Part I — Situation overview

On 21 October, István Kapitány, Minister for Economy and Energy, released details of two residential energy programmes. The first is the Home Energy Storage Programme. It was announced by the previous government, which in early April awarded non-repayable grants to 42,000 applicants, but no payment was made. The Tisza government modified the scheme so that a third more, 57,000 households with solar panels in total, receive money for batteries. According to the minister, this will build at least 285 megawatts (MW) of new storage capacity, if every winner chooses the smallest eligible device. The larger part of the spending will be covered by the 2027 budget, and the installation deadline has been moved to February 2027 (HVG, 24.hu). The second is the home renovation programme starting in 2027. Under it, some 120,000 homes, 30,000 a year — half of them detached houses, half flats in condominiums — can be renovated by 2030. A detached house is eligible for up to HUF 15 million, and a condominium flat for up to HUF 5 million, in grants and subsidised loans, with an own contribution of HUF 500,000 and HUF 200,000 respectively. The envelope is HUF 600 billion (ATV, Portfolio).

On the same day a turbine generator dropped out at Unit 1 of the Paks nuclear power plant. Unit 4 has been under major overhaul since 18 September and Unit 2 under planned maintenance, so the plant was producing at barely more than half of its nominal 2,000 MW capacity, at 1,012 MW (Portfolio, HVG). The Hungarian day-ahead electricity price for Tuesday delivery jumped to EUR 326.5 per megawatt-hour, the highest since December 2024. The next day the head of the International Energy Agency (IEA), Fatih Birol, arrived in Budapest. In his interview with Telex he urged the Hungarian government to expand battery storage. Finance Minister András Kármán said on ATV that utility price protection would be maintained for the time being, because the housing stock is outdated in energy terms, and the lasting solution is insulation, modernising heating and replacing windows and doors.

On 21 April (Halting the HUF 5+5 million home-renovation programme), MIAK called for settling the unpaid applications and for targeting based on energy performance certificates, and on 4 August (At noon the sun held the system, in the evening it was luck) for an evening peak balance and a national storage target. Decisions have now been taken in both directions: the government is paying out the old storage applications and relaunching renovation. In MIAK’s reading, the two programmes point in the right direction, but the announcements focus on spending, not on results. It is not known how the promised savings will be verified, who gets access first, and whether the subsidised batteries will help with the evening electricity shortage or only serve their own household.

Part II — Grounding in the literature

Three sources provide a frame for assessing the two programmes. According to the 2006 report of Nicholas Stern (British economist, former chief economist of the World Bank), commissioned by the British Treasury — the Stern Review — even energy efficiency investments that pay for themselves are often not made. The reasons: hidden and transaction costs, lack of information, lack of capital and misaligned incentives. Stern considers subsidies justified if they are targeted, because otherwise they also go to those who would have invested without them. He describes lack of capital as a typical barrier for poorer households. According to the 2021 survey of the European Union by the Organisation for Economic Co-operation and Development (OECD), buildings account for 40 per cent of energy use. Renovation also brings health benefits for households unable to heat their homes, and the renovation rate must be at least doubled. The report also describes the new Social Climate Fund, which supports energy efficiency investments by vulnerable households. The World Bank’s World Development Report 2015 shows, with measured effects, that regular consumption feedback sent to households lastingly reduces energy use. The report also calls for continuous measurement and feedback to be built into programme design. The detailed treatment of the literature — by author, with quotations — can be found in section 6.4 Literature in detail.

Part III — MIAK’s concrete proposal

MIAK proposes three measurable measures. The first makes the outcome of the renovation programme verifiable, the second makes access and financing clear, and the third secures the system-level benefit of the subsidised storage units.

3.1 Measured savings in renovation: certificate before and after, two-year consumption tracking (with the call for applications, by 31 December 2026 at the latest)

