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ENERGY

Shared central heating in Spain’s buildings to end soon: what you need to know

If you have district heating in your building in Spain, you may soon have to install an individual meter in your flat or apartment, the Spanish government has announced.

radiator, central heating
A radiator seen up close. Photo: ri / Pixabay

In some parts of Spain it’s still common to find communal central heating systems for the whole building, known also as district heating systems, but the Spanish government has set out rules for these to be replaced by individual meters.

The plan is to make people more aware of the energy consumption they are using and to make sure that everyone is paying for their own heating usage. Currently, heating bills in these buildings are just split equally between the number of apartments, taking into account the number of people who live in each. 

Building managers and community of neighbours will have until mid-2022 or early 2023 to install the systems necessary for individualised meters, depending on the climatic zone the buildings are located in and the number of homes they contain. 

As of May 2023, each neighbour in buildings with district heating in Spain must pay exclusively for their own heating consumption.

District heating systems usually run on natural gas energy, heating the entire building via the same network.

The new measure will affect at least 1.7 million homes in Spain and will mainly affect those buildings built before 1998.

It will also avoid energy waste of two million tons of CO2 per year. The majority of district buildings in Spain are in Madrid: 700,000, but they’re also common in Cantabria and Navarre.

Why has Spain chosen to scrap district heating?

A study carried out between 2015 and 2018 revealed that the installation of meters that control individual heating usage in homes with district central heating generates an average saving on your heating bill of 29.60 percent two years after its installation.

This research was carried out in 396 homes with central heating in the Community of Madrid and was supervised and certified by the property managers of said communities of owners.

Installing individual central heating has the potential to save €230 in heating costs a year per housing unit, according to the Spanish Association of Heat Cost Distributors.

How much do the meters cost?
 
Individual meters can cost around €250, plus the cost of installing them, but prices can vary a lot depending on the building you live in. 
 
If it’s not possible to install a meter for the entire apartment however, you will have to install individual meters on each radiator at a cost of around €30 per unit. 
 
It is also possible to rent meters and a monthly cost of around €7 – €10, including maintenance. 

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The dates you need to know

The decree published by the Spanish government on August 6th 2020, set out the deadlines by which a quote must have been obtained. You can find out what climate zone you’re located in by looking at the government’s Basic Document on Energy Saving

  • February 1st, 2021 for buildings of non-residential use and those in climate zone E with 20 or more dwellings.
  • July 1st, 2021 for those in climate zone E with fewer than 20 homes and in climate zone D for buildings with 20 or more homes.
  • December 1st, 2021 for those in climate zone D with less than 20 homes and in climate zone C for buildings with 20 or more homes.
  • February 1st, 2022 for those in climate zone C with fewer than 20 homes.
Spain's climate zones according to the Technical Building Code. Source: CTE
Spain’s provinces categorised into climate zones according to the Technical Building Code. Source: CTE

If the quote you receive proves to be technically viable and makes economic sense, the Spanish government states that “the holder must proceed with the installation of individualised accounting systems within a maximum period of fifteen months from these dates”.  

Each community of neighbours will be responsible for the installation and payment of the meters, in other words property owners will have to share the costs. If they fail by a certain date there will be sanctions of between €300 and 60,000.

This means that the individual meters themselves will have to be installed by the following dates:

  • May 1st, 2022 for buildings of non-residential use and in climate zone E for buildings with 20 or more homes.
  • October 1st, 2022 for those in climate zone E with less than 20 homes, and in climate zone D for buildings with 20 or more homes.
  • March 1st, 2023 for those in climate zone D with less than 20 homes and in climate zone C for buildings with 20 or more homes.
  • May 1st, 2023 for those in climate zone C with less than 20 homes.

Exceptions to the new measures

There are however some exceptions; not all buildings or homes will have to comply with this regulation if they’re not able to.  

“The simplest way to comply with the regulations is to put a meter on each apartment, but this is only technically possible in heating systems arranged in a ring”, said Enrique García, spokesman for the Organization of Consumers and Users (OCU).

