Cost of money, regulation, and responsibility: Three compelling incentives for investing in geothermal energy in real estate

QHeat’s geothermal wells generate clean, unlimited, and self-reliant energy tailored for large-scale properties, positioning real estate investments to comply with the sustainability demands of the future.

Cost of money

Responsibility has often been associated with soft values and the production of uninspired reports. That era is over: now and into the future, responsibility, particularly through the integration of renewable energy, is a critical component of serious business operations. In the realm of real estate investing, properties harnessing renewable energy not only embody this new era of responsibility but also secure a distinct competitive edge in the financial markets.

In financial markets, adherence to responsibility criteria is under increasingly stringent scrutiny. When the standards are met, loan terms become more favorable – even a half percent difference in interest rates makes real estate investing significantly more profitable in the long term. And, on the other hand, if the criteria are not met, financing may not even be available.

Environmentally responsible construction increases returns. According to a study by the Finnish engineering consultancy A-Insinöörit, the annual return of an environmentally responsible commercial property was 9.1%. This is 1.7 percentage points higher than the return on a basic level constructed commercial property, which was 7.4%. The figures are calculated using a 50% leverage assumption.

Investment in responsibility also plays a crucial role at the point of exit – prospective investors carefully assess the property, considering future liabilities. Future-proof properties that meet high standards of responsibility command a premium price. Consider the contrast between a property that, through minimal investment, just manages to meet responsibility standards and one that is self-sufficient, boasting zero emissions and cutting-edge appeal, powered by geothermal energy.

Regulation

We find ourselves at a pivotal point in emissions policy as the European Green Deal sets ambitious goals for the EU to become the world’s inaugural climate-neutral bloc. This sweeping initiative is reshaping perspectives on renewable energy, impacting national policies and the real estate market alike. While the approach includes a mix of regulatory measures alongside incentives, investors and states focusing on renewable energy infrastructure are poised to benefit in this evolving landscape.

Whereas the energy efficiency of properties was previously guided through financing and incentives, the focus of European energy policy is now shifting towards a regulatory, directive-driven approach. The forthcoming energy efficiency directive exemplifies this change.

Starting from the beginning of 2026, the energy efficiency directive may require that energy efficiency investments be made in connection with property repairs. In these energy renovations, there are two options: either to improve the thermal insulation of the buildings or to invest directly in renewable energy and self-sufficiency. As stated before, making properties future-proof ensures their attractiveness in the markets in the long run.

As the impact of the European Green Deal is becoming apparent in the continent´s energy landscape, investments in renewable energy are increasingly seen as a state-level strategic asset, with also geothermal energy gaining ground among major EU member states. For instance, Germany regards geothermal energy as a key element within its diverse mix of renewable energy sources. The country aims to build 10 terawatt-hours of emission-free geothermal energy by 2030.

QHeat’s patented geothermal heat well technology presents a practical and economically viable route to tap into clean, endless, and self-sufficient geothermal energy. We are looking into bringing our expertise and know-how to Central European markets.

Responsibility and certifications

In the real estate industry, a responsible and self-sufficient, intelligent property attracts anchor tenants, who

City environment
It is possible to utilize geothermal heat in a tightly built area. Photo: Tapio Haaja

in turn help usher in other sources of real estate revenue. But even the most prominent tenants do not always have the resources to find out how responsibility issues have been handled in the target property. Therefore, the importance of environmental certification such as LEED or BREEAM is increasing. Certifications are a valid yardstick for comparing different properties – the higher the LEED or BREEAM rating, the more likely it is that large and significant tenants will stay in the property in the future as well.

QHeat’s heat wells help achieve the highest LEED and BREEAM certificate levels. QHeat’s wells produce emission-free, inexhaustible, and self-sufficient energy for the needs of large properties. One QHeat geothermal heat well reduces the property’s emissions as much as 7,000 solar panels.

The benefits of QHeat’s solution are particularly highlighted in densely built areas, where lot space is often limited. QHeat’s geothermal heat wells are easy to place in a densely built environment.

 

Ream more about how Peijinkatu 6 in Espoo is heated using QHeat’s geothermal heat wells