renewable sources for self-consumption associated
with energy efficiency measures, giving priority to the use of high-efficiency technologies in public
buildings, in order to achieve and exceed the energy performance standards of buildings already set by
regional regulations (action 4.1.2).
The projects are financed in the form of capital co-financing. The maximum contribution rate may not
exceed 30% excluding VAT, up to a maximum of €500,000. The contribution can be cumulated with
other contributions, incentives, facilities of any kind.
Urban Regeneration Programme

 • Type of funding: Grant
 • Managing structure: Emilia-Romagna Region
 • Source: Development and Cohesion Funds
 • Geographical area: Region
 • Beneficiaries: Public Authorities and Social housing companies
Short description:
The Emilia-Romagna DGR No 1042/2019 allocated almost €41 million of contributions to finance
regeneration strategies aimed at the redevelopment of public spaces, the reuse of existing building
stock and the reduction of zero land consumption for more sustainable green and livable cities:
 30 million euro from the Development and Cohesion Funds (FSC), are addressed to the
construction or redevelopment of public buildings and areas such as schools, libraries, parks and
public spaces;
26
 approximately €11 million from the Cassa Depositi e Prestiti (CDP) and PNEA, are addressed at
supporting social housing policies for the retrofit or construction of publicly owned housing.
43 Municipalities have been funded, which are required to co-fund the investment by the 30 to 50%
depending on the investment undertaken.
Tax and VAT incentives for energy efficiency refurbishment

(Ecobonus)
 Type of funding: TAX/VAT INCENTIVE
 Managing structure: State
 Source: DPR 22 december 1986, n. 917 (TUIR) art. 16, L. 28 december 2015, n. 208 art. 1 comma
74, DPR 26 october 1972 , n. 633
 Geographical area: national
 Beneficiaries: final consumers (enterprises, citizens)
Short description:
The Ecobonus is an incentive not cumulable with ‘Conto termico’ that support energy efficiency
intervention in building. Ecobonus is available for private owners and also for Social Housing
Companies and consists in the possibility to deduct the investment incurred in the tax. Since 2018 this
right can also be transferred to the suppliers who carried out the works (ESCOs).
Fiscal deductions for energy efficiency projects in the residential sector have been introduced in Italy
by financial law in 2007. They consist in reduction of incomes taxation (65%) and VAT rate. Main
interventions covered are:
- energy refurbishment that leads to the heating energy consumption reduction;
- improvement in thermal insulation of buildings (windows replacement, insulation of ceilings, walls
and floors);
- solar panels installation;
- winter air conditioning replacement (heat-pump, condensing boilers).
Conto Termico 2.0

 Type of funding: grant
 Managing structure: GSE
 Source: DM 16 february 2016
27
 Beneficiaries: pa- companies – final consumers
Short description:
Conto Termico 2.0, in effect on 31 May 2016 substitutes, reinforces and simplifies the financial tool
introduced with Decree 28/12/2012, that incentives interventions for energy efficiency improvements
(type 1: envelope improvements, boilers replacement) and thermal energy production from renewable
sources (type 2). Among public entities that can benefit from both of them we can identify ACERs
(Social Housing Associations), residents cooperatives, public law society. Privates, instead, (final users,
apartment buildings, enterprises) can benefit from type 2 interventions.
From 19 July 2016, Public administrations, including Social Housing Companies, as well as fully publicly
owned companies and social cooperative societies registered in their respective regional registers and
ESCO may apply to the GSE for incentives. Access to the incentives can be through two methods:
 through Direct Access: the request must be submitted within 60 days from the end of the work.
 through Reservation: for the interventions still to be carried out, exclusively in the ownership of
the PA or ESCOs that operate on their behalf, it is possible to book the incentive before the
intervention is carried out and receive a deposit of the fees at the start of the work, while the
balance of the amounts due will be recognized at the end of the work, in analogy to what is
done for the Direct Access mode. The retrofit work must start within 120 days after the
incentive request submission.
News of the Conto Termico 2.0 are: the raising limit of interventions from 600 euros to 5.000 euros and
reduction of payback time from 6 to 2 months.
Third part financing (Energy Performance Contract)

