‘Renovation wave’ kicks off – looking to France for clues

By 29 May 2026, EU member states were required to transpose the “EU renovation wave” Energy Performance of Buildings Directive (EPBD) into their national laws. Many of them missed the deadline, but we expect that by the end of the year, most of them will have completed the transposition. As part of the process, countries have to legislate on specific items, including a definition of the minimum energy performance standards (MEPS) and a harmonisation of the Energy Performance Certificate (EPC) systems.

Uneven progress across the EU

The progress on the transposition is not consistent, with several countries still far from completion. France is among the few countries that has already completed the transposition process, and we take a closer look at the national renovation trends there for clues as to what the impact of the EPBD implementation might be once implemented across the EU.

In the Nordics, the EPBD implementation leverages extensively on existing legislation, which to some degree is already aligned with the ambition level of the EPBD; however, the details are still being ironed out. Denmark, Finland and Sweden are among the EU countries that have already submitted draft renovation plans to the Commission. In Sweden, the process to define MEPS levels is still ongoing, and finalisation is likely to take several more months. Denmark and Finland are at an advanced stage, with strong renovation governance already in place. Norway is outside of the EU track, although as a member of the EEA, it is likely to align to the EPBD, just with more flexible timelines.

The French example

In recent years, France has introduced an advanced regulatory framework for energy efficiency in buildings, providing an example of early EPBD adoption. It has strong MEPs in place, a well-developed EPC system and rental bans for low energy efficiency residential buildings.

When looking at the impact of this regulatory push on renovation trends, the effects appear mixed. It successfully shifted renovations from standalone measures to deep renovations and boosted renovations of bottom-rated properties. However, the total volumes and investment in energy renovations declined, impacted by inflation and changes in subsidy plans, and due to the complexity of moving from single renovations to more comprehensive ones.

Chart: Number of properties renovated via subsidy schemes

Our analysis shows that since 2022 – when the EPC system was reformed and policy emphasis moved toward deep renovations and G/F classes – insulation and entire building renovations took a larger share of the total spend. Heat pumps took a hit, mostly as a result of changes in subsidy schemes and lower energy prices, but possibly also as a result of the shift away from single measures. Looking forward, we expect any increase in the overall renovation subsidy pool to benefit heat pump manufacturers, which should also benefit from the ban of gas boilers in newbuilds (public: 2028, all: 2030).

Chart: Energy renovations in France – Share of total spend captured by selected measures (% of total spend in that year)

Rental bans and impact on property values

France has introduced rental bans for class G properties from 2025, and will ban class F from 2028 and class E from 2034. Overall, the ban had a mixed effect. While it partly improved renovation rates, it also reduced the rental supply as many owners could not or did not want to renovate, and either withdrew the property from the market or sold. This increased the discount for G-homes, with some sources putting the resulting "brown discount" to somewhere between 5-20% depending on the energy class, location and sector. We are of the view that a "brown discount" is likely to stick and become a structural feature of EPBD-compliant markets.

Conclusions

We expect the implementation of the EPBD over the next six months to kick-start a progressive shift in the type and possibly quantity of renovations. Based on the French example, the emphasis will likely shift to larger projects and bottom properties, and insulation could be taking a larger share of the total investment spend, while the role of professional installers and energy consultants is likely to grow. The extent to which the EPBD will lead to a pick-up in overall energy renovation volumes will depend on subsidy schemes as well as coercion measures, such as the rental bans seen in France.