Five-year transition period ended: nearly zero-energy building requirements extended to new small residential buildings
As of June, newly built small residential buildings in Estonia must also meet stricter energy efficiency requirements. Single-family homes with a heated area of up to 220 square meters must now be built to meet A-class requirements instead of the previous B-class, which requires the use of renewable energy.
According to Urmas Uibomäe, CEO of Kinnisvara24, the new requirements bring additional costs to small residential builders, although technically the change is not major. "Most small residential buildings being built today already meet B-class requirements anyway. The main difference with A-class is the obligation to produce renewable energy, which usually means installing solar panels," Uibomäe explained.
Which buildings are affected by the changes
The updated requirements apply to buildings for which a building permit application or building notice is submitted after June 1, 2025. Projects with applications submitted before this date may continue under the previous regulations.
The energy efficiency number of nearly zero-energy buildings must remain below certain limit values: for small residential buildings with a heated area of less than 120 square meters, 145 kWh/(m²·a), for areas of 120-220 square meters, 120 kWh/(m²·a), and for buildings with an area exceeding 220 square meters, 100 kWh/(m²·a).
Solar panels are not always mandatory
Although the use of renewable energy is necessary to achieve A-class, the law provides for exceptions. "A solar energy system must be installed only if it is both economically reasonable and technically feasible," noted Uibomäe.
A system with a minimum capacity of one kilowatt and efficiency of at least 70 percent of the annual output of an optimally oriented solar energy system is considered economically justified. Technical obstacles may include, for example, insufficient power grid capacity, the need for primary grid reinforcement work, or lack of suitable roof area.
The need for solar panel installation is assessed already during the design phase. The designer or energy efficiency specialist analyzes the possibilities of a specific building and documents their reasoning regarding the building's energy efficiency. This information is submitted along with the building permit application or building notice to the local municipality, which verifies the reasonableness of the submitted arguments.
"It is important to emphasize that mere unwillingness or an excessively high price are not sufficient reasons. The decision must be based on objective criteria established in the regulation," Uibomäe clarified. If the local municipality disagrees with the designer's assessment, it may request additional evidence or expert opinion. "Failure to meet energy efficiency requirements may later prevent the building from obtaining a permit for use," warned Uibomäe.
If solar panel installation proves impossible, the building's energy efficiency must meet at least B-class requirements even without using renewable energy.
Prices and profitability
Installing a solar energy system on a small residential building costs approximately 10,000 to 15,000 euros.
If the power grid requires reinforcement work, however, the total cost can nearly double – Elering's processing and transaction fees together with primary grid construction work can amount to approximately 10,000 euros more. In the latter case, panel installation is no longer economically justified.
"According to field experts' assessments, for a typical household, the investment in solar panels pays for itself in 8-15 years, depending on electricity consumption patterns and market prices. Given that solar panels typically come with a 25-year warranty, this is a profitable undertaking," assessed Uibomäe.
Building A-class single-family homes is approximately 10-15 percent more expensive compared to C-class. Compared to B-class, the price difference remains within 5-8 percent, as most energy efficiency requirements are already met.
Energy-efficient homes command a premium on the real estate market
Of the 2,831 houses currently for sale on the Kinnisvara24 portal, 195 are A-energy class properties. "A-class single-family homes cost on average 5-15 percent more on the market than homes with lower energy efficiency. The difference depends on the specific comparison – whether it is B-, C-, or D-class," Uibomäe pointed out.
Banks also boost the popularity of energy-efficient homes by offering more favorable loan terms for purchasing so-called green buildings. "Buyers are increasingly understanding that the higher initial investment is offset by lower operating costs and more stable value in the future," he adds.
Technical solutions in nearly zero-energy buildings
Building an A-class house requires a comprehensive approach. In addition to solar panels, all low-energy building or B-energy class requirements must be met – this means quality external wall insulation, triple-glazed windows, heat recovery ventilation, and an efficient heating system, which is typically an air-water or ground source heat pump.
A heat-storing stove or fireplace can also be part of the heating system, as well as a pellet boiler, since burning wood is considered renewable energy use. However, the heating appliance must be equipped with a combustion air duct, otherwise it may start drawing heated air out of the rooms.
Other important changes in the field of energy efficiency
The June changes include more than just extending nearly zero-energy building requirements to small residential buildings. According to the European Union's unified standard, the previous energy label scale A–H has been replaced with a new one A–G. Also, energy calculations have switched to more recent climate data – previously, average figures from the period 1970-2000 were used, but now data from 1990-2020 is used as the basis, ensuring more accurate calculations.
The reference value for small residential building cooling also changed, dropping from the previous 27 degrees to 26 degrees. A web-based calculator was introduced to assess solar electricity generation efficiency, replacing the previous table values.