 Type of funding: debt finance
 Managing structure: ESCO
 Source: D.Lgs. 30 may 2008/ definition in D.Lgs 102/2014
Short description:
The contracting model EPC is a tool for delivering energy efficiency interventions especially by the
public sector.
28
National Energy Efficiency Fund
 Type of funding: debt finance
 Managing structure: ESCO
 Source: D.Lgs. 30 may 2008/ definition in D.Lgs 102/2014
The National Energy Efficiency Fund established by the Ministry of Economic Development (Article 15,
paragraph 1, of Legislative Decree no. 102 of 4 July 2014) supports energy efficiency measures carried
out by companies, including ESCOs, and by Public Administration, on buildings, plants and production
processes.
Specifically, the interventions supported must concern:

 the reduction of energy consumption in industrial processes,
 the construction and extension of district heating networks,
 the efficiency of public services and infrastructures, including street lighting,
 the energy retrofit of buildings.
The Fund has a revolving nature and offer guarantees and financing promoting the involvement of
financial institutions and private investors, on the basis of adequate risk sharing. The fund provides soft
loans for Private Companies, ESCos and for the Public Authorities. In the case of the Public Authorities
the loan will not exceed 60% of the total investment costs, fixed rate of 0.25% for amounts between
€150,000 and €2,000,000, maximum duration of 15 years.
The facilities granted to the Public Administration may be cumulated with other incentives, within the
limits of an overall maximum funding of 100 per cent of eligible costs.
29
THE EPC CONTRACT
The legal framework of the EPC contract

The EPC contract has been introduced for the first time in the EU legislation with Directive 2006/32/EC
and identifies, designs and implements the energy efficiency intervention of a building in order to
achieve an energy savings calculated in kWh with a consequent saving of expenditure on the
customer's energy bill. The Energy Performance Contract was at first introduced into the Italian
legislation framework with the Legislative Decree 115/2008. Following the publication of Directive
2012/27/EU, transposed in Italy with Legislative Decree 102/2014, the definition of EPC has been
amended as follows: "'Contractual agreements between the beneficiary and the supplier of an energy
efficiency improvement measure, verified and monitored throughout the duration of the contract,
where the investments (works, supplies or services) made are paid according to the level of efficiency
improvement contractually established or other agreed energy performance criteria, such as the
financial savings".
In an EPC contract, bilateral contractual relationships among the following two parties are normally
established:
 The supplier (preferably an ESCO) who anticipates the costs of the efficiency measures, or
assumes the direct burden of finding them;
 The beneficiary (customer) who pays a fee and which can be identified in the Public
Administration or in a private entity.
Annex 8 of Legislative Decree 102/2014 identifies in the following elements as the minimum
requirements that characterize the EPC contract:
(a) A clear and transparent list of efficiency measures to be applied or results to be achieved in
terms of efficiency;
(b) The guaranteed savings to be achieved by applying the measures provided for in the
contract;
(c) The duration and key aspects of the contract and the arrangements and time limits laid
down;
(d) A clear and transparent list of the obligations incumbent on each party to the contract;
(e) Reference date(s) for determining the savings made;
(f) A clear and transparent list of the stages of implementation of a measure or package of
measures; and, where applicable, of the related costs;
(g) The obligation to fully implement the measures provided for in the contract and the
documentation of all the changes made during the course of the project;
30
(h) Provisions governing the inclusion of equivalent requirements in any procurement
concessions to third parties;
(i) A clear and transparent indication of the financial implications of the project and the
proportion of participation of the two parties in the savings made (e.g. remuneration of the
service providers);
(j) Clear and transparent provisions for the quantification and verification of guaranteed savings
achieved, quality controls and guarantees;
(k) Provisions clarifying the procedure for managing changes in framework conditions that affect
the content and results of the contract (e.g.: energy price change, intensity of building use)
(l) Details of the obligations of each Contracting Party and the penalties in the event of default.
LEMON EPC tender

The LEMON EPC tender was published on the 02/07/2019. The closing date of the tender was
16/09/2019.
The purpose of the LEMON EPC contract is to improve the energy efficiency and quality of the service
with the aim to achieve a substantial energy savings and a compliance with the highest safety
standards of the installations. The contract is a mixed contract for services and works, according with
the art. 28 of Legislative Decree 50/2016 and, in particular, are required the supply of energy, the
annual consumption control, the maintenance and operation of heating systems, and hot water
production in order to maintain the comfort conditions in the buildings in compliance with the current
regulations related to the rational use of energy, safety and environmental protection.
For all buildings is required, as a primary objective, the energy retrofit of the buildings according with
the energy audit and feasibility studies developed within the LEMON activities and attached to the
tender, to be carried out by one year from the date of signature of the building work delivery report.
The LEMON EPC contract will equal to 9 years, which will be counted from the date of signature of the
delivery report of the first building to be retrofitted. The amount to be tendered for the 9 years is
determined as follows:
Fuel supply service fee (Qen) € 280,129.05

