In real estate markets, there is a growing relevance and appreciation for Green Buildings, especially in EU countries where the greater part of residential buildings is built before the first regulations on energy performance.

The European directive 31/2010/UE was imposed on member states to lower the energy consumption of buildings and provided the first definition of nZEB building (“nearly Zero Energy Building”); in Italy, this directive was received with Legislative Decree 63/2013, then converted into Law 90 on 3 August 2013, according to which, from 1 January 2019, new buildings occupied by public administrations and owned by the latter must be nZEB, including school buildings; from 1 January 2021, the above provision is extended to all new buildings and buildings undergoing major renovations, therefore, both public and private buildings. Based on the most recent surveys, Italy registers a 15.86% nZEB share for new construction [1].

Green Buildings have amply demonstrated to have not only lower energy bills but can improve indoor life and productivity, with their sustainable characteristics and design. All this determines, consequently, an increase in market value for buildings [2].

Over time, the building energy performance has become an effective assets valuation tool, as demonstrated by regulatory innovations in many cities or countries.

In Europe, the Energy Performance Certification (EPC) for buildings was provided for by the European directives 2002/91/CE and 2006/32/CE. However, this application has different implications in each of the European Member States, as reported by Buildings Performance Institute Europe (BPIE) ^[3][4][3,4]. The energy label is mandatory in order to purchase/sell a property in some countries (e.g., Spain or Italy), while, in other countries, there is not this legislative obligation (e.g., among these: Czech Republic or Netherland, for example) [5]. EPC may be based on a seven A–G ranks related to the energy classification system, with or without more subclasses (i.e., A and A+ as in Austria, Portugal and Ireland, for example [6]), using non-renewable primary energy or not (kWh/m² year) or CO₂ emissions as indicators to build reference levels for energy ranking. Some countries—Denmark and Hungary—do not use any indicator to describe building energy performance.

Based on the latest references provided by ENEA [7], in Italy, the buildings with high energy performance went from about 7% to 10% of the total in the period 2016–2019, thanks to the contribution of major renovations and new constructions; over 60% of the Italian housing stock is included in the least efficient energy classes (F–G) because it was mainly built between 1945 and 1972; new buildings represent only 3.4% of the Energy Performance Certificates (APE), and of these, more than 90% are of high energy performance (A–B). The non-residential sector, which accounts for 15% of the total APE, accounts for more than 50% of the certificates in the intermediate energy classes (C–D–E) and for more than 10% in the most efficient ones (A–B).