According to Portfolio, based on the Prime Minister’s announcement, the condition of the subsidy will be an energy saving of at least 30 per cent. The announcements do not reveal how this will be measured. MIAK proposes three elements for the call for applications. The first: an independent energy performance certificate should be prepared for every subsidised property before and after the renovation. The second element ties the payment of the grant to the post-renovation certificate. Disbursement of the subsidised loan cannot be made conditional on this, because then the works would not even start. The third: with the consent of the subsidised households, the programme should track actual heating and electricity consumption for two years from billing data. The household should receive simple, comparative feedback on its own consumption once a year. The household energy reports presented by the World Bank (see 6.4.3) achieved lasting reductions with precisely this kind of feedback. The certificate shows the planned saving, the consumption data the actual one. The difference between the two signals if a group of contractors systematically does weaker work, or if households heat their homes to higher temperatures after better insulation. The ministry implementing the programme should publish a report every year, first at the end of 2027, on the renovations completed in 2027: how many homes were renovated, what the certified and the measured savings were, and how much one saved kilowatt-hour cost. MIAK’s blog post of 31 August (Housing on three fronts) called for a retrospective, sample-based audit of closed programmes before the new call. This proposal adds that in the new programme measurement should be built in from the start, rather than having to be reconstructed afterwards. This is the measurement condition of the EP3 energy efficiency renovation programme and of the K6 building energy efficiency programme point.

3.2 A needs-based band and a public funding table (with the call for applications and the 2027 budget bill)

The announced conditions are the same for every applicant: an own contribution of HUF 500,000 for a detached house, and a subsidised loan on top of the grant. According to the 19 October announcement quoted by Portfolio, the non-repayable part is 30–50 per cent, up to HUF 7.5 million, and the rest is a fixed 3 per cent loan. According to the paper, the implementing institution and the term of the loan are not yet known. For a low-income family living in a run-down house in the countryside, repaying a loan of several million forints is an obstacle even if the utility costs saved partly cover it. Stern (see 6.4.1) names precisely lack of capital as the main barrier for poorer households. MIAK proposes two elements. The first is a needs-based band. Households in the bottom two income deciles, and those receiving municipal housing support, should receive a larger part of the detached-house envelope as a non-repayable grant, with a smaller loan. At least a quarter of the annual envelope should go to buildings with the worst energy rating. MIAK’s blog post of 21 April already proposed certificate-based targeting; this now needs to be adapted to the concrete programme parameters. The second element is the public funding table. Portfolio recalled that in parliament the Prime Minister had still spoken of HUF 40 billion for 2027, while the minister spoke of a HUF 600 billion envelope. The source — according to the paper probably mainly EU funds — is not known either. The Government should publish, together with the 2027 budget bill, what share of the HUF 600 billion falls in each year, from what source, and in what proportion as grant and as loan. If the source is partly the EU Social Climate Fund, its target group is by definition vulnerable households. The proposal is an application of the SZ1 targeted support and the EP3 data-driven targeting programme points.

3.3 Subsidised storage units should also work for the grid: a controllability condition and a public waiting list (in the amended application conditions by 30 November 2026, first installation report by 30 June 2027)

According to the Climate Policy Institute quoted by 24.hu, solar generation peaks in the early afternoon, while households consume the most in the early evening. A household battery can balance out this gap. The question is to whose benefit. If the storage unit only increases the household’s own self-consumption, then at noon both the solar panel and the battery serve the house itself. And in the evening the storage unit discharges when the household needs it, not when the system is tightest. MIAK proposes that for applications already awarded, a condition of the installation contract should be a standard control unit through which the storage unit can also be controlled externally, as well as a smart meter. The household should be able to decide voluntarily whether, for a fee, it takes part through a service provider in balancing the grid in the evening. Stern (see 6.4.1) names precisely selling at real-time market prices and the smart meter as the condition for the cost-effectiveness of small-scale generation. The second element of the proposal is the waiting list. Of the roughly 132,000 original applicants, 57,000 receive support, and the others do not know what will happen to their applications. The ministry should publish how many applications remain pending, and in what order and under what conditions they could be considered in a next round. Households committing to grid participation should get priority in this. By 30 June 2027 a public report should also be prepared on the storage units actually installed: number of units, power and storage capacity. The 285 MW is, after all, only a lower estimate calculated for the smallest eligible device. The proposal builds on the storage element of the K2 energy transition plan and on the K7 energy market shock resilience programme point. The 4 August blog post called for a national storage target; this proposal is about the system-level benefit of state money already awarded.

The three proposals are linked by a common principle: the measure of state energy support is not the amount paid out, but the energy saved and the reduction in the evening load on the system. According to the literature, the reasons why efficiency investments are not made — lack of capital, lack of information, misaligned incentives — do not disappear through money alone. They require measurement, targeting and well-drafted conditions.