Management-maintenance service fee (Qman) € 166,719.26
Total cost for initial operations (Qriqu) € 4,555,209.33
Safety costs on operation-maintenance (not € 5.001,58
subject to auction discounts) (sman)
Security costs on initial interventions (not subject € 204,832.23
to auction discounts) (s)
31
TOTAL € 5,211,891.45
VAT € 642,995.66
TOTAL, VAT included € 5,854,887
The EPC tender include the following documents :

 Special Tender Specifications and their annexes: the document defines the objective of the
contract, the duration, the yearly fee and how it is calculated, responsibilities, guarantee and
penalties (business plan of the investment are attached);
 Tender notice: the document defines the procurement process and the characteristic of the
tender (buildings energy audits and feasibility studies are attached);
The contract has been awarded to the best tender identified on the basis of the most economically
viable tender according to the evaluation criteria and sub-criteria and related scores and sub-points set
out in the following descriptions.
Evaluation criteria:
 Technical offer: 80 points
 Economical offer: 20 points
 Total: 100 points
Criteria for evaluating the technical offer:
Id.1 Design choice and how to insert it in the existing context: the quality of the design 20
proposal with particular regard to the installation, the aesthetic impact of the product, to
minimize the maintenance management of the materials used. As far as possible and
further improvement interventions not foreseen in the special tender specifications and its
annexes, it is specified that the improvements requested shall affect the expected energy
savings.
Id.2 Quality of the submitted project papers and their completeness: the grade of design 8
proposal and the details of the construction details developed, such as to define the
aesthetic and architectural appearance of the intervention, with the technical
specifications of the materials envisaged.
Id.3 Quality of the materials offered: the quality of the materials indicated in the proposal 6
Id.4 Construction site organization: the degree of deepening of resources used, the 5
composition of the worksite, the duration of the planned work
Id.5 Design and work execution time: resources committed in order to ensure the respect of 5
the timing of the execution phases and execution of the work.
Id.6 Increasing climatic risk band by +/- 5%. 5
Id.7 Building stacking service CRITER: The commitment, without additional charges for the 10
32
Contracting Authority or the residents and therefore at the total expense of the
competitor to carry out the CRITER stacking service (including interventions to ensure the
regularity of the stacking service registration)
Id.8 Plant management service: The resources and equipment involved in order to periodically 5
verify compliance with the objective of limiting energy consumption
Id.9 Plant management service: Periodic communication and reports to the Administration 4
concerning the monitoring of energy consumption, any actions carried out in the case of
critical consumption with respect to how much indicated by the objectives of limiting
energy consumption and saving energy.
Id.10 Ordinary maintenance service: Improvements respect to the activities which constitute 4
the minimum performance.
Id.11 Extraordinary maintenance service: Improvements will be evaluated with respect to the 4
activities which constitute the minimum performance.
Id.12 First aid service: Improvements with respect to the activities which constitute the 4
minimum performance.
The main challenge of the Lemon project was to develop a financial business plan that took into
account the different incentives and funding available. In fact, the LEMON investment programme is
supported by different funding such as structural funds (POR-FESR and urban regeneration), national
funds (L.80), national incentives (‘Conto termico’ and tax deduction), and co-financing by
municipalities, private owners and the ESCO.
Incentives and grants as structural funds (POR-FESR and urban regeneration), national funds (L.80) and
‘Conto termico’, can be obtained only after the invoices for the works are paid. It means the ACERs had
to anticipate all the investment costs to receive back part of the investment. Therefore, it was initially
planned to identify a financing entity to advance the co-financing of the municipalities.
33
Unfortunately, however, the search for a financing institution was not successful and it has been
introduced in the EPC tender the responsibility for the ESCO to identify the financing bodies, given the
need to liquidate the works during their execution, making available to the Contracting Station the
amounts corresponding to the work carried out and/or reported, either directly or through a third
party, excluding any charge or guarantee to be borne by the Contracting Authority.
34
EPC buildings case studies
BUILDING IDENTIFICATION
Municipality owner Bibbiano
Address P.zza Caduti 3,4,5,6,7,8
Managing subject of the ACER_Reggio Emilia
intervention
n. dwellings TOTAL 40
n. dwellings social housing 40
year of construction 1920 and 1959
Number of floors 3/4+ cellar floor
Construction features Masonry structure/Reinforced concrete structure with infill panels, Clay cement roofing,
Wooden frames with double glazing
Intervention - building insulation