2. Detecting Real Estate Market Premium for Green Buildings

As already mentioned, Green Buildings generate a whole-family benefits in terms of possible government incentives or tax deductions, better quality life and productivity, lower management costs, as many international researches suggest ^{[8][9][10][11][12]}[11,12,13,14,15]. Partial equilibrium models have been adopted in these studies about real estate markets to analyze the short-term effects on the properties’ rental rate considering architectural and technical features characteristics, among which the energy and ecological values added. The increase in the demand curve for Green Buildings is demonstrated to the fact that if higher initial building costs for better ecological and family benefits are supported, this causes a consequent decline in demand for “brown” buildings (alternatives to formers). These works assume that a “rent market premium” in the long-term exist related to innovations in order to favor the effectiveness of green measures and to reduce the ecological costs of building projects and preferences and behaviors tending to maintain adequate standards for the technological characteristics involved. A further “market premium on the sale price” is derived for Green Buildings by the combination of two factors: higher rent obtainable due to the better appeal of these buildings and the higher effect of intrinsic characteristics on real estate values (mainly due to lower risk for “negative premium” from the real estate market if this latter discloses a growing tend toward green buildings at the expense of existing non-green buildings; lower risk of future and possible carbon taxes; adaptation, in advance, to future and possible new environmental laws and regulations; lower management costs as those related to energy). The EPC rating is one the most common information currently reported in every real estate advertisement, providing a description of building’s energy performance mandatory by law. Because of this, many studies started to investigate whether and/or how much this information influences the choices in real estate markets. Hedonic Price Models are the most suitable tools to analyze the EPC’s impact on real estate values, in this direction a review of the literature was performed for European countries ^[13][16]. The main study cases refer to residential and commercial markets. Looking far back in time, interest for energy efficiency and environmental awareness developed with the increase over time in hydrocarbons’ prices: Johnson and Kaserman ^[14][17], Laquatra ^[15][18], Longstreth ^[16][19], Dinan and Miranowski ^[17][20] and Longstreth et al. ^[18][21] all tried to implement hedonic price models including among the real estate attributes as an energy variable. After these pioneering works, only in 2011 did studies start investigating the effect of “green” labels on commercial buildings such as ENERGY STAR and LEED ^[12][15]. For example, for downtown Chicago, Dermisi and McDonald ^[19][22] highlighted that only the LEED-certified properties sold for a 23% price premium, while an Energy Star certification had no influence on real estate sale prices. About more recent studies, in 2011, Brounen and Kok ^[20][23] highlighted for the Dutch residential market the appreciation of EPC in terms of faster time sales and increasing price. In 2012, Kok and Jennen ^[21][24] investigate on the EPC’s effect on sale prices for Dutch cities, they highlighted that green office building rents were 6.5% higher with respect to those with lower EPCs by analyzing about 1100 rental transactions. Cajias and Piazolo ^[22][25] applied in 2013 a hedonic model to verify in Germany the relationship among sales and rentals in consequence of EPC: buildings with best energy classes (B, C and D) were rented more than the worst G-ranked buildings; similar results were confirmed for real estate sales (+32.8% in real estate values for buildings with low energy consumption). Also in 2013, for single-family homes in Sweden, Högberg ^[23][26] verified through 1073 real estate data a growing real estate prices when the energy class increases. A report published in 2013 by the Directorate-General for Energy of European Community collected various studies referred to several European cities or countries (Austria, Belgium, France, England, Ireland) to elevate the EPC’s effect on properties values ^[24][27]. This report highlighted that the EPC’s impact on properties prices is often influenced from the time this certification was already mandatory in the countries analyzed: a significant effect on real estate values did exist where the EPC was a consolidated practice, while the influence of EPC was ineffective in those countries where the rule application was recent. Concluding, for all countries considered, the real estate values increase in correspondence to higher energy rankings. In Ireland, Hyland et al. ^[25][28] detected in 2013 that A-ranked energy efficiency properties registered a rental price premium of about 2% and a sale price premium of 9%, if compared to D-ranked energy class. In addition, they highlighted that the scarcity of monetary resources to perform renovation interventions, determines for buildings that not require further investment on energy retrofitting a preference in the real estate market. In Portugal, Ramos et al. ^[26][29] showed in 2014 that real estate units with better EPCranking (A, B, C), if compared with D-rank ones, were characterized by a 5.9% higher unitary price. A reduction of 4% in real estate prices was recorded for properties with low energy rankings (E, F, G). Subsequently, Evangelista et al. ^[27][30] confirmed in 2019 the results of Ramos et al. ^[26][29] for Portugal, with higher values of EPC appreciation (properties with A and B energy classes recorded a green premium of 12.5% for existing buildings and 13.1% for new buildings). Studies in 2015 and 2016 developed by Fuerst et al. in U.K. ^[28][29][31,32] found a relationship between energy performance rankings and sale prices. Compared to D-rank properties, buildings with A- and B-rank recorded a 5% market premium, C-rank buildings recorded a 1.8% market premium, while buildings with lower energy classes (F, E, G) recorded a 1–7% reduction in sale prices ^[29][32]. For cultural aspects and, perhaps, for certainly milder climatic conditions, in Southern European countries, the EPC’s impact on real estate prices is a topic on which little has been investigated. Investigating on the premium price of dwellings with high energy rankings (A, B, C and D classes) in 2016, De Ayala et al. ^[30][33] detected in Spain a premium price for these real estate goods ranging between 5.4% and 9.8% compared to the less efficient ones. Also in Spain (Barcelona) in 2016, Marmolejo ^[31][34] highlighted a low effect on real estate prices, due to the fact that energy retrofitting upgrading costs are not sufficiently recuperable by sellers. Italian experiences are mainly attributable to Fregonara et al. ^[32][35] in 2017 and Bottero et al. ^[33][36] in 2018, evaluating the EPC’s impact in the residential real estate market of Turin (Italy) through hedonic models. Their results suggested that, also in Italy, a significant appreciation for green buildings exists. Marmolejo and Chen ^[34][35][37,38] recurred to a spatial hedonic model detecting a significant increase in real estate prices related to the EPC ranking and how, in 2019, this economic impact varies in different housing segments in Barcelona: for more recent buildings the energy class does not have a significant impact on their prices, but they are instead relevant for all other properties. Again, Taltavull et al. ^[36][39] assessed in 2019 the green premium for buildings in the province of Alicante (Spain) in correspondence to various climate zones. In line with this latter study, and with reference to the metropolitan areas of Barcelona, Valencia and Alicante, Marmolejo and Chen ^[37][40] found in 2019 that the impact of energy performance was higher a scarcity of efficient homes in local real estate markets was evident. In any case, it should be noted that some studies have shown no positive relationship between real estate prices and energy class. This because EPC is often used as “proxy” variable to include in it the impacts of more and omitted real estate characteristics. Among these studies, in 2017, Olaussen et al. ^[38][41] highlighted in Norway the possibility that energy efficiency may incorporate the effect of construction quality variable. In addition, Cerin et al. ^[39][42], analyzing 67,559 real estate transactions in Sweden in the time period 2009–2010, recorded a negative relationship among energy label and real estate prices, likely for the lack of an EPC classification reference value. However, the latter study is conflicting with the study of Högberg ^[23][26] that, for the same time period, verified in Stockholm a positive impact of better energy class in the property market.