Energy-Efficient Residential Housing
Energy-Efficient Residential Housing
Business Model Description
Build energy-efficient residential housing and offer custom home design and construction services, utilizing advanced building materials and technologies such as insulated concrete forms (ICFs), geothermal heating and cooling systems, and energy-efficient windows and appliances. Constructing energy-efficient residential housing requires technology, permits, workforce, capital, know-how, land, and sustainable building materials with a high focus on insulation, windows, lighting, sourcing energy, heating, and cooling for energy efficiency. The business model can appeal to clients with environmental awareness who are looking for cost-effective housing solutions in Serbia in semi-urban areas.
Expected Impact
Improve energy efficiency and limit environmental impacts of buildings.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
Disclaimer
UNDP, the Private Finance for the SDGs, and their affiliates (collectively “UNDP”) do not seek or solicit investment for programmes, projects, or opportunities described on this site (collectively “Programmes”) or any other Programmes, and nothing on this page should constitute a solicitation for investment. The actors listed on this site are not partners of UNDP, and their inclusion should not be construed as an endorsement or recommendation by UNDP for any relationship or investment.
The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.
Investment involves risk, and all investments should be made with the supervision of a professional investment manager or advisor. The materials on the website are not an offer to sell or a solicitation of an offer to buy any investment, security, or commodity, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.
Country & Regions
- Serbia: Belgrade Region
- Serbia: Vojvodina Autonomous Province
- Serbia: Šumadija and Western Serbia
Sector Classification
Infrastructure
Development need
Progress towards target SDG 9.1 indicates contradictory trends. Progress is made in road and air transport, and movement away from the target in rail, pipeline, and inland waterway transport. Concerning target SDG 11.6, a decrease in the municipal waste recycling rate is registered (2). The poor state of water infrastructure is identified (3).
Policy priority
The aim of the high-level policy Spatial Plan of Serbia (2021-2031) is better accessibility of traffic, infrastructural, social and communal services, and integrated infrastructure; higher quality of life; economic development and functioning of all/critical activities based on sustainability, circular development and mitigating the impact of climate challenges (4).
Gender inequalities and marginalization issues
About 70% of Roma men and women in the Republic of Serbia live in spatially and socially segregated settlements, in deplorable and inadequate living conditions, and without access to basic infrastructure. The majority of homeless people are women over 65 years old, and about 31% are Roma men and women. Young LGBT* people who mostly live in families that do not approve of their sexual orientation also encounter difficulties, and young people increasingly end up homeless after "outing" (5).
Investment opportunities introduction
Policies of Serbia are focused on the implementation of traffic networks, reconstruction and development of infrastructure; increase in electricity generation and lift energy efficiency (4). 4 billion EUR are planned to be invested in reconstructing the railway infrastructure (7). Renovation of rural infrastructure for 70 million EUR is planned (8).
Key bottlenecks introduction
The age and inefficiency of the transmission and distribution power grid and facilities and the quality of trade and transport-related infrastructure show a decreasing trend (3, 6). Only few local governments have waste collection centers ("recycling yards") (1).
Real Estate
Development need
Serbia's real estate sector needs development in residential and tourism segments. Construction of new energy-efficient housing is slow, with outdated units needing renovation. The tourism sector presents opportunities for developing accommodations like hotels and resorts due to Serbia's cultural and natural heritage (4).
Policy priority
Serbia's real estate focus lies on housing support, management, maintenance, and improvement of residential buildings, primarily through energy efficiency. Rehabilitation and reconstruction of informal settlements and encouraging social inclusion and cohesion are priorities within defined urban development programs (4).
Gender inequalities and marginalization issues
The gender ratio in the field of the mortgaged property is an essential indicator of credit standing as this type of property is used as collateral for buying real estate or investing in a business. Data from the Republic Geodetic Authority from 2019 reveals a significantly higher share of men who own mortgaged property at 65% (9).
Investment opportunities introduction
Serbia is the most competitive in obtaining building permits, ranking 9th among the most attractive destinations for investments. This means a reduction in procedure costs by 18% (4).
Key bottlenecks introduction
Considering the energy efficiency focus in Serbia's real estate, investing in energy-efficient homes or renewable energy systems can be uncertain and may not provide the returns investors expect due to unpredictable demand, as much as consumer seasonality character in hospitality (4).