- the replacement of existing windows
- installation of thermostatic valves
- the realization of the insulation of the floors
Total EE investment (VAT 853.917 €
included)
Funding- National L.80 0
Funding- Regional POR 545.000 €
FESR
Incentive – Conto Termico 120.000 €
Energy saving 37%
35
TENDER BASELINE
(9 YEARS)
Fuel supply service Qen 0,00 €
Management Service - Maintenance - Compliance with savings objectives Qman 25.200,00 €
Initial intervention fee Qriqu 717.827,16 €
Operating / maintenance safety charges s man 756,00 €
Initial intervention safety charges s 82.444,61 €
Total TOT 826.227,76 €
VAT (22%) VAT 109.224,65 €
Total TOT_VAT incl 935.452,42 €
EPTA
SdF FROM 1ST TO 9 Y
extra fee from Municiplaity 45% 7.149 €
EPTA 45% 7.200 €
saving for tenants 10% 1.594 €
tot saving 15.944 €
consumption consumption autonomous boilers
ante post
36
Municipality owner Boretto

Address Via per Poviglio 36, 38, 40, 42, 44, 46
intervention
year of construction 1953 and 1962
Number of floors 3 + cellar floor + attic floor
Construction features Masonry structure, Clay cement roofing, Wooden or aluminium frames with single glass
Intervention - First floor insulation;

- Attic floor insulation towards attic;
- Replacement of windows;
- Roofing arrangement (waterproofing, life line);
included)
Funding- National L.80 24.190 €
Funding- Regional POR 86.487 +420.000 €
FESR
Incentive – Conto Termico 93.465€
Energy saving 40%
37
TENDER BASELINE
(9 YEARS)
Total TOT 621.996,75 €
VAT (22%) VAT 68.751,01 €
EPTA
SdF FROM 1ST TO 9 Y
EPTA 24% 5.400 €
ante post
38
Municipality owner Casalgrande

Address Via Europa 3
intervention
n. dwellings social 5
housing
year of construction 1975
Number of floors 3+ cellar floor + attic floor
Construction features CEMENT structure with reinforced concrete with buffering, Clay cement roofing, Wooden
frames with single glass
Intervention - replacement of existing oil-fired generator with gas-fired boiler

- Removal of "autonomous" electric boilers and construction of a centralized production plant
of the hot water;
- Installation of a separate heat metering system (with "centralised" data collection)
- Installation of an automatic management and control system of the plants (thermostatic
heads and central management unit)
- First floor insulation;
- Attic floor insulation towards attic;
- Replacement of windows in public dwellings
Total EE investment 75.134 €
(VAT included)
Funding- Regional POR 0
FESR
Incentive – Conto 15.000 €
Termico
Landlord co-funding 21.869 €
Energy saving 20%
39
TENDER BASELINE
(9 YEARS)
Fuel supply service Qen 116.492,18 €
Initial intervention safety charges s -0,00 €
Total TOT 188.293,64 €
VAT (22%) VAT 33.228,18 €
EPTA
SdF FROM 1ST TO 9 Y
saving to co-fund the investment 78% 6.082 €
EPTA 12% 900 €
saving for tenants 10% 776 €
consumption consumption centralized heating s.
ante post
19.839 € 12.082 €
40
Municipality owner Castelnovo ne’ Monti
Address Via Rubertelli 10
intervention
Number of floors 3 + cellar floor
Construction features Masonry structure, Clay cement attics, Wooden frames with single glass
Intervention - attic insulation;

