Financing and business models

The SmartBuilt4EU project has set up four task forces investigating issues related to smart buildings: their objective is to identify the remaining challenges and barriers to smart building deployment, and the associated research and innovation gaps that should be addressed in the near future. Task force 4 (“Cross-cutting issues”) addresses the transversal requirements (Business & Finance, data, education & upskilling) to support the market uptake of smart buildings, and the strengthening of the related ecosystem. The first topic addressed by this task force and presented in this paper is Financing and business models. Smart building solutions are a strong leverage for increased energy efficiency in buildings, improved quality of life for occupants and added value for work performance. However, innovative business models and smart financing mechanisms are required to support and accelerate the ‘smartening’ of the EU building stock, which is not happening at the required pace to reach the EU goal of climate neutrality. This white paper therefore aims to provide an overview on what is known and what should be further investigated to answer the following questions: Innovative business models to finance the roll-out and operation of Smart Building solutions have already been demonstrated, but their replication is very slow: how can this replication be supported? Smart technologies can trigger new business opportunities and revenue streams for upgraded, innovative energy services which valorise energy savings and flexible consumption and generation: how can this key enabling role be fostered? In its first part, this paper provides a state of the art regarding the following issues, specific attention being paid to EC-funded projects: Existing innovative business models: A variety of business models for the smartening of the building stock exist today (both for existing and for new buildings), and more are being developed by R&D projects and market actors. However, they have so far mostly focussed on energy efficient renovation and less on making buildings smart(ready) Business model innovation: the majority of the new business models focus on experience and offering. The concept of “product as a service”, the integration of co-benefits (well-being) and the development of partnerships with a co-creation process are examples of such innovations Stakeholders’ involvement and business model co-creation: In co-created business modelling, stakeholders ideate together outside their traditional boundaries and experiment with value propositions, thereby facilitating market success. A brainstorming process enabled to identify some key barriers and drivers regarding the development and implementation of smart financing and business models. Based on the State of the Art and the barriers and drivers, a number of research and innovation gaps were identified including: R&D, Demo, regulation & legal framework, certification & standardisation and scaling up & industrialisation. The gaps will feed the elaboration of the Strategic Research and Innovation Agenda on smart building, together with some recommendations targeting policy makers