The Integrated Home Renovation Service (IHRS) providers often face the question: ‘Is this model financially viable on a long-run?’. The answer is: no, unless the public authorities subsidize awareness raising and technical assistance activities leading to deep energy renovations.
The six existing French Third-Party Financing Companies, members of the association SERAFIN, combine different revenues to avoid relying solely on public funds. They cover a third of their costs by charging a fee to their clients, a third by collecting energy-saving certificates and a third by subsidies provided by the European ELENA technical assistance and European Structural and Investment funds. However, ELENA technical assistance is limited to the first 3 years of operation.
Two types of services should be distinguished within their public service offer:
- independent and free of charge first-level advice and
- the services that cover the execution of renovation works and the post-work monitoring of the quality of works and energy consumption.
Generating demand for deep renovations is a major challenge for IHRS to build a strong revenue model. Making customers aware of the benefits of deep energy renovation requires expertise and is time-consuming, which is a major difficulty in achieving cost effectiveness. Raising awareness and providing first-level advice, for example through public info-desks, should be considered as a public service fully financed by public authorities.
The technical assistance offered to homeowners to carry out their renovation project, from energy audit through renovation works to energy monitoring, represents a cost that they are not ready to pay. As it is the case for other public services, such as urban transport, public authorities need to partly subsidize this service to make IHRS viable.
IHRS need to clarify and build a contractual framework confirming they do perform a public service, and to prove that the resources they get from national and local governments are compliant with the State Aid Regime and proportionate with a Public Service Obligation that has yet to be defined.
Investing more public resources in IHRS would help generating more demand for ambitious energy renovations and transformig the leads in high-quality energy renovation projects. But, to invest more, local and regional governments need themselves adequate financial support from Member States and the European Union.