The risk of concentration lurks in the energy renovation sector according to a study

While the home energy renovation market is benefiting from new government impetus, the entire building and energy sector is in order. The recent acquisitions of EDF or the La Poste group illustrate the challenges of an ultra-competitive sector dominated by a few heavyweights, underline the experts from Echos Etudes who have just published their benchmark study: “The energy renovation market for housing ”(December 2020).

Massive public support ...

The energy renovation of housing is a “national priority” for the government and the resources put on the table are colossal. An additional 2 billion euros will be injected in 2021 and 2022 to support the thermal renovation of buildings as part of the France Relance plan. This new measure, announced in September 2020, is added to the arsenal already in place: energy renovation plan for buildings which targets 500.000 renovations per year, transformation of the tax credit into a bonus (MaPrimeRénov) with an increased budget and a expanded scope ...

At the same time, the 5th EWC period will begin in 2022 with increasing targets. This device is appreciated by the public authorities because it costs them nothing, all the financing being based on the energy suppliers and especially their customers.

… Insufficient to meet the objectives

In particular, the government wants "to strengthen support for overall renovation" and the eradication of thermal strainers by 2030. These commitments are structuring for the energy renovation sector because they involve tackling two serious issues: the financing and the constitution of global offers.

Because energy renovation is expensive and even with aid, the rest is high. It is even the main obstacle to renovation. The situation regarding the remaining expenses will not change in the medium term, especially as the very hard economic context will aggravate the problem. The economic impact of the health crisis, which dragged on despite the launch of the vaccination campaign, would be felt for a long time. Households risk showing a wait-and-see attitude in 2021, or even beyond, by postponing their work project when they can.

The only solutions are to increase aid. Will public finances allow it? Not sure. On the other hand, the increasing objectives of the EWCs will perhaps translate into an increase in the level of premiums. As it stands, the objective of 500.000 renovated homes per year in the medium term seems unlikely. Reaching 400.000 annual renovations within 3 years would already be a good performance.

The other difficulty to be solved for market players is to put together a comprehensive, simple and readable offer, integrating in particular energy audit, financing and execution of works.

The battle of the lead

Even if the energy renovation market does not always keep its promises, it is a playground for a multitude of contenders from various backgrounds. Energy suppliers, manufacturers of materials and equipment, traders, DIY stores, delegatees and construction brokers, all have a common goal: to be the point of contact for consumers. It is the sinews of war because it is synonymous with capturing an important part of the value.

But the competition is very keen and the landscape close to saturation. In this highly fragmented ecosystem, and hard hit by the health crisis, everything is pushing for an acceleration of the concentration of the sector as illustrated, for example, by the buyouts of Mychauffage. com by EDF or Economie d'Energie by the La Poste group ...

To learn more about this study: www.lesechos-etudes.fr