Those for example which cannot install individual meters due to technical reasons or those which have heating systems equipped with heat emitters connected in series (provided that they serve more than one user in the same ring) will be exempt. 

Any system that does not allow for individualising consumption, such as user-to-user system management, is also exempt.

Those buildings which would lack of economic profitability because they’re located in climatic zones A and B will also be exempt. This includes some buildings in parts of Almería, Cádiz, Castellón, Ceuta, Córdoba, Granada, Huelva, Jaén, Málaga, Murcia, Las Palmas, Santa Cruz de Tenerife, Seville, Tarragona and Valencia.

READ ALSO: Spain’s new electricity rates for 2021: the tricks to help you save up to €300 a year

In the last five years, in anticipation of the new regulations, meters have already been installed in 180,000 flats in Spain, according to the Spanish Association of Heat Cost Distributors. 

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PROPERTY

What the Euribor rise means for property buyers and owners in Spain

The rise in the Euribor interest rate, used to calculate mortgage payments in Spain, is causing big changes in the mortgage rates.

What the Euribor rise means for property buyers and owners in Spain

Looking to buy property in Spain? Already a homeowner here? Well, you may have heard something about rising interest rates recently.

Or perhaps changes to the terms of your mortgage. Or the Euribor – but what is it, and what’s going on?

What is Euribor?

In Spain, Euribor is the interest rate most often used to work out mortgage payments and to calculate both variable and fixed rates.

It is anchored to the interest rate set by the European Central Bank, and, as we are now seeing, quite responsive to global economic events.

It’s the interest rate that banks in the Euro Zone use to lend to each other, so when the base rate goes up, the Euribor does too, which sends mortgage interest rates across the Eurozone rising. 

Rising rates

Most Spanish mortgages with variable rates normally vary based on a variety of factors, but this number has been rising and in May 2022 saw figures of 0.240 percent (Tuesday May 17th), well above the average. 

The rises throughout May are leading many in Spain, and indeed across Europe, to wonder how high their mortgage rates can go, and when the rises will stop.

Banco de España has estimated that the increases could range from anything between €35 a month to an additional €400. Bankinter predicts the Euribor rate will finish the year at a staggering 0.40 percent, but, more encouragingly, Caixabank’s prediction puts it at just 0.13 percent by the end of 2022.

On Euribor.com.es, a website that tracks the index on a daily basis, they suggest that the market consensus predicts the Euribor will finish at around 0.3 percent at the end of the year, but could reach as high 0.8 percent in 2023.

All of them agree, and most other economic indicators suggest, that whatever the figure at the end of the year, it will remain positive, so it seems almost certain that mortgages will continue to rise throughout 2022 at the very least.

This instability, in addition to global inflation and supply chain problems, could mean that mortgage rates will be affected at least until 2023, with some predictors even signposting 2024 as the possible end of a rise in mortgage prices.

With things uncertain in the mortgage industry, and the world economy more broadly, perhaps you’re thinking of ways to try and insulate yourself from the climbing interest rates.

How to protect yourself from the rising rates

One way to weather the storm of interest rate increases is to change your mortgage from a variable to a fixed rate, either by negotiating with the your bank or by changing bank altogether – a process known as subrogation.

According to data from MyInvestor, during March and April the number of subrogations has started to rise.

Subrogation basically means switching the mortgage from one bank to another to change its interest rate. Although it does involve certain charges in order to do so – you pay the valuation of your house, which normally costs a few hundred euros, and a fee charged to the bank you are leaving, which can cost up to 2 percent of the outstanding amount – it could, and probably would, work out cheaper than paying the hiked interests rates over time.

You could also try and take out a new mortgage with another bank and use the borrowed money to settle the loan. This is, of course, a more expensive option as you have to pay the appraisal, the commission for early repayment of the current credit (again, up to 2 percent of the outstanding amount) and the expenses associated with its cancellation of registration, which normally runs to around €1,000.

READ ALSO: Spanish mortgages – Ten things foreigners should know before getting one

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