Why energy retrofitting hasn’t taken off 

The build­ing sec­tor (res­id­en­tial and non-res­id­en­tial) is respons­ible for 28% of glob­al green­house gas (GHG) emis­sions¹. Although the French aver­age is in line with this fig­ure, the sec­tor accounts for 36% of the European Union’s emis­sions². So, what are the prin­cip­al means of mit­ig­a­tion? Indir­ect emis­sions. Heat­ing, domest­ic hot water, light­ing, vent­il­a­tion, and house­hold appli­ances account for two thirds of the sector’s emis­sions. Accord­ing to Ademe, in France, the sector’s con­sump­tion has increased by 20% in 30 years³.

Some coun­tries are now set­ting tar­gets. Thermal reg­u­la­tions gov­ern the con­struc­tion of new build­ings (the RE2020 is applic­able in France, for example). Many ret­ro­fit­ting plans, based on fin­an­cial aid, aim to improve the thermal insu­la­tion and heat­ing of exist­ing build­ings. Energy ret­ro­fit­ting is a cru­cial means of mit­ig­a­tion, but the build­ing renov­a­tion rate is only 1.1% in main­land France⁴. As such, we can see that energy ret­ro­fit­ting is strug­gling to gain momentum: CO2 emis­sions from hous­ing energy con­sump­tion fell by an aver­age of 2.5% per year between 2012 and 2019⁵, yet 17% of French hous­ing (i.e. 5.2 mil­lion dwell­ings) are energy “sieves”⁶.

So, how can we speed up energy ret­ro­fit­ting in France? A report pub­lished in May 2022 by IDDRI and ADEME⁷ is based on work car­ried out by 23 experts, as one of the authors, Andreas Rüdinger, describes in detail.

Every­one agrees on the import­ance of energy ret­ro­fit­ting, but there has been no real pro­gress, it is in total dis­ar­ray! In our report car­ried out in 2020, we iden­ti­fied vari­ous stick­ing points that we call con­tro­ver­sies. The most import­ant of these is the dif­fi­culty of impos­ing energy-effi­cient renov­a­tion as a new social norm.

On the house­hold side, for example, there is no label to com­pare prop­er­ties on the hous­ing mar­ket. The energy per­form­ance dia­gnos­is provides use­ful indic­at­ors, but energy per­form­ance is far from being a pri­or­ity in the prop­erty mar­ket. Real estate pro­fes­sion­als also need to recog­nise this new stand­ard. How­ever, pro­fes­sion­al fed­er­a­tions are still very reluct­ant to accept energy renov­a­tion oblig­a­tions and the con­straints that could res­ult from them and are gen­er­ally less inter­ested in energy renov­a­tion than in new construction.

Of course. Over the past 10 years, it has become clear that there is no stra­tegic roadmap. Each year, sub­sidies alloc­ated dif­fer­ently: some­times towards spe­cif­ic equip­ment (such as the replace­ment of boil­ers), and less towards oth­ers (such as double glaz­ing), or towards ret­ro­fit­ting pack­ages, etc. In 2017, a study showed the value of set­ting up a single-sub­sidy based on the per­form­ance achieved after renov­a­tion. The 2019 Energy and Cli­mate Law obliges the State to include a com­pre­hens­ive plan for energy ret­ro­fit­ting in the next Mul­tian­nu­al Energy Pro­gramme, but this has been slow to materialise.

This lack of a coher­ent lead­er­ship is one of the major obstacles to achiev­ing wide­spread ret­ro­fit­ting. It is impossible to carry out any real trans­form­a­tion of the sec­tor, as com­pan­ies can­not invest without a medi­um-term vis­ion. This trans­form­a­tion is how­ever neces­sary because there is not enough incentive. 

The second con­tro­versy iden­ti­fied is the lack of a stra­tegic roadmap, which gen­er­ates eco­nom­ic obstacles. Eco­nom­ic ana­lys­is of ret­ro­fit­ting suf­fers from a lack of con­sist­ency. How then can we define the scope of the cost of energy ret­ro­fit­ting? For some, it rep­res­ents the entire cost of the work. But this then includes work that is not related to energy per­form­ance because most house­holds carry out more com­pre­hens­ive renov­a­tions than just for that pur­pose. Oth­er ana­lyses focus on the addi­tion­al cost dir­ectly attrib­ut­able to the energy per­form­ance improve­ments, exclud­ing main­ten­ance and repair work (e.g. repla­cing a boil­er at the end of its life is not included in the cost of energy renovation). 

The same ques­tion arises for the bene­fits obtained: should we only take into account the reduc­tion in energy bills, or should we include the bene­fits related to com­fort and par­ti­cip­a­tion in the eco­lo­gic­al trans­ition? To over­come this con­tro­versy, we pro­pose eval­u­at­ing not the prof­it­ab­il­ity but the eco­nom­ic viab­il­ity of renov­a­tion. It integ­rates dif­fer­ent cri­ter­ia: the bene­fits for house­holds in the broad sense, fin­an­cial solvency and the reduc­tion of risks linked to effi­cient ret­ro­fit­ting. This last point remains cru­cial for build­ing col­lect­ive con­fid­ence around “low energy” renovation. 

Effi­cient ret­ro­fit­ting can­not be a basic renov­a­tion res­ult­ing in a bet­ter per­form­ance class than F.

Finally, it should not be for­got­ten that by tack­ling the “thermal sieves”, inhab­ited by low-income house­holds, we are also work­ing towards a fair trans­ition. A large part of the cost of renov­a­tion is covered by pub­lic fin­ances, but the remain­ing costs or pre-fin­an­cing can be a real obstacle. In response to the energy crisis, the French gov­ern­ment com­mit­ted €30 bil­lion to freeze prices and help pay bills: this kind of invest­ment in energy ret­ro­fit­ting would have been sig­ni­fic­ant, but noth­ing has been done.

We need to make effi­cient ret­ro­fit­ting a new social norm. The term “effi­cient renov­a­tion” must be more clearly defined and made trans­par­ent for industry play­ers, as is the case in Ger­many. It can­not be a basic renov­a­tion that res­ults in a bet­ter per­form­ance class than F. An effi­cient ret­ro­fit is a com­pre­hens­ive renov­a­tion that ensures the deliv­ery of a “low energy building”.

In order to work towards this goal, sub­sidies must be accom­pan­ied by per­form­ance oblig­a­tions at the end of the work. Today, there is no sys­tem­at­ic mon­it­or­ing of the impact of the sub­sidies, and one-off works receive more sup­port on a pro-rata basis. This sys­tem is not only det­ri­ment­al to energy per­form­ance but also to the mon­it­or­ing of policies. We have no clear vis­ion of the real effect­ive­ness of the renov­a­tions undertaken.

This is cer­tainly a step in the right dir­ec­tion. When we star­ted our study three years ago, the build­ing sec­tor was the one that was fur­thest behind on its car­bon budget. How­ever, it should be noted that the cur­rent good res­ults are partly explained by two changes: the sec­tor’s car­bon budget was increased in the revi­sion of the SNBC in 2020 (edit­or­’s note: it went from 65.4 to 80 Mt CO2e for 2020) and the meth­od of cal­cu­lat­ing GHG emis­sions was changed, shift­ing part of the emis­sions to the energy sector.

This down­ward trend can be explained by short-term gains, such as the massive replace­ment of boil­ers. How­ever, these gains will not allow the long-term object­ives to be met, in par­tic­u­lar the object­ive of achiev­ing a “low energy build­ing” aver­age per­form­ance level for the sec­tor as a whole by 2050.

Anaïs Marechal