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Energy-efficient renovation of investment properties: the regulatory conditions are changing

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23.01.2023 | 3 minutes

Owners of apartment buildings are challenged on two fronts. In addition to constantly-changing and ever-stricter energy regulations which call for renovation and retrofitting, massive increases in oil, gas and electricity prices are also increasing the pressure to carry out energy-efficient property renovations and to incorporate more renewable energy sources.

It’s difficult to keep track of the many different regulatory, political and logistical factors. Someone who knows his way around the subject better than most is Dr. Johannes Gantner, head of the Sustainability service unit at pom+.

UBS key4 mortgages: Mr. Gantner, why is now the right time to check a building’s energy usage and carbon footprint?

The legal requirements are becoming progressively stricter. This applies both at federal and cantonal level. Sooner or later a new law on CO2 emissions will be introduced. In practice we have seen that the value of a property is affected if the owner does not act promptly. This leads to the property losing value if it does not meet the legal requirements.

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Don’t all properties require major renovation at certain intervals anyway?

Yes. Currently, an above-average number of buildings are due to undergo a comprehensive renovation cycle. This means a considerable investment, including improving the building envelope, fitting new windows and often converting the heating system. This cycle affects every property. It’s important that as many property owners as possible carry out the required steps before 2030. Those who wait may find it becomes more expensive later on.

Why is that?

Whatever is not done now will only have to be done later. The requirements for buildings are constantly increasing with a view to gradually achieving the overarching goals of Swiss climate policy by the year 2050. This means we are moving in the direction of zero emissions.

Which buildings are at the greatest risk of losing value? Those in rural locations?

Generally speaking, the value of unrenovated buildings will rise less than those on the market as a whole. This also applies to those located in cities. We need to remember that that the rental market is more important in rural locations. In rural areas where occupancy rates are lower, I may not be able to recoup the cost of the necessary investment via rental income, or only partially. In addition, net income for owners will decrease if ancillary costs such as energy prices increase sharply. In the countryside, a number of effects can combine to reduce profitability.

The situation is made more complicated by talk of increased construction costs and supply bottlenecks. What consequences does this have for private property owners or communities of heirs?

Those with little construction experience will find themselves under pressure when it comes to project management. In the case of a family-owned property or inheritance, coheirs often need to be compensated. Some property owners will then quickly reach their financial limit. Today, in contrast to previous generations, it is probably more common for privately-owned properties to be sold.

Dr. Johannes Gantner
Head of Service Unit Sustainability at the consulting firm pom+ in Zurich

About our interview partner

Dr. Johannes Gantner is head of the Sustainability service unit at the consultancy firm pom+ in Zurich. He studied civil engineering and environmental science at the University of Stuttgart and joined pom+ as a senior consultant in 2018. He has led the sustainability division since 2019. He also holds a master’s degree in sustainable energy management and energy technology.

Just two to three years ago, one objection to energy-efficient renovations or the switch to renewable energy was that it involves considerable investment. Is this correct?

It is indeed the case that cost effectiveness changes based on inflation and energy prices. When converting to a renewable energy source such as a heat pump with geothermal probe, the price of oil will impact the amortization period. If energy prices rise, the amortization period of investments will be shorter.

What about photovoltaics (PV)?

PV panels and their efficiency have improved considerably in recent years. The cost of producing one kilowatt hour of electricity from your own PV system is around 12 centimes. That’s much cheaper than electricity from the grid.

Is it technically possible to operate a heat pump with electricity from your own PV system?

Anyone who renovates their home should always incorporate a PV system where possible. PV panels, which convert solar energy to electricity, are now very efficient and economical. Many people already plan to add battery storage to their private PV system. Those who are able to harness the sun’s energy can thereby meet a higher proportion of their energy needs themselves. This has financial benefits and also carries an emotional significance for many people. It’s simply not the same as getting electricity from the grid. In addition, nowadays there are good technical solutions which allow solar energy to be fed into a thermal storage unit. This offers an excellent way to compensate for the fluctuations in solar energy between day and night. The energy in a thermal storage unit can be used for heating and to provide hot water. A combination of various measures saves on costs and can also make a significant contribution to sustainability.


On the property market, buildings which have not undergone energy-efficient renovation will become less and less attractive. Those who do not start planning now and do not carry out renovations and make the switch to renewable energy will find themselves at a disadvantage. Renovations not carried out now will have to be undertaken later at an increased cost. Those who wait too long risk uncertainty among tenants as well as financial disadvantages. Properties which no longer meet the requirements will lose value.

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