- replacement of windows;
- installation of thermostatic valves;
- solar thermal installation;
included)
FESR
Energy saving 34%
41
TENDER BASELINE
(9 YEARS)
Total TOT 140.487,39 €
VAT (22%) VAT 25.695,12 €
EPTA
SdF FROM 1ST TO 9 Y
EPTA 22% 1.080 €
ante post
9.711 € 4.844 €
42
Municipality owner Cavriago
Address Via Fosse Ardeatine 2, 4, 6, 8
intervention
Construction features Reinforced concrete structure with infill panels, Clay cement roofing, Wooden frames with
double glazing
Intervention - attic insulation with polyurethane foam panels and phenolic finish;
- replacement of the two atmospheric heat generators *star with n.2 wall condensing boilers
of latest generation and overall regulatory and technical adaptation of the power plant and
of the warm-up;
included)
Funding- National L.80 0
FESR
Energy saving 37%
43
TENDER BASELINE
(9 YEARS)
Total TOT 254.099,79 €
VAT (22%) VAT 51.099,74 €
EPTA
SdF FROM 1ST TO 9 Y
EPTA 35% 4.320 €
ante post
23.764 € 11.427 €
44
Municipality owner San Martino in Rio
Address Piazza dell’acqua 2
intervention
n. dwellings social 12
housing
Number of floors 4+ attic floor
Construction features Masonry structure, Clay cement roofing, Wooden window frames with camer glass
Intervention - insulation attic;

- replacement fixtures;
- installation of thermostatic valves;
Total EE investment 86.127 €
(VAT included)
FESR
Incentive – Conto 18.500 €
Termico
Landlord co-funding 0€
Energy saving 31%
45
TENDER BASELINE
(9 YEARS)
Total TOT 90.532,05 €
VAT (22%) VAT 14.343,25 €
EPTA
SdF FROM 1ST TO 9 Y
extra fee from Municiplaity 19% 589 €
EPTA 71% 2.160 €
ante post
46
Municipality owner Reggio Emilia 1
Address Via Don Pasquino Borghi 8-9
intervention
Construction features Masonry structure, Latero-cement floor slab , Wooden frames with single glass
Intervention - Insulation of perimeter walls with coat insulation;

- Insulation of the first floor;
- Attic floor insulation;
- Roofing arrangement (waterproofing, life line);
- Adaptation of common electrical systems
- Balcony waterproofing
- Replacing common parts
included)
FESR
Landlord co-funding 87.000 €
Energy saving 53%
47
TENDER BASELINE
(9 YEARS)
Total TOT 339.979,19 €
VAT (22%) VAT 46.160,39 €
EPTA
SdF FROM 1ST TO 9 Y
EPTA 17% 2.880 €
ante post
48
Municipality owner Reggio Emilia 2
Address Via G.Bergonzi 6 8 10|2 4, Via Fenulli 7 9|1 3 5 - Reggio Emilia (RE)
intervention
Construction features Masonry structure, Latero-cement floor slab , Wooden frames with single glass
Intervention - Insulation of perimeter walls;

- Insulation of the first floor;
- Attic floor insulation;
- Boilers substitution
- Windows substitutions
Total EE investment (VAT 2.909.488 €
included)
Funding- National L.80 2.661.866 €
Funding- Regional POR 0
FESR
Energy saving 39%
49
TENDER BASELINE
(9 YEARS)
Initial intervention fee Qriqu 2.619.160,62 €
Operating / maintenance safety charges s man 2.835,00 €
Total TOT 2.750.274,87 €
VAT (22%) VAT 294.493,32 €
Total TOT_VAT incl 3.044.768,20 €
EPTA
SdF FROM 1ST TO 9 Y
EPTA 31% 27.000 €
ante post
50
LEMON work tenders
The work tender investment programme is equal to 4.230.381 € and includes the retrofit of 294
dwellings: 154 are located in the Province of Reggio Emilia and 140 in the Province of Parma, 275
dwellings are owned by the Local Authorities and managed by ACER Reggio Emilia and ACER Parma,
while 19 owned by private landlords. In 54 dwellings there is a centralized heating system and in 240
autonomous boilers.
The dwellings are located in 21 buildings divided in 9 Municipalities.
The energy saving expected with the work tender is 1.788 MWh, the 43% of the actual energy
consumption 4.412 MWh. The CO2 avoided will be 389 t of CO2.
51
The energy efficiency investment of the tender is 4.230.381 € VAT included and foreseen the following
interventions:
 Thermal insulation
 Replacement windows
 Installation of internal control systems on dwellings
 Centralized heating systems substitution
52
Work tender buildings case studies
Municipality owner Reggio Emilia
Address Via Magenta 18-18/1-18/2-18/4-18/5-20
intervention
Construction features Load-bearing solid brick masonry, Clay cement roofing, Miscellaneous fixtures, mainly in
wood with single glazing
Intervention - replacement of windows

