Energy renovation’s blind spot: the 50% performance gap

In 2024, energy con­sump­tion linked to the oper­a­tion of build­ings – heat­ing, air con­di­tion­ing, etc. – accoun­ted for 45% of final energy con­sump­tion in France¹. The res­id­en­tial sec­tor is largely respons­ible for this. Whilst the main source of energy con­sumed is elec­tri­city – which is rel­at­ively low-car­bon in France thanks to nuc­le­ar power and renew­ables – fossil fuels still account for a sig­ni­fic­ant pro­por­tion (around a third in 2024) of house­holds’ energy con­sump­tion for their homes.

These green­house gases (GHGs) are emit­ted dur­ing all phases of a building’s life cycle: dur­ing con­struc­tion, use and end-of-life. The most sig­ni­fic­ant phase is the use phase: a sub­stan­tial amount of GHGs is emit­ted in con­nec­tion with energy con­sump­tion. This is why it is essen­tial to take action dur­ing this phase.

Yes, but res­id­en­tial build­ings account for the major­ity of energy con­sump­tion. Fur­ther­more, the con­text is dif­fer­ent. In the com­mer­cial sec­tor, eco­nom­ic viab­il­ity is the driv­ing factor, prompt­ing decision-makers to optim­ise energy con­sump­tion. In con­trast, the res­id­en­tial sec­tor is held back by bar­ri­ers to invest­ment. This makes the res­id­en­tial sec­tor a pri­or­ity area for action.

We must first focus on older homes. Indeed, new homes account for only around 1% of the hous­ing stock, and they are already highly energy-effi­cient thanks to stand­ards such as RE2020.

For older homes, there are sev­er­al options: 

• Indi­vidu­al homes: car­ry­ing out energy effi­ciency work (such as insu­la­tion) and elec­tri­fy­ing the home.
• Col­lect­ive meas­ures: decar­bon­ising the elec­tri­city supply.

Since the mid-2000s, a range of pub­lic policies has indeed been driv­ing improve­ments in the energy effi­ciency of build­ings: tax cred­its, the ‘Ma prime rénov’ scheme (in France), zero-interest eco-loans, energy-sav­ing cer­ti­fic­ates, etc. In addi­tion to these sub­sidy schemes, more coer­cive meas­ures have been intro­duced, such as the car­bon tax, the ban on new oil-fired boil­ers, and the pro­hib­i­tion on let­ting energy-inef­fi­cient prop­er­ties. Yet, too few major renov­a­tions – involving insu­la­tion and the replace­ment of fossil fuel heat­ing sys­tems with heat pumps – are being car­ried out by households.

As shown by INSEE data², there is on aver­age a 50% dis­crep­ancy between the energy per­form­ance pre­dicted dur­ing a renov­a­tion and that actu­ally meas­ured. In oth­er words, if an energy sav­ing of 1 kWh is advert­ised, a real sav­ing of 0.5 kWh is more likely. How­ever, the more extens­ive the renov­a­tion, the smal­ler this gap becomes, to the household’s benefit. 

We have shown that, due to sev­er­al exist­ing bar­ri­ers to renov­a­tion, only 5% of renov­a­tions are cost-effect­ive for house­holds³. Yet, in a per­fect renov­a­tion mar­ket, this fig­ure could rise to 26%. And if we con­sider social cost-effect­ive­ness, it is estim­ated that renov­a­tion works would be cost-effect­ive for 55% of the hous­ing stock – around 15 mil­lion homes – thanks to avoided emis­sions and health­care costs. 

Money is not being thrown out the win­dow. Almost all pub­lic funds are rein­ves­ted in renov­a­tion. But the budgets are poorly alloc­ated. Our estim­ates show that €6–8 bil­lion in pub­lic and private invest­ment is needed. That is equi­val­ent to the cur­rent budget!

Our research shows that the money must pri­or­it­ise own­er-occu­pi­ers of detached houses. This is already the case today, and indeed to an excess­ive extent. Alloc­at­ing a por­tion of this budget to oth­er seg­ments of the pop­u­la­tion (own­er-occu­pi­ers of flats, and ten­ants of flats and houses) would be more effective.

We pro­pose a paradigm shift and the adop­tion of a for­ward-look­ing approach. In prac­tice, this involves identi­fy­ing pri­or­ity house­holds, enga­ging with them and sup­port­ing them through the renov­a­tion pro­cess. With this approach, few­er homes would be ren­ov­ated, but the renov­a­tions would be more effective.

All levers must be activ­ated, wheth­er indi­vidu­al or col­lect­ive. Even if energy were entirely decar­bon­ised, there would still be reas­ons to improve the energy effi­ciency of homes. Energy renov­a­tion improves the qual­ity of hous­ing, which gen­er­ates many oth­er bene­fits. Fur­ther­more, even if energy were car­bon-free, it might not be entirely pro­duced in France. Yet cur­rent geo­pol­it­ic­al instabil­ity high­lights the import­ance of redu­cing energy depend­ence, and this can only be achieved by improv­ing the energy effi­ciency of homes.

Anaïs Marechal