At GET Fund, we invest in startups across the climate and cleantech spectrum. Within this landscape, energy-efficient renovation stands out as one of the most impactful and under-digitized levers. This deepdive explores the structural forces shaping this market and highlights where innovation is unlocking scale.
Why Energy-Efficient Renovation Is Essential
Buildings account for 40% of energy consumption in the EU and roughly one-third of energy-related greenhouse gas emissions. Compounding the challenge, 90% of the buildings that will exist in 2050 have already been built. This makes one thing clear: focusing solely on new, energy-efficient construction won’t be enough to meet climate targets—we must address the existing building stock.Climate goals, however, aren’t the only force driving demand for energy-efficient retrofits. Depending on the depth of intervention, a building’s energy performance can be improved by up to 90%. With recent spikes in energy prices and growing uncertainty around future costs, renovations can deliver substantial long-term economic benefits.
Current energy performance data underscores the urgency: in Germany, just 13% of buildings achieve energy grades of A+, A, or B. Experts estimate that to stay on track, the annual renovation rate must rise from around 1% to 2-3% by 2030. Just as importantly, the depth of renovation matters. Deep renovations – which yield the largest efficiency gains – currently represent only 0.2% of all retrofits in Europe. Recognizing this, EU leadership has made renovation a cornerstone of its European Green Deal. The “Renovation Wave” initiative aims to upgrade 35 million of Europe’s 111 million buildings by 2030.
The Reality of Renovation: Fragmentation, Complexity, and Opportunity
The renovation space is notorious for its high fragmentation. There are tons of different stakeholders at play – from architects to installers, financial supporters, contractors to suppliers and the list goes on. This makes the process very hard to navigate for homeowners and alike.
Additionally, the retrofit itself is highly diverse, which poses a major challenge to scaling renovation processes. Unlike new builds, existing European buildings rarely follow standardized designs. Each structure is unique, requiring tailored and often modular retrofit solutions. Variables such as local climate, geographic conditions, and the skill level of available installers all influence both the planning and execution of renovation measures.
Installers play a particularly critical role. Small and medium-sized enterprises (SMEs) account for 99% of construction companies in the EU, meaning the market is highly fragmented and dominated by local players. Scaling retrofit solutions requires building extensive regional installer networks—outsourcing to centralized teams is not a viable option. However, energy-efficient retrofits typically demand advanced skills that many local workforces currently lack. Surveys among architects consistently highlight the shortage of qualified installers, and the European Construction Industry Federation (ECIF) estimates that 25% of the workforce requires upskilling to meet current renovation demands. 
Innovation Unlocking Scale in Energy-Efficient Renovation
The construction sector has long struggled with low productivity and slow digital adoption, and the renovation space has historically followed suit. However, several technological advancements are beginning to transform the industry:
- AI, Digital Twins & advanced simulation tools
The planning phase is becoming faster, more accurate, and data-driven. Where design once relied on hand-drawn plans and manual estimates, today’s tools can generate precise building models using cameras and sensors. Digital twins enable detailed simulations to identify optimal measures for minimizing heat loss, improving energy use, and integrating renewable systems. - Smart Building Systems and IoT integration
Renovations increasingly include interconnected systems like smart thermostats, heat pumps, and rooftop solar panels. These devices are cross-analyzed through IoT platforms to optimize energy use in real time—both as a non-invasive efficiency upgrade and as a tool to maximize performance post-renovation or in new builds. - Advanced Materials & Modern Manufacturing
Innovation in both materials and manufacturing methods is helping to streamline and scale renovation efforts. High-performance insulation, climate-adaptive building components, and other new materials are improving energy outcomes. At the same time, off-site prefabrication, modular construction, and even 3D printing are accelerating deployment, reducing on-site labor, and improving quality control.
How does the startup landscape look like?
The retrofit startup landscape is diverse and rapidly evolving, with clear clusters forming around specific phases of the value chain. While it’s challenging to pinpoint the “best” entry point for a business, current startup activity reveals strong thematic patterns that reflect broader trends in the industry.
A significant number of startups are concentrated in the pre-execution phase. These companies leverage AI and software tools to streamline early-stage planning. Their offerings typically include generating initial retrofit concepts based on minimal user input, identifying relevant subsidies or financing options, and connecting homeowners with suitable contractors or installers. They act as digital enablers, removing friction at the very beginning of the renovation journey.
The execution phase is also attracting attention—particularly around empowering installers. Europe’s retrofit market is still dominated by fragmented, regional SMEs—many of which are family-owned and operate with outdated or inefficient processes. In response, a wave of startups has emerged offering digital tools to professionalize workflows, simplify project management, and reduce friction in the installation process.
A third major cluster is formed by end-to-end providers. These startups aim to offer homeowners a seamless experience by serving as the single point of contact throughout the retrofit journey. While some also handle the installation themselves, others function more as general contractors, orchestrating third-party services. Many of these models also integrate software-based energy management to optimize system performance post-installation—extending their role beyond execution into ongoing value creation.
Conclusion
The energy-efficient retrofit sector is set for growth – driven by economic opportunity, ecological necessity, and advancing technology.
- The pertinent question is no longer whether to engage in retrofitting, but rather who will lead and benefit from this transformative movement.
If you’re building a startup that tackles the renovation challenge, we’d love to hear from you. Get in touch with GET Fund to explore how we can support your journey.
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