- external thermal insulation installation
- insulation of the cellar floor
- heating system substitution
Total EE investment (VAT 1.198.345 €
included)
Funding- Regional POR
FESR
Landlord co-funding 48.362
53
Municipality owner Parma
Address Via Buffolara 41-43-45
Managing subject of the ACER_Parma
intervention
Construction features Load-bearing solid brick masonry, Clay cement roofing, Miscellaneous fixtures, mainly in
wood with single glazing
Intervention - replacement of windows

- external thermal insulation installation
- installation of thermostatic valves
included)
Funding- National L.80
Funding- Regional POR
FESR
54
THE EPTA REGULATION
The Energy Audit and the retrofit programme developed in the LEMON project on 626 dwellings
highlighted that most of the dwelling assessed were in Energy class F and G.
The LEMON retrofit programme have the aim to achieve a deep retrofit of the buildings, including not
only the heating system substitution, but also the installation of thermal insulation, the replacement of
windows and the Installation of internal control systems with an average investment of about € 15.100
(VAT included) per dwelling. However, the consistent energy retrofit programme did not have a great
impact on the energy efficiency classification of the buildings and in most of the cases the dwellings
achieved the C energy class.
According to the LEMON output has been possible to identify the limit of the actual Regional law and
the Municipal regulations. Even if the Regional law is very innovative and introduces the possibility to
increase the renting fee according with the dwelling energy efficiency, this is recommended for high
energy efficiency buildings (class A and A+). During the audit phase of the LEMON project, it was found
out that refurbishing social housing buildings, energetically obsolete, and bringing them to an energy
class of A or higher is not economically sustainable. The best cost-benefit ratio is achieved by
increasing their class by 3 or 4 levels. This means that the modification of the renting fee can be applied
only for new building construction and a few buildings retrofit cases. Therefore, without the chance to
apply this regulation and without a sufficient budget on the municipal balance, many of these
interventions won’t be able to be done at all.
According to this premise, ACER Parma and ACER Reggio-Emilia proposed an Integration of the
Regulation to the Municipalities and to the Union of Tenants and approved it on July 14, 2017. This will
55
provide the possibility to increase the tenants renting fee in all the retrofitted dwellings according with
the energy saving achieved by the investment.
The tenants would therefore benefit of a bill discount corresponding to a minimum of 10% and a
maximum of 30% of the energy savings reached thanks to the refurbishment intervention. The
remaining part will be retained by the property owner until the payback of the investment is reached.
Considering that the average energy saving per dwelling per year is about 400€, it will be possible to
allow the tenants to save an amount of money that can reach up to €120/year, while the remaining
€280/year will be taken back by the property owner through the dwelling fee.
Once the regulation is adopted by the Municipalities, ACER will be able to charge the retrofit costs to
the tenants integrating the total dwelling fee, as it is shown in the D3.5 - Energy performance tenancy
agreement.
56
THE TRAINING ACTIVITY
Policy maker’s training

New financial instruments such as EPC contract require a completely different approach, a need to
change perspective and looking primarily at the planning phase, both technically and economically,
creating uncertainty in Public Administrations due to lack of well-trained expertise to be appointed for
the task. In addition, the planning of a large-scale EPC tender, including access to funding from
European programmes and innovative projects, is quite lengthy and uncertain, due to the initial phases
of project preparation and project funding and to
the fact that the EPC is an atypical contract, i.e.
lacking a legislative framework and then in need of
adequate legal support.
Even if the planning time for a tender is quite long,

through an EPC contract it is possible to achieve
the energy saving objectives to which the
administration has committed itself. The other
methods are focused on the tender and don’t
guarantee for the performance.
The training activity was born from the will to

strengthen the capability of public actors to
develop EPC tenders and financing schemes for
building redevelopment. This need has been
reflected in a series of training meetings, both as
audience at thematic workshops and as through
regional working groups, engaging directly with
regional policy makers.
The main topics of the training meetings were