Real Estate
Pipeline Opportunity
Energy-Efficient Residential Housing
Build energy-efficient residential housing and offer custom home design and construction services, utilizing advanced building materials and technologies such as insulated concrete forms (ICFs), geothermal heating and cooling systems, and energy-efficient windows and appliances. Constructing energy-efficient residential housing requires technology, permits, workforce, capital, know-how, land, and sustainable building materials with a high focus on insulation, windows, lighting, sourcing energy, heating, and cooling for energy efficiency. The business model can appeal to clients with environmental awareness who are looking for cost-effective housing solutions in Serbia in semi-urban areas.
Business Case
Market Size and Environment
> USD 1 billion
Serbia requires USD 7-8 billon energy production to meet 2030 Green Agenda (22).
Only one residential complex of 50,000 m2 requires an investment of USD 50 million. Considering there are about 30 such projects in Belgrade and Novi Sad, the existing ones provide an investment value of USD 1.5 billion (18).
Indicative Return
15% - 20%
The return for energy-efficient residential housing depends on a specific construction project, the location and quality of construction inputs. The average return on investment rate based on discussions with investors from Novi Sad and Belgrade is between 15-20%, considering the current price trend per square meter (18).
Investment Timeframe
Medium Term (5–10 years)
Although the initial investment in energy-efficient residential housing involves 15% higher costs compared to a conventional house, already in the first 10 years of use, those costs equalize (24).
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Capital - CapEx Intensive
Impact Case
Sustainable Development Need
The inefficiency of many energy processes is present in the Republic of Serbia. Along with low energy efficiency in all energy consumption sectors, a pervasive use of electricity for heating purposes, especially in households, is characteristic (4).
According to the Our World in Data based on the Global Carbon Project (2022), CO2 emissions in the Republic of Serbia were 4.23 ton per capita in 2021. Comparing it with 2020, it fell by almost 2 tons (21). Serbia buildings are the biggest energy consumer, with 46% of consumption (38).
The share of electricity from low-carbon sources in the Republic of Serbia in 2021 was 32.88%. Besides, the percentage of electricity production from fossil fuels, mainly coal, in 2021 was 67.12% (21).
Gender & Marginalisation
Women are often underrepresented in the construction industry as much as other marginalized groups due to high intensity of labour work (19).
People with disabilities generally are disproportionately exposed to household pollution due to the use of traditional cooking methods, such as wood or coal, resulting in negative health effects, as per the UN Flagship Report (41).
Expected Development Outcome
Residential construction businesses based on energy-efficient solutions have the potential to make stable and reduce the consumption of energy by the most significant energy source, namely buildings (38).
Residential construction businesses based on energy-efficient solutions help reduce the production of electricity from fossil fuels by reducing the amount of energy needed to heat and cool the houses (38).
Gender & Marginalisation
Energy-efficient residential housing results in real savings for families and would result in healthier, more decent places to live (19).
Energy-efficient residential housing, such as whole-home weatherization and efficient heating and cooling equipment, lowers household energy use and energy burdens over the long term while reducing carbon emissions, improving health and comfort, and building local employment opportunities (43).
Energy-efficient residential housing enables the provision of sufficient energy for household needs, reduces energy costs and the vulnerability of women due to their roles in households and lower economic power, and promotes a more equitable distribution of community-level benefits.
Primary SDGs addressed
11.6.2 Annual mean levels of fine particulate matter (e.g. PM2.5 and PM10) in cities (population weighted)
21.74 (2019) (23).
N/A
13.2.2 Total greenhouse gas emissions per year
30.87 million tons (2021) (39).
N/A
7.3.1 Energy intensity measured in terms of primary energy and GDP
1.98 kWh (2018) (40).
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Outcome Risks
The residential housing sector generates environmental externalities directly, through the use of materials in construction and demolition (42).
The residential housing sector impacts the environment indirectly, through the energy consumed during construction and use of residential buildings (42).
The housing sector is also related to transport-related environmental externalities, as spatial development patterns determine the extent to which urban mobility depends on car use (42).
A residential structure implies the use of land, which in many cases is relatively scarce and may have other productive uses (42).
Impact Risks
Building efficient and renewable materials can be more expensive and time-consuming, which leads to higher upfront costs and may prevent some from pursuing it (17).
Energy-efficient residential housing poses technical risks associated with the proper design, installation, and maintenance of energy-efficient systems and technologies, which may limit the uptake (16).
Cooling components use natural resources that do not give the homeowners complete control over temperatures, which may lower the impact (17).
If not built in an adequate location, energy-efficient houses may not take advantage of natural resources, such as energy from solar or geothermal energy (17)
Energy-efficient residential housing may be unaffordable for marginalized groups due to higher upfront costs (17).
