France’s national statistics office, INSEE, has just released a new study on the results of several years of work to improve the thermal insulation of homes.
The subject may sound dry, but it’s central to Western Europe’s energy dilemma. In France, households consume about a quarter of the nation’s total energy. Much of the housing stock is ancient, full of buildings that the French wryly call “thermal sieves” – drafty old homes where heat slips away through walls, roofs, and windows. For residents, that means burning through energy in winter just to keep the chill at bay. For governments scrambling to save every kilowatt-hour, it looks like low-hanging fruit.
That’s why nearly every European country has set up programs to retrofit older homes. France even went so far as to ban landlords from renting out poorly insulated apartments, hoping to force owners to act. Instead of a wave of renovations, though, the policy sparked a crisis in the rental market.
This isn’t the first time experts have dug into the problem. Two years ago, researchers in England and Wales published a heavyweight study with the mouthful title Assessing the effectiveness of energy efficiency measures in the residential sector gas consumption through dynamic treatment effects: Evidence from England and Wales. Behind the academic jargon were two striking conclusions.
First, when insulation improves, people don’t necessarily reduce their energy use. Instead of pocketing the savings, many simply dial up the thermostat. The heating bill barely shrinks – sometimes it even grows. Comfort goes up, efficiency not so much.
Second, and this will sound familiar to anyone in construction, insulation only works when it’s done properly: skilled workers, top-notch materials, and designs tailored to each building. Anything less is window dressing. Rush the job, and within a few years the plaster peels, panels warp, and by year five the home is back to being a sieve.
INSEE’s latest report, published in July 2025, offers a rare look at the problem through the lens of real consumption data from smart meters. It confirms what many suspected: insulation works, but the effect is modest. On average, electricity use fell by just 5.4 percent in homes heated with electricity, and gas use dropped 8.9 percent in gas-heated homes. The biggest savers were the heaviest users, who cut consumption by up to 9.2 percent for electricity and 16.6 percent for gas.
Still, the gap between theory and reality is striking. The actual savings amounted to only 36 to 47 percent of what the official models predict – the so-called energy performance gap. Why? Researchers point to three main culprits: about 40 percent of the shortfall comes from poor-quality workmanship, another 40 percent from overly optimistic models (especially for wall insulation), and only around 6 percent from the rebound effect – the tendency to enjoy warmer homes rather than lower bills.
The study also reveals just how much household behavior and circumstances matter. Comfort preferences, household income, and the initial energy profile of a home all shape the results. For some lower-income families, better insulation doesn’t reduce bills at all – it simply lets them heat their homes to a livable temperature. In those cases, consumption can even rise after renovation.
When it comes to the economics, the numbers are sobering. For electrically heated homes, the average investment was around €14,300, for a meager €120 in annual savings. For gas-heated homes, the costs averaged €13,700, with yearly savings of €150. That’s a payback period of about a century – longer than most mortgages, and far longer than the materials themselves will last.
So what’s the bottom line? Insulation delivers real improvements, but they’re modest, uneven, and highly dependent on quality, context, and human behavior. Europe’s effort to plug its “thermal sieves” may still be necessary, but the dream of quick returns and effortless energy miracles remains out of reach. For now, it looks less like a miracle cure – and more like a very long, very expensive waiting game.
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