related to the new financial instruments for the
energy renovation of condominiums, presenting
the technical and economical choices that are the
basis of EPC calls for tenders, the advantages and
criticalities that these contracts may have over the
works contract.
57
Tenants’ training
In the context of energy efficiency, we are rightly concerned about the redevelopment of buildings,
forgetting, however, to properly train those who will then live there, creating the risk that the
household won't be properly managed and won't produce the expected benefits. On the other hand,
the end user, once involved in the project, feels part of it and becomes even keener to accept any
inconvenience. This means investing in the one sole direction and therefore reducing the risks.
Starting a formative dialogue with a target such as the tenant is a new and important challenge as it is
becoming more and more central to change the demand for energy by working on end-user awareness.
In order to begin the path and open the dialogue with the tenants, a
questionnaire has been created to understand the daily habits of the
tenants, how they behave in the management of the house and what
they will to do to change their habits, from both an energy and social
viewpoint. The responses provided important confirmations, such as
the difficulty in saving for fear of having to change habits, and
informations about the possible drivers to push the tenant to change.
Among these, the quality of life inside the apartment is certainly the
most felt and therefore the one on which to focus in order to better
involve them.
The training activity proposal was born from ACER’s experience on

tenants’ need to understand better how to save money on energy
and improve their living conditions.
On the basis of these considerations, The Tenant's Manual have been

redacted and distributed. It is a user-friendly guide that provides tips
and advices on how to immediately save money on the bill, through
the careful management of some actions, together with indications on
how to achieve a better quality of life inside the apartment, from the
risk of mold to environmental comfort.
There are actions that have a very small impact on our habits, a
minimal initial cost, and result in significant savings. On the other hand,
there are actions that seem to us saving ones but reveal to be
completely unefficient. It is not rare to find tenants that try to save
money using traditional electric heaters instead of turning on an
efficient condominium heating system, or molds and other issues
58
generated by the absence of the right external ventilation from the windows. Moreover, a refurbished
apartment will need a different attention from the user, due to the minor breathability of the walls and
the added indoor comfort.
The guide is intended as a support to the practical application of energy saving solutions, taking care
not to place too many restrictions on lifestyle habits and to provide real and easily comparable financial
information. Sometimes, in fact, you do certain actions only because you do not know an alternative or
because you have always done so. The manual has been distributed in paper version to the tenants and
can be downloaded free of charge on the LEMON and ART-ER websites.
In addition to that, training seminars for tenants were dedicated to the issues discussed in The
Tenant's Manual, i.e. the management of the home and the daily habits. Through these meetings
tenants have been involved more in depth, arousing their interest in the topic and stimulating a path of
growth and virtuous dissemination. Another topic discussed in the meetings is the supplementary
regulation based on the performance of the building (the EPTA regulation, discussed in the previous
chapter) and the advantages that this regulation can bring to the tenant, which sees the building he
lives upgraded and, at the same time, an economic saving in his energy bill. With this contract the
saving is going to be shared with the property owner.
59
LESSONS LEARNED AND COMPARISONS
Lessons learned: EPC tender

After the first EPC tender got desert, the feedback from the ESCO were collected in order to
understand the reason of the failure and mitigate the problems occurred. Among them the ESCOs
raised mainly the following problems:
 LEMON foreseen a deep retrofit of the buildings and therefore most of the investment (about
90%) are related to the envelop (insulation and windows) and few investments are addressed to
the heating systems substitution, since most of the heating systems are autonomous boilers.
The ESCos are installers/facilities/utilities and their core business are heating systems
substitution and energy supply, therefore in the LEMON case they have to subcontract most of
the works with low profit for the ESCo;
 Energy efficiency investment are well calculated with feasibility studies, while general
investment connected to the building retrofit are too uncertain and should be quantified with a
project design (electrical system replacement, sheath replacement,). The general investment in
the business plan are about 1M€ and the lack of a project design increase the risk for the ESCo;
 The EPC tender business plan do not provide to the ESCo many profits and the ESCo do not
consider ‘Conto termico’ incentive a secure budget entry, which is assigned to the ESCo to
recover the investment undertaken. Conto termico can be requested to GSE after the energy
efficiency investment are realised, but some ESCo do not have internally the expertise to apply
for the incentive and most of the time they externalise the preparation of the application and
they fail in receiving the incentive. They state they are able to obtain the incentive only in the
50% of the buildings (in ACER 100% is achieved);
 The presence in the building of private owner increase the risk for the ESCo and for those the
ACERs could not guarantee the fee to the ESCo.
The second EPC tender aimed to reduce the risks identified in the first EPC tender by the ESCO:
 The buildings with low profit for the ESCO were substituted with more profitable business plan;
 ACER RE developed the project design of some intervention to define better the investment
costs for the building retrofit and reduce the general costs that could not be quantified with the
feasibility studies. The project design will be delivered to the ESCO after the contract is signed;
 Conto termico incentive beneficiary moved from the ESCo to the ACER, reducing the risk for the
ESCO to be not successful in the incentive request;
60
 To reduce the risk of the landlord co-funding, ACER Reggio Emilia set-up a social fund fed with
the provision coming from the work tender discount offered by the bidder. The social fund can
support the investment of the private owners, that demonstrate they inability to contribute to
the building energy efficiency investment. The loan will be provided by ACER and the landlord
will repay the investment through a monthly fee to ACER.
 A mechanism to anticipate the investment to the ACER has been set up . In this way the ACER
can pay the ESCO and apply for incentives reimbursement.
Works Contract Vs EPC