Impact Classification
What
Residential housing construction based on energy-efficient solutions minimizes the use of energy in buildings sector, limits GHG emissions and increases the air quality in Serbia.
Who
Local communities, construction companies, home appliance manufacturers, consumer goods companies, and consumers benefit from GHG emission reduction and increased demand.
Risk
Includes technical risks associated with proper design and installation, higher upfront costs, affordability, consumer adoption, consumer perception, and ongoing maintenance.
Impact Thesis
Improve energy efficiency and limit environmental impacts of buildings.
Enabling Environment
Policy Environment
The Spatial Plan of the Republic of Serbia, 2021 refers to the concept of sustainable housing, the development of which is based on a critical appreciation of the principles of environmental protection, economic efficiency, social inclusion and participation, and cultural adequacy (4).
According to the Sustainable Urban Development Strategy of the Republic of Serbia, 2019, compact cities' advantages are their higher energy efficiency and lower impact on pollution, primarily due to the mixed-use of space and higher population density (3).
The Fourth Action Plan for Energy Efficiency of the Republic of Serbia, until 2021 foresees energy efficiency measures in buildings (25).
Strategic directions of action defined by the Energy Development Strategy of the Republic of Serbia, 2015 includes the introduction of renewable energy solutions in the building sector, primarily in the public sector (6).
The long-term strategy for encouraging investment in the restoration of the national building stock, 2022 defines the climate-neutral building construction and reorganization principle. It is based on the general goal of Serbia, namely the CO2 reduction by 31% in 2050 (27).
Financial Environment
Financial incentives: Serbia offers subsidies and grants for energy-efficient retrofits and upgrades. The available funds amount to 54 million dinars ( USD 480,000). The maximum funds cannot exceed 10 million dinars (USD 90,000) per Local Government Unit (33).
Financial incentives: In 2022, subsidies for the replacement of carpentry, insulation, replacement of boilers, and for solar panel installation amounted to 1 billion dinars (USD 9 million), received by municipalities (15).
Financial incentives: GEFF is a credit line for green financing of the EBRD that provides funds for financing energy-efficient technologies in households. Funds of 135 million EUR are allocated for the Western Balkans through the GEFFI and GEFFII programs (12, 14).
Other incentive: EBRD is partnering with Ministry of Mining and Energy and local authorities to launch energy efficiency program for housing sector. It's also working with EU funding to align energy efficiency regulations with EU standards through Regional Energy Efficiency Program (13).
Regulatory Environment
The Rulebook on the Energy Efficiency of Buildings, 2011 prescribes the energy properties and the method of calculating the thermal properties of high-rise buildings, as well as the energy requirements for new and existing buildings (28).
The Law on Planning and Construction, no. 52, 2021 defines the improvement of energy efficiency as reducing the consumption of all types of energy, saving energy, and ensuring sustainable construction by applying technical measures, standards, and conditions (29).
Based on the Law on Environmental Protection, no. 95, 2018, every activity must be planned and implemented in such a way as to cause the slightest possible change in the environment and reduce space load and consumption of raw materials and energy in construction (30).
The Law on Renewable Energy Sources, 40/2021-23 provides regulations and guidelines for energy-efficient design, construction, and retrofitting of buildings, as well as incentives for using renewable energy sources and promoting energy efficiency (31).
The Law on Energy, no.40, 2021 regulates the production, distribution, and supply of thermal energy as energy activities, besides all related to energy-efficient housing (32).
Marketplace Participants
Private Sector
Solarna Dolina-Invest Doo, Strabag D.O.O., W.D. Concord West Doo, Vinci Terna Construction Jv Doo Beograd-Surčin, Energoprojekt Visokogradnja A.D. Beograd, Energogroup Doo Beograd, Starting Doo Beograd, Takenaka Europe GMBH Branch Belgrade.
Government
Ministry of Construction, Transport and Infrastructure, Ministry of Public Investments, Ministry of Environmental Protection, Ministry of Mining and Energy, Ministry of Science, Technological Development and Innovation.
Multilaterals
United Nations Development Programme (UNDP), Western Balkans Enterprise Development and Innovation Facility (WBEDIF), World Green Building Council, European Bank for Reconstruction and Development (EBRD).
Non-Profit
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), OIE Srbija, Serbia Green Building Council (SrbGBC).
