Buildings account for 40% of final energy consumption in the European Union, making them a central focus of the continent’s energy transition. The Solas Capital white paper argues that improving energy efficiency in buildings is no longer optional—it is a regulatory and economic imperative. With most of the EU’s building stock still classified as energy inefficient, the potential for emissions reduction and cost savings is substantial.

The Energy Performance of Buildings Directive (EPBD) is the cornerstone of this transformation. It mandates that all non-residential buildings must meet minimum energy performance standards by 2030 and 2033, respectively. This shift from voluntary upgrades to mandatory compliance is creating a predictable pipeline of renovation projects, which in turn is attracting institutional investment. However, the financing gap remains significant, with €149 billion needed annually to meet EPBD targets.

To bridge this gap, innovative financing models such as Energy-as-a-Service (EaaS) are gaining traction. These models allow building owners —particularly SMEs— to implement efficiency upgrades without upfront capital. By aligning energy savings with financing repayments, EaaS enables immediate benefits while preserving financial flexibility. Solas Capital’s approach aggregates small-scale building projects into investable portfolios, making them accessible to large investors.

The regulatory landscape is further reinforced by the EU Taxonomy and Corporate Sustainability Reporting Directive (CSRD). These frameworks incentivise energy-efficient buildings through preferential access to green finance and mandatory sustainability disclosures. As inefficient buildings face an increasing risk of becoming stranded assets, the market is shifting decisively towards high-performance properties. The white paper concludes that energy efficiency in buildings is not only a climate solution—it is a strategic investment opportunity.

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