Taking a look at the data collected by LEMON project regarding the interventions done so far, an
interesting data comes from the comparison between the interventions assigned through the two
programmes, via Works Contract and the ones assigned via EPC tender.
On the assumption that the energy performance contract is more costly in terms of initial energy audit
and assignment than a works contract, it allows:
- bigger investments at once, meaning a greater number of refurbished dwellings
- a lower co-financing on the yearly balance of the Municipality (or the Housing Company if
owner of the building)
Type of Percentage
Total of Co-financing of
procurement of co-
investment municipality/landlords
process financing
- work contract tender 4.230.381 € 1.143.972 € 27%
- EPC tender 5.223.046 € 621.991 € 12%
The percentage of co-financing shifts from a 27% in the Works contract to a 12% in the Energy
Performance Contract, meaning more than 60% of public investment reduction. This data is very
explicative of the potential of EPC contracting system against the more traditional one: charging less
on the municipal economical balance, it allows the municipality to afford more refurbishment
interventions or to concentrate in parallel priorities.
This all without forgetting that in an EPC contract the ESCo will take responsibility for the
maintenance of the building and for its performance over the years following, granting a saving
through time.
61
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D6.

Territory, inhabitants, infrastructure and quality of life

As for the airport system, Emilia-Romagna has three civil airports:

• Bologna-Borgo Panigale Airport

Emilia-Romagna's added value in 2015 was of about 134

Emilia-Romagna is high export-oriented, with an export,

Social Housing in Italy

Evolution of the sector in Italy

 integrated fund system;

 Experimental program of self-construction of housing (Resolution of the Regional Legislative

Results: currently 2 interventions were funded for a total of 480,000 €

Opportunities for the construction market

The work performed in LEMON include:

# Type of impact Revised

ART-ER Attractiveness Research Territory is the Emilia-Romagna

competitive Fee for ACER/co- landlords

LA and capacity Tenant’s

- Phase 1| from check-up to financial plan:

- Phase 2| Development of the tender and definition of financial instruments:

- Phase 3| Publication of the tender, contract signing and works assignment

- Phase 5| communication and dissemination of the results

EPC investment programme

In particular, Axis 4 - Investment Priority 4c - supports:

Urban Regeneration Programme

Tax and VAT incentives for energy efficiency refurbishment

Conto Termico 2.0

Third part financing (Energy Performance Contract)

Specifically, the interventions supported must concern:

The legal framework of the EPC contract

LEMON EPC tender

Fuel supply service fee (Qen) € 280,129.05

The EPC tender include the following documents :

Criteria for evaluating the technical offer:

Intervention - building insulation

Municipality owner Boretto

Intervention - First floor insulation;

Municipality owner Casalgrande

Intervention - replacement of existing oil-fired generator with gas-fired boiler

Intervention - attic insulation;

Intervention - insulation attic;

Intervention - Insulation of perimeter walls with coat insulation;

Intervention - Insulation of perimeter walls;

The dwellings are located in 21 buildings divided in 9 Municipalities.

Intervention - replacement of windows

Intervention - replacement of windows

Policy maker’s training

Even if the planning time for a tender is quite long,

The training activity was born from the will to

The main topics of the training meetings were

The training activity proposal was born from ACER’s experience on

On the basis of these considerations, The Tenant's Manual have been

Lessons learned: EPC tender

Works Contract Vs EPC

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