Energy renovation – what pays off, what does it cost and where to start?

Many people start considering an energy renovation when the electricity or heating bill stings, or when the house’s heating system is nearing the end of its life. But which renovation actually pays off, what does it cost, and in what order should you tackle the projects? In this article we answer in euros, not formulas: we compile the typical investments, annual savings, payback times and the subsidies available in 2026. The article is written for detached house owners and housing company boards.

What is an energy renovation?

An energy renovation is a repair that reduces a building’s energy consumption or switches its heating to a cheaper option. One example captures the idea: in Motiva’s 2024 calculation, the oil heating of a small 1990s detached house was replaced with ground source heat. The investment was about €23,000 including demolition work, and annual heating costs dropped from about €3,050 to about €910. The renovation pays for itself in about nine years – and since a ground source heat pump’s service life is about 20 years, the remaining time is pure savings. Not all energy renovations are this large: at the lightest end it is a matter of an air source heat pump, or of mere adjustments and draught-proofing.

How do you know where the energy goes?

A sensible renovation starts with a diagnosis, not with a request for quotes to a contractor. According to Motiva’s 2026 data, the energy use of a small house typically breaks down like this:

Where the energy goes in a small house	Share of consumption
Space heating	40–60 %
Domestic hot water heating	10–25 %
Preheating of supply air (mechanical ventilation)	5–15 %
Household and property electricity	20–30 %

A typical electrically heated detached house consumes about 18,000–20,000 kWh per year: in Motiva’s 2026 example, a 120 m² house of a family of four consumes 19,200 kWh, of which space heating accounts for 9,500 kWh and domestic hot water for 3,670 kWh. So the big savings are almost always found in heating.

The most accurate diagnosis of your own house is the energy certificate: its E-value and the input data of the calculation reveal the building’s weakest points, and the certificate serves as the renovation’s yardstick before and after. First check where you stand: does your building already have a valid certificate? See how to check on our energy certificate check page – or let us check for you.

Which renovations pay off in a detached house?

Profitability depends on the starting point and the price of energy. According to Statistics Finland, the total price of electricity for households in the first half of 2026 was about 17–21 cents/kWh, and about 14–19 cents/kWh in the size class of electrically heated houses; district heat cost a small house customer about 11.4 cents/kWh. The largest single saving almost always comes from changing the heating method. Motiva’s 2024 example calculation (a small 1990s detached house, price level 3/2024, electricity price 16 cents/kWh) compiles the alternatives to oil heating – the savings column is our own calculation based on Motiva’s running costs:

Measure	Investment	Heating costs €/year	Savings €/year	Payback time
Starting point: oil boiler	–	€3,050	–	–
Ground source heat	€23,000	€910	approx. €2,100	approx. 9 years
Air-to-water heat pump	€17,000	€1,240	approx. €1,800	approx. 8 years
District heating	€13,000 (connection example)	€1,840	approx. €1,200	approx. 11 years (our own calculation)

The investments for ground source heat and the air-to-water heat pump include removing the oil heating; the district heating figure is only a connection example. The payback times are Motiva’s calculations, except for district heating. In a larger 1970s house the payback was even faster in Motiva’s calculation: about 7 years with ground source heat and about 6 years with an air-to-water heat pump. We cover the option suited to a house with water-circulated heat distribution in more detail in the article air-to-water heat pump.

In an electrically heated house, the cheapest first step is often an air source heat pump: according to Motiva’s 2026 data it can cut heating costs by as much as 30–40 per cent, and one pump typically produces 30–60 per cent of the space heating energy. The purchase price including installation is in the range of a few thousand euros (our own estimate – there are no official price statistics). In the name of honesty: in severe frost the benefit shrinks, since at around −20 °C the pump delivers about half as much output as at the +7 °C rating temperature. An air source heat pump therefore complements the main heating; it does not replace it.

In what order should the renovations be done?

