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Czech News in English » Business » Fighting crisis through insulation

Fighting crisis through insulation

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A massive project to insulate Czech houses launched last week. According to experts, it will help fight the economic crisis. And it will be a more powerful weapon that the planned car-scrapping bonuses.

While some CZK 2.5 billion is to go toward the scrapping bonus, based on an agreement between the ODS and the ČSSD, and will be sufficient to help fund the purchase of some 80,000 cars, some CZK 25 billion will go toward new insulation and should help one quarter of all households. “It will hep mainly small regional companies and contractors. The effect will be noticeable,” says Jaroslav Míl, head of the Confederation of Industry of the Czech Republic.

But he criticised the government’s approach. According to Míl, the state should not hand out money but rather offer tax relief to people willing to invest into the reconstruction of buildings.

30,000 new jobs
The insulation project will also help keep unemployment at bay. According to economic surveys, it could help maintain or create up to 30,000 jobs. The cost of labour for insulation is at 50% and the expenses for replacing a boiler is about 30%.

According to economist Miroslav Zámečník, the scrapping bonuses will only have about half that effect. What’s more the insulation should save households CZK 1,000 a year. New cars, on the other hand, will require an “investment” on the part of the consumer.

Thanks to the ministry’s programme, firms that process energy audits should also profit. The audits are one of the supporting documents that must be added to applications for subsidies. “I must say that I didn’t expect such high interest,” said Tomáš Chadim from Seven, a company that prepares this type of audit. Experts will recommend the best way that each house can be insulated.

The money for insulation will not come from Czech state coffers. The fist part of the subsidy should be transferred to the state from Japan. The money comes from the Czech Republic’s sale of carbon credits to Japan. The state can only use the money from the sale for ecological projects, more specifically, projects to limit greenhouse gases.

Not for pre-fab houses
People are able to start applying for money from the first CZK 10 billion package as of last Wednesday at branches of the State Environmental Fund.

In a few days, people will also be able to apply for loans to go along with the subsidies at thousands of bank branches.

The insulation subsidies will only be able to be used for projects started after 1 April. The subsidies also cannot be used for the insulation of pre-fab houses. The ministry has a different subsidy programme for pre-fab houses. People, municipalities, co-ops and companies can only apply for subsidies for single-family houses, apartment buildings and new buildings.

The amount of money provided will depend on the area of the house. For the complex insulation of an older building, applicants will be able to receive CZK 1,950 per square metre, and the total amount can reach up to half of the total expenses. For partial insulation, applicants will be able to receive CZK 850 per square metre.

If switching to a biofuel heating system, people will be able to receive a subsidy that covers 60% of the total expenses, totalling up to CZK 80,000.

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