Towards a climate neutral EU:
efficient allocation of EU funds

A glass half-empty: subsidising residential photovoltaic systems and electrification of heating systems combined with photovoltaic systems, but without sufficient energy-efficiency measures

Organisation: Clean Air Action Group, Hungary Website: Added: June 02, 2022
Project start date: December 06, 2021
Project end date: June 30, 2026


The project envisages the provisioning of 100% non-refundable support for the installation of photovoltaic systems and the electrification of heating systems in combination with photovoltaic systems for 45,000 households. In the case of electrification of the heating system (heat pump implementation), energy-storage units and the replacement of doors and windows can also be supported: however, no other energy-efficiency improvement measures (such as the deep renovation of buildings) are supported or required. Privately owned residential buildings are targeted where the annual per capita income is less or equal to the annual mean per capita income in Hungary in 2020: families with children under 18 are prioritised. The project is planned to be funded by the European Recovery and Resilience Facility (RRF). According to the RFF, the main goals of the measure are to reduce emissions from residential heating and to reduce energy poverty.

Financial data

Total budget: approx. EUR 530 million (HUF 201.6 billion. EU contribution: approx. EUR 418 million (HUF 158.76 billion). Share of EU funding: 80%


If energy efficiency is to be prioritised, increasing the share of renewable energy in final energy consumption is a recommended measure. The electrification of heating is effective only if the heating demand of buildings is minimised first. Electrifying the heating of Hungarian households in their current condition is not only a waste of energy and financial resources, but increased energy demand would also overload electric grid capacities and would generate additional emissions. Therefore, prior to the electrification of heating, deep renovation of buildings should be supported. Heating-electrification subsidies should contain energy-efficiency criteria of close-to zero-heating energy demand. The current project should support adequate renovation measures prior to supporting the electrification of heating. The subsidy for battery storage is a wasteful and inefficient use of resources in current market conditions (though this may change in the future); instead of this, support for deep renovations would be more efficient. National building-renovation programmes should also have energy-efficiency criteria (the national 50% home renovation programme for 2021-22 contained no such criteria). The project should be focused on people living in energy poverty. The maximum income criterion (national mean income) of the project is too high; the 100% non-refundable support is “too favorable”, as many people eligible for support could afford the total, or at least partial financing of developments from their own income (or, for example, an interest-free loan). In addition, the expected boost of applications will tie up a lot of spare capacity and raise prices, thus removing the possibility of targeted support to the poor. The maximum income threshold should be lower (e.g., the minimum wage), to avoid the unnecessary allocation of public funds to affluent people.

Information sources

Official websites of the government: CSOs’ opinion::

Other info

European Climate Initiative (EUKI)
This project is part of the European Climate Initiative (EUKI). EUKI is a project financing instrument by the German Federal Ministry for Economic Affairs and Climate Action (BMWK). The EUKI competition for project ideas is implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. It is the overarching goal of the EUKI to foster climate cooperation within the European Union (EU) in order to mitigate greenhouse gas emissions.