Part IV — Expected effects and risks

Dimension Expected effect Risk
Households Measured savings and annual feedback bring a more lasting reduction in utility costs; the needs-based band brings the programme to those living in heating poverty too More documents and two-year data tracking mean an administrative burden that may deter applicants
Budget The funding table makes the annual burden predictable; on the basis of measured results, the envelope of the following years can be better targeted The needs-based band means a higher subsidy rate, so fewer homes can be renovated from the same envelope
Electricity system Some of the controllable storage units can also help the grid at the evening peak, reducing the need for expensive imports and gas-fired power plants The control unit and the smart meter are extra costs; if the fee for grid participation is not attractive, few will take part
Construction industry The pace of 30,000 a year, known in advance, and quality control provide a predictable market If contractor capacity is tight, prices rise, and part of the subsidy stays with contractors as price inflation

The most important trade-off lies in proposal 3.2. The needs-based band is more expensive per home, so fewer renovations are carried out from a given envelope. This compromise is acceptable because, according to Stern’s argument, some well-off households would renovate even without a subsidy. For them, the larger part of the subsidy is a free-rider cost. For a household in need, however, it is precisely the subsidy that makes the investment possible. The limit is where a high subsidy rate makes even poor-quality work attractive for the contractor. This is filtered out by the payment condition and the measured results of proposal 3.1. The risk of proposal 3.3 lies in the technical and legal details. An externally controllable storage unit is only worth something if there is a legal and market framework for the transmission system operator and electricity traders to use small storage units in aggregate. Without it, the control unit is installed but remains unused. That is why MIAK proposes that participation be voluntary, but that the control unit be installed now. Retrofitting it later is much more expensive. The situation at Paks shows the urgency of the three proposals. If the nuclear plant is down two units at once, and the region’s gas-fired plants are also under maintenance, every evening kilowatt-hour saved counts.

Part V — Measurability and summary

5.1 What is worth following? (suggested KPIs)

MIAK proposes tracking the following key performance indicators (KPIs):

  • Measured savings: whether the first public report on the certified and measured energy savings of renovated homes appears by the end of 2027; whether the measured average saving reaches the promised 30 per cent.
  • Reaching those in need: whether at least a quarter of the homes subsidised in 2027 belong to households in the bottom two income deciles or are buildings with the worst energy rating.
  • Transparency of funding: whether the annual breakdown of the HUF 600 billion envelope by source and by grant–loan ratio is published with the 2027 budget bill.
  • Installed storage units: by 30 June 2027, how many batteries and how much capacity from the programme are actually operating, and what share of them takes part in balancing the grid in the evening.

5.2 Summary

MIAK asks that the 30 per cent saving be verifiable in the call for applications: with a certificate before and after the renovation, and with two years of actual consumption data. Poorer households should receive a higher subsidy rate, and the Government should publish the source and schedule of the renovation envelope together with the budget. In the storage programme, controllability should be a condition for applications already awarded too, and a public waiting list should be drawn up for pending applications. The proposals touch on two MIAK foundational values. Data-drivenness, because the success of a programme worth several hundred billion forints can only be judged by measured energy savings, not by the amount handed out. Universal representation, because a precondition for phasing out utility price protection is that renovation also reaches those most burdened by the cost of heating.

Part VI — Reasoning and further sources

6.1 Press framing by spectrum

Left-liberal band. In the case of the storage programme, HVG highlighted the background: the previous government awarded the subsidy to 42,000 households but did not pay. The paper also pointed out that even the expanded envelope falls far short of the number of original applicants. In another article it detailed the state of the Paks units. In its interview with Fatih Birol, Telex put the global energy security situation and the need for storage at the centre. The paper also published his answers to questions about Rosatom.

Public-affairs band. 24.hu supplemented the minister’s announcement with an earlier analysis by the Climate Policy Institute explaining the timing gap between solar generation and household consumption. ATV presented the parameters under the frame of a “huge home renovation programme”, following the minister’s statement. In his interview with the channel, András Kármán also justified maintaining utility price protection by the outdated state of the building stock. In the material processed, Index did not cover the residential programmes; on the topic day it wrote about oil market developments.

Economic band. Portfolio was the most critical. On the renovation programme it wrote that it is not yet known from what source and through which institutions it can be claimed, and how the HUF 600 billion adds up if the Prime Minister was still talking about HUF 40 billion for 2027. At the same time, the paper called the direction correct. On Paks it reported the jump in the day-ahead electricity price and the regional capacity shortage, and on the possibility of excluding Rosatom it carried a Reuters report.