Target Locations
Serbia: Belgrade Region
Serbia: Vojvodina Autonomous Province
Serbia: Šumadija and Western Serbia
References
- (1) Ministry of Environmental Protection, Waste management program in the Republic of Serbia for the period 2022-2031, 2022. https://ekologija.gov.rs/sites/default/files/2022-02/program_upravljanja_otpadom_u_rs_za_period_2022-2031._god_0_2.pdf
- (2) Statistical office of the Republic of Serbia, Progress Report on the Implementation of Sustainable Development Goals by 2030 in the Republic of Serbia, 2022. https://www.stat.gov.rs/media/353537/progress-report-on-the-implementation-of-sustainable-development-goals-by-2030-in-the-republic-of-serbia.pdf
- (3) Ministry of Construction, Transport and Infrastructure, Strategy for Sustainable Urban Development of the Republic of Serbia until 2030, 2019. https://www.pravno-informacioni-sistem.rs/SlGlasnikPortal/eli/rep/sgrs/vlada/strategija/2019/47/1/reg
- (4) Ministry of Construction, Transport and Infrastructure, Draft of the Spatial Plan of the Republic of Serbia from 2021 to 2035, 2021. https://www.mgsi.gov.rs/sites/default/files/PPRS%20Nacrt.pdf
- (5) Ministry of Labour, Employment, Veteran and Social Affairs, Strategy of Prevention and Protection Against Discrimination for the period from 2022 to 2030, 2022. https://www.pravno-informacioni-sistem.rs/SlGlasnikPortal/eli/rep/sgrs/vlada/strategija/2022/12/2
- (6) Sustainable Development Report 2022, Sustainable development report 2022-Serbia, 2023. https://dashboards.sdgindex.org/profiles
- (7) B92.net, Serbia invests 4 billion euros: The complete reconstruction of the railway is planned, 2019. https://www.b92.net/biz/vesti/srbija/ulaze-se-cetiri-milijarde-evra-u-planu-celokupna-obnova-zeleznice-1563466
- (8) Cordmagazine.com, Renovation of rural infrastructure for 70 million euros, 2022. https://cordmagazine.com/sr/srbija/obnova-seoske-infrastrukture-za-70-miliona-evra/
- (9) FAO, National gender profile of agriculture and rural livelihoods – Serbia. Budapest, 2021. https://doi.org/10.4060/cb7068en
- (10) USAID, Guide through building permits, 2016. http://gradjevinskedozvole.rs/Files/00631/Vodic-kroz-dozvole-za-izgradnju.pdf
- (11) Publications | Statistical Office of the Republic of Serbia, n.d. https://www.stat.gov.rs/sr-latn/publikacije/
- (12) ProCredit Bank, Energy efficiency loans with up to 20% return, n.d. https://www.procreditbank.rs/stanovnistvo/krediti/krediti-za-energetsku-efikasnost-sa-do-20-povracaja
- (13) Balkan Green Energy News, Serbia’s Vojvodina province to invest EUR 16 million in energy efficiency of public buildings, 2023. https://balkangreenenergynews.com/serbias-vojvodina-province-to-invest-eur-16-million-in-energy-efficiency-of-public-buildings/
- (14) Intesa Sanpaolo Bank, Loans for improving energy efficiency, n.d. https://www.bancaintesa.rs/stanovnistvo/krediti/krediti-za-unapredjenje-energetske-efikasnosti.html
- (15) Balkan Green Energy News, Saved, V, A competition has been announced for subsidies for solar panels for households in ten cities in Serbia ,2022. https://balkangreenenergynews.com/rs/raspisan-konkurs-za-subvencije-za-solarne-panele-za-domacinstva-u-deset-gradova-u-srbiji/
- (16) U.S. Department of Energy, Residential HVAC installation practices - energy, 2018. https://www.energy.gov/sites/prod/files/2018/06/f53/bto-ResidentialHVACLitReview-06-2018.pdf
- (17) Epstein, L., Energy-efficient buildings: Investing pros, cons, 2022. https://www.investopedia.com/investing/pros-and-cons-investing-energyefficient-buildings/
- (18) Peterhof Consulting stakeholder consultations online on 17th of February, 2023.
- (19) Habitat for Humanity, Transforming low-income communities through energy efficiency,n.d. https://www.habitat.org/stories/transforming-low-income-communities-through-energy-efficiency
- (20) Statistical office of the Republic of Serbia, Energy Consumption in households in Republic of Serbia, 2021.
