Language: EN


Market Saturation of Energy Efficiency

You are probably aware of the approval of Decree 235/2013 by which, as of June 1, the energy certification of a building will be mandatory before its sale or rental. The professionals who can sign this certification are engineers, technical engineers, architects, and technical architects.

As you can see, the group of professionals who can carry out the certification is extensive. Too extensive. Furthermore, being a sector strongly affected by the economic crisis, many professionals see energy efficiency as a possible field of work. LinkedIn certification and energy efficiency groups have become filled, and energy efficiency companies are proliferating like mushrooms.

But, what is the real potential of the sector? Is there as much work as it seems? I will tell you about the reality of the sector based on my experience.

A little bit of history

First, let’s take a trip down memory lane to get a global view of the sector. During the years 2002 to 2006, in the midst of the construction boom, everyone was working on projects and construction management. Any recent graduate would quickly find a place in a technical office. Freelancers had no trouble finding projects to work on. There was an abundance, variety, and good pay.

It wasn’t until 2007-2008 that the crisis began to be strongly felt. The first to suffer were urban infrastructures. Due to the lack of new urban land development, the need for new services was eliminated. What used to be a weekly project for a low-voltage line became a rare occurrence, almost extinct. It was one of the first indicators of what was to come.

This period, 2005 – 2007, coincides with the boom of renewable energies. It was common to calculate solar energy systems for domestic hot water, photovoltaic production installations, and the implementation of wind farms. With some luck, you could even work on a geothermal or small-scale hydro project.

Many professionals began to move towards the renewable energy sector, attracted by the rumors of an abundance of work. However, they were too late. By the end of 2007, the renewable energy field also began to decline. Cuts to production incentives had burst the solar energy bubble, which fully deflated in 2010. The construction crisis ended new construction projects, and with it, the installation of geothermal and solar systems for domestic hot water collapsed.

Then came the efficiency

At that time, the idea of energy efficiency began to gain ground in the sector. The idea was certainly good. It sought to minimize energy consumption, so it focused on existing installations, almost mandatory at a time when no new construction projects were being started. Additionally, it aimed at the client’s economic savings, which constituted a powerful selling point in times of crisis.

As always, the business opportunity was real in the early stages. Those of us who were lucky enough to enter in 2007 were able to conduct energy audits and certifications for buildings and municipalities. However, the market was never very lucrative. The billing price was low in relation to the time and cost required, at least if you wanted to do the job correctly. However, it allowed for the prescription of work to improve efficiency, and having performed the audit, it was very likely that you would be selected for the renovation. This allowed, in many cases, to keep the business afloat while the construction sector was collapsing.

As time passed, it became increasingly difficult to acquire new clients. By 2011, most municipalities had already conducted their energy audits, and the remaining ones had no interest in doing so. Similarly, the majority of industries and commercial tertiary buildings, meaning those with significant energy consumption, had already taken measures to reduce their consumption or had conducted an audit. Additionally, the available credit had been significantly reduced, so clients were reluctant to make investments, even with a return on investment of 4 or 5 years. On the other hand, there was an increase in favoritism and the dubious legality of commercial-political agreements. Even certain public institutions, such as universities and technological centers, began to implement energy efficiency measures using public resources, even though it was legally incompatible.

Unaware of this reality, more and more professionals moved into the sector. The need, the unemployment situation, and the hope of finding work caused many technicians to enter the market. It was becoming increasingly difficult to visit a client without having been visited by many others before. The saturation led to a drop in prices and, with them, the quality of service. The market was filled with “pirates” who promised miraculous savings without even having visited the site. Desperation is a bad advisor, and not all technicians have the same technical criteria, nor do they equally defend the quality of their work.

What’s to come

My prediction about energy certifications is that they will become a real battle to sell at all costs, lowering the price and disregarding quality. Similar to what happened in the past with technical inspection reports, it is a market that is exhausted before even beginning exploitation. There will be “people” (I refuse to call them technicians) who will have a dossier with 20 or 25 pre-calculated models, and when given a job, they will find the most similar one, copy it, sign it, and complete the certificate without even visiting the property. They will invoice €150-175, barely enough to earn a decent living.

The market is oversaturated, and much of the blame lies in the low qualifications required to conduct an audit or issue a certificate. Anyone with a degree thinks they can do it. Let’s be honest, buying a power logger and a thermal camera or taking a refresher course in energy efficiency and renewables does not make you an energy consultant. Just as having worked for a year and a half in a design office does not make you a Project Manager, no matter how much you like to put it on your resume.

Objectively, producing a project for the construction, urbanization, infrastructure, or facilities in buildings has much more demanding technical requirements than those required to conduct an energy certification. This is a terrible mistake because if someone does not know how to design an installation, or if they have not physically seen a similar one, how can they be expected to audit it? Conducting a proper energy audit is a complex job. It cannot be done with an 8-hour course, where the only one who truly benefits is the one teaching the course.

Personally, I would demand that in order to conduct a certification or an audit, the execution of a project with similar characteristics and importance has been completed. This would end the intrusion into the sector. Unfortunately, as this is not the case, there will continue to be technicians who lower the price and give poor advice to their clients just to secure the project. Without requirements and without responsibility, the door is open. If you add to this that clients, individuals, industries, and even municipalities choose the cheapest technician regardless of the quality of the work performed, tragedy is inevitable.

My advice is that if you really want to work in the field of energy efficiency and renewable energies, aim for more demanding and elitist sectors than energy audits. Any “smart” person can attempt to produce a poor certification. But if, for example, the project involves designing and implementing automation within a large building, not just anyone can do it. Always focus on exclusive sectors where the technical requirements exclude the less qualified.