Government-critical conservative band. In the material processed, Magyar Nemzet did not deal with the residential programmes. On Paks II it argued in an expert interview with the example of the Finnish Hanhikivi project. According to the paper, terminating the contract with Rosatom brought damages lawsuits and a loss of cheap electricity in Finland. Material from Mandiner and Népszava was not in the processed set.

6.2 Facts and data

Data Value Source
Home Energy Storage Programme, previous government 42,000 grants awarded (early April 2026), no payment made HVG, 24.hu, 21 October 2026
Amended programme 57,000 households; at least 285 MW of new storage capacity (calculated with the smallest eligible device) Statement by István Kapitány, quoted by HVG and 24.hu
Installation deadline February 2027 HVG, 24.hu, 21 October 2026
Number of original applicants nearly 132,000 HVG, 21 October 2026
National battery storage capacity end of 2025: 146 MW; September 2026: more than 1,000 MW; by 2030, 3–4 times the current level would be needed Statement by István Kapitány, quoted by HVG
Home renovation programme from 2027; some 120,000 homes by 2030, 30,000 a year (half detached houses, half condominium flats) ATV, Portfolio, 21 October 2026
Detached house investment of up to HUF 15.5 million, of which up to HUF 15 million grant and subsidised loan; HUF 500,000 own contribution ATV, 21 October 2026
Condominium flat up to HUF 5.2 million, of which up to HUF 5 million subsidy; HUF 200,000 own contribution ATV, 21 October 2026
Envelope and expected orders HUF 600 billion; at least HUF 1,100 billion in construction orders Statement by István Kapitány, quoted by ATV and Portfolio
Promised energy saving at least 30% Portfolio, based on the Prime Minister’s announcement
Ratio of grant to loan 30–50% (up to HUF 7.5 million) non-repayable, the rest a fixed 3% loan (according to the 19 October announcement) Portfolio, 21 and 23 October 2026
Paks Nuclear Power Plant, 21 October 1,012 MW of the nominal 2,000 MW capacity (Unit 4 under major overhaul, Unit 2 under maintenance, turbine generator outage at Unit 1) Portfolio, HVG, 21 October 2026
Hungarian day-ahead electricity price EUR 326.5/MWh for Tuesday delivery (highest since December 2024); EUR 263.21/MWh for Thursday Portfolio, 21 October 2026
Operating licences of the existing Paks units expire between 2032 and 2037; a 20-year extension is under examination Portfolio (based on Reuters), 21 October 2026
Share of buildings in energy use (EU) 40% OECD, 2021

6.3 Policy dimensions

  • Environment and climate (programme points) — the measurement condition of the building energy efficiency programme (K6), storage as the second element of the energy transition (K2), shock resilience against evening scarcity (K7);
  • Construction (programme points) — the renovation programme with data-driven targeting (EP3), tracking construction quality and prices (EP4);
  • Economy (programme points) — the residential element of the energy price shock preparedness plan (G25); the budgetary funding table of the renovation envelope;
  • Foreign policy (programme points) — the Paks II review and the exit scenario for the Rosatom contract appearing in the same topic of the monitor (KP22); this was discussed in MIAK’s analyses of 6 June and 17 August, and here it only provides the background to the capacity shortage.

6.4 Literature in detail

6.4.1 Nicholas Stern: The Economics of Climate Change

Chapter 17 of the Stern Review examines why energy efficiency investments that pay for themselves are not made even when carbon dioxide emissions already have a price. The report lists four barriers: hidden and transaction costs (for example, the time needed to plan the investment), lack of information about the opportunities, lack of capital and misaligned incentives. Alongside these it also takes into account behavioural and organisational factors in decision-making. In the section on financing, Stern is cautious about subsidies:

“In general, it is preferable to tax negative externalities rather than subsidise desirable outcomes.” (own translation)

A footnote of the report adds that the cost of a subsidy rises if it is also claimed by those who would have invested without it. At the same time, Stern acknowledges that a targeted financial incentive is justified where there is a capital market failure, and applies this specifically to poorer households. In the section on small-scale generation he writes that the key to the cost-effectiveness of household producers is selling surplus electricity at real-time market prices, and an important condition for this is the smart meter. Applied to the Hungarian programmes, two lessons follow. The renovation subsidy is effective if it also reaches those in need, households struggling with lack of capital (3.2). And the storage subsidy serves the system if the storage unit can also respond to signals from the grid (3.3).