- (21) Our World in Data, Ritchie, H., Roser, M., & Rosado, P. CO2 emissions, 2020. https://ourworldindata.org/co2-emissions
- (22) Jelovac , A. The real estate sector is turning to Energy EFFICIENT Solutions These are the conclusions of the REMHUB:2022 conference, 2022. https://www.blic.rs/biznis/vesti/sektor-nekretnina-se-okrece-energetski-efikasnim-resenjima-ovo-su-zakljucci/135sg7s
- (23) World Health Organization, SDG indicator 11.6.2 concentrations of fine particulate matter (PM2.5), World Health Organization, n.d. https://www.who.int/data/gho/data/indicators/indicator-details/GHO/concentrations-of-fine-particulate-matter-(pm2-5)
- (24) Construction, S. S, How to study energy efficiency and energy passport, 2020. https://www.gradnja.rs/kako-do-elaborata-energetske-efikasnosti-i-energetskog-pasosa/
- (25) Ministry of Mining and Energy, The Fourth Energy Efficiency Action Plan of the Republic of Serbia has been prepared for the period until December 31, 2021. https://mre.gov.rs/sites/default/files/2021/10/4.apee-26avg2021.pdf
- (26) Ministry of Mining and Energy, Energy Development Strategy of the Republic of Serbia until 2025 Years with projections until 2030. Year : 101/2015-36. https://www.pravno-informacioni-sistem.rs/SlGlasnikPortal/eli/rep/sgrs/skupstina/ostalo/2015/101/1/r
- (27) Legal information system of the Republic of Serbia, Long-term strategy for encouraging investments in the renovation of the national building stock of the Republic of Serbia by 2050: 27/2022-5. https://www.pravno-informacioni-sistem.rs/SlGlasnikPortal/eli/rep/sgrs/vlada/strategija/2022/27/1/reg
- (28) Regulations on energy efficiency of buildings. Regulation on the energy efficiency of buildings, 61/2011. https://www.paragraf.rs/propisi/pravilnik_o_energetskoj_efikasnosti_zgrada.html
- (29) Planning and Construction Law, Law on Planning and Construction, 52/2021. https://www.paragraf.rs/propisi/zakon_o_planiranju_i_izgradnji.html
- (30) Environmental Protection Act, The Environmental Protection Act, 76 and 95/2018. https://www.paragraf.rs/propisi/zakon_o_zastiti_zivotne_sredine.html
- (31) Law on the Use of Renewable Energy Sources:. Legal and Information System of RS, 40/2021-23. https://www.pravno-informacioni-sistem.rs/SlGlasnikPortal/eli/rep/sgrs/skupstina/zakon/2021/40/2/reg
- (32) Energy Law. The Energy Act, 40/2021. https://www.paragraf.rs/propisi/zakon_o_energetici.html
- (33) Ministry of Mining and Energy, Public Call for allocation of funds for financing the Energy Rehabilitation of Residential Buildings, PE 2/21. https://www.mre.gov.rs/lat/aktuelnosti/javni-pozivi/javni-poziv-za-dodelu-sredstava-za-finansiranje-programa-energetske-sanacije-stambenih-zgrada--porodicnih-kuca-i-stanova-koji-sprovode-jedinice-lokalne-samouprave--jp-2-21
- (34) BitToBuzz, Kosmaj Gardens. Kosmaj Gardens, n.d. https://kosmajskivrtovi.rs/
- (35) Solarna Dolina, Solarna Dolina // VRT URBANOG stanovanja // Novi Sad, 2021. https://solarnadolina.rs/
- (36) Telepska Dolina, Samardzija, S, n.d. http://www.telepskadolina.com/index.html
- (37) Eco Settlement, Sumadijski kutak, 2022. https://sumadijskikutak.net/
- (38) German companies are looking for domestic partners for energy efficient construction - buildings the largest energy consumers in Serbia, 2019. https://www.ekapija.com/news/2510484/nemacke-kompanije-traze-domace-partnere-za-energetski-efikasnu-gradnju-zgrade-najveci-potrosaci
- (39) Our World in Data, Ritchie, H., Roser, M., & Rosado, P, Serbia: CO2 Country Profile, 2020. https://ourworldindata.org/co2/country/serbia
- (40) Our World in Data, Energy intensity, 2021. https://ourworldindata.org/grapher/energy-intensity?tab=chart&country=~SRB
- (41) Energy Institute blog, Disability and energy – leaving no one behind, 2019. https://blog.energyinst.org/2019/12/03/disability-and-energy-leaving-no-one-behind/
- (42) OECD iLibrary, Home. Brick by Brick : Building Better Housing Policies, n.d. https://www.oecd-ilibrary.org/sites/96aaa66a-en/index.html?itemId=%2Fcontent%2Fcomponent%2F96aaa66a-en
- (43) ACEEE, Low-income energy efficiency programs, n.d. https://www.aceee.org/topic/low-income