Rule of thumb: low-cost measures first, then heating, and heavy structural work last.

Free and low-cost measures. Heating adjustments, checking the indoor temperature, draught-proofing and usage habits cost little and take effect immediately – we compiled them in the article energy saving. As a light investment, an air source heat pump belongs in the same group.
Changing the heating method. The largest saving in euros, as the table above shows.
Structures: windows, doors and additional insulation. These usually pay off only once the building component is due for repair anyway – then the extra cost of improving energy efficiency remains small.

This order saves money also because the low-cost measures reduce the heating power the house needs, so the new heating system can be sized smaller.

Permits in plain language: under the Building Act, repair work always requires a building permit when a change to the external envelope or to the technical systems can significantly affect the building’s energy efficiency, and for example the energy well of a ground source heat system is always subject to a permit – so confirm the permit requirement with your municipal building control before starting work. The current act is available on Finlex. We cover the report that may be required at the permit stage in the article energy report for a building permit.

What subsidies are available for an energy renovation in 2026?

For a detached house owner, the most important support is the household expenses credit (kotitalousvähennys): 35 per cent of the labour share of the renovation, at most €1,600 per person per year, with a €150 deductible. For those giving up oil heating entirely, the credit is increased until the end of 2027: 60 per cent of the labour share and at most €3,500 per person, when the replacement is a non-fossil heating system. The credit is granted only for the itemised labour share of the invoice – equipment and materials do not qualify. The Government has proposed raising the credit retroactively for 2026, but at the time of writing this is still only a proposal. There is no separate state energy grant for detached houses in the autumn of 2026 – we compiled what is genuinely available to private individuals in the article energy grants for detached houses. Note also that if an energy grant has been awarded for the renovation, the household expenses credit cannot be claimed for the same project.

Housing companies, on the other hand, can apply for Varke’s energy grant 2026–2027, at most €4,000 per apartment – we compiled the conditions and E-value requirements in the article energy grant 2026–2027.

Before making decisions, it is also worth using the free advice services: regional energy advice funded by the Energy Authority is available in every region except Åland (energiavirasto.fi/energianeuvonta). Housing companies in Helsinki are served by the city’s free energy advice service for housing companies (hel.fi), backed by the city’s Energy Renaissance programme.

How does a renovation affect the energy class and the value of the house?

The energy class is determined by the E-value, and the E-value is calculated from the calculated purchased energy weighted by the energy carrier factor: for electricity the factor is 1.20, for fossil fuels 1.00 and for district heat 0.50. A heating renovation therefore works in two ways: a heat pump cuts the amount of purchased energy to a fraction, and switching to district heat halves the weight of the heating energy thanks to the factor alone. In many houses, changing the heating method can raise the energy class by one or two steps. You can see the logic of the calculation in the article E-value calculation examples, and we compiled the means to a good result in the article how to get a good E-value. It pays to verify the improvement with a new certificate: the energy class must be stated in the sales listing, so a better letter is a concrete asset when it is time to sell.

What about a housing company’s energy renovation?

The same technical lessons apply in a housing company, but the project proceeds differently: decisions are made at the general meeting, and energy measures are at their most profitable when tied to repairs under the long-term maintenance plan (PTS) – for example additional thermal insulation in connection with a facade renovation, when the design work and scaffolding are already part of the project. The Varke grant mentioned above makes 2026–2027 an opportune time for a housing company to act. We cover project design and E-value calculations in the article energy design; we will also publish a separate, more detailed article on housing company energy renovations.

How to get started

The first step of an energy renovation is establishing the starting point. Look up your house’s energy certificate and see where the energy goes according to the calculation: check the status of your certificate on our energy certificate check page – or let us check for you. If the certificate is missing or has expired, we will prepare a new one – see energy certificate for a detached house or our energy certificate service. And when you want a direction and figures for a renovation of your own house, order an energy report from us: submit a request for a quote and we will tell you the price and schedule, or first take a look at our services.

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