📖 Source: Nicholas Stern: The Economics of Climate Change — The Stern Review (2006), Chapters 9 and 17

6.4.2 OECD: Economic Surveys: European Union 2021

The OECD’s 2021 survey of the European Union discusses buildings separately among the conditions for climate neutrality. It finds that they account for 40 per cent of energy consumption, and that the renovation rate in the member states is between 0.4 and 1.2 per cent a year, which should be at least doubled. The report also highlights the social benefit of renovation:

“Energy efficiency of homes also brings significant health and well-being benefits by improving indoor living quality, especially for households that are currently unable to heat their homes adequately.” (own translation)

According to the OECD, in the long run energy efficiency investments often yield more than they cost: the value of the owner’s property rises and the occupant’s energy consumption falls. The report also describes the Social Climate Fund. It is financed from the revenues of the new EU emissions trading system covering transport and buildings, and it supports temporary income support and energy efficiency investments for vulnerable households. Applied to the Hungarian programme: the greatest social benefit of renovation arises where heating is the heaviest burden today, and EU funds may also be available for this, specifically for this target group (3.2).

📖 Source: OECD: Economic Surveys: European Union 2021, Chapter 2

6.4.3 World Bank: World Development Report 2015

The World Bank’s 2015 report, which deals with the psychological and social factors of decision-making, also gives examples of reducing energy consumption. In a large American programme, households regularly received reports on their own energy consumption, compared with that of their neighbours. According to the report, this reduced consumption by 2 per cent on average, equivalent to the effect of a short-term electricity price increase of 11–20 per cent. Although the initial effect faded quickly, with repeated reports new habits and more efficient appliances appeared, and the effect proved lasting. Another part of the report formulates as a general principle:

“The institutional mechanisms of development research and policy must make room for sound diagnosis and effective feedback, so that programmes can be adapted to the evidence gathered during implementation.” (own translation)

Applied to the Hungarian renovation programme: two-year consumption tracking is not only verification but also feedback to the household. And the programme can be adjusted on the basis of the measured results of the first years, for example in contractor accreditation or in the scope of eligible works (3.1).

📖 Source: World Bank: World Development Report 2015 — Mind, Society, and Behavior (2015), Chapters 1 and 8

6.5 International comparison

Germany: loan-based renovation with quality control. Since 2006, the building energy programme of the German state development bank (KfW) has financed the renovation of several million homes with subsidised loans and repayment grants. The level of support is tied to the energy standard achieved, and completion is certified by an independent energy expert. This is the established model for the before-and-after certificate of proposal 3.1.

France: income-dependent subsidy rate. The French MaPrimeRénov’ programme differentiates by income band: the lowest-income households receive a much larger share of renovation costs as a subsidy than well-off ones. This is a working example of the needs-based band of proposal 3.2.

Ireland: full state funding for those in energy poverty. The Irish “Warmer Homes” scheme finances the insulation and heating upgrades of low-income households entirely from public funds. The lesson for the Hungarian programme: for the poorest, a loan is not a solution; direct support is needed there.

Environment and climate

  • K2 — Energy transition plan
  • K6 — Building energy efficiency programme
  • K7 — Energy market shock resilience

Construction

  • EP3 — Energy efficiency renovation programme
  • EP4 — Transparency in the construction industry

Economy

  • G25 — Energy price shock preparedness plan

Social policy

  • SZ1 — Targeted support

Foreign policy

  • KP22 — Exit strategy planning protocol

Proposed new programme point: Controllability condition for state-subsidised household storage units — standard external control, smart meter and voluntary, remunerated participation in balancing the grid in the evening — for the Environment and climate area.

6.7 List of sources

Press sources (MIAK press monitor, 22 October 2026 — topic 4):

Knowledge base references (literature):

  • 📖 Nicholas Stern: The Economics of Climate Change — The Stern Review (2006)
  • 📖 OECD: Economic Surveys: European Union 2021
  • 📖 World Bank: World Development Report 2015 — Mind, Society, and Behavior (2015)

MIAK internal materials:

  • MIAK policy area: Environment and climate (programme points; programme point ID: K2, K6, K7)
  • MIAK policy area: Construction (programme points; programme point ID: EP3, EP4)
  • MIAK policy area: Economy (programme points; programme point ID: G25)
  • MIAK policy area: Social policy (programme points; programme point ID: SZ1)
  • MIAK policy area: Foreign policy (programme points; programme point ID: KP22)
  • MIAK press monitor, 22 October 2026 — topic 4, score: 87/100

Generation metadata