L R AS Published on Tuesday 15 September 2020 - n° 331 - Categories:PV Watch
A look at the small French installers facing the covid
Confinement and then deconfinement were the occasion for pointillist statements. Each company sought to embellish its situation and present a flattering image of itself. Until this study by Qualit'EnR, there had been no survey of the situation of French installers. How was the cessation of activity? How did the companies act? What were the effects on cash flow? What were the obstacles to a net recovery in activity? How do these companies view the second half of the year? This is a study that deserves attention.
The impact of the crisisonly 42% of companies stopped during the two months of confinement. 30% stopped for less than three weeks! The effect on cash flow varies greatly from one installer to another, but is generally minor. Confinement constituted leave for a number of companies.
Prospects for recovery and making up for loss of activityWhile half of the companies resumed their activity as soon as the confinement ended, others had to postpone starting work for economic reasons.
Time lost during confinement cannot be made up forThe absence of customer canvassing during confinement leads to insufficient orders a few weeks later. Only half of the companies found normal activity at the end of June. They often lack equipment, but few complain about dry cash flow.
These two studies reflect the situation of the French economy, the centralisation, the abandonment of the local, the need for a regeneration of the regional level.The companies were quite alone during the period of confinement. An intermediate level is missing to gather, stimulate and coordinate promotional actions, customer recruitment and communication of new products to the population.
There is a lack of reflection and a medium or long-term vision to establish the future.The State only seems to take care of large companies, which is shown by the presentation of the Hydrogen Plan and the Recovery Plan. The Prime Minister and the Minister of Energy Transition "forgot" to talk about solar, renewable energies or photovoltaic. There is an urgent need for local action to promote solar and more generally renewable energies. If the government does not want to say that it is going to grant the construction of several EPRs to supply energy to electrolysers, the regions, territories and communities of communes must organise themselves to develop RE.
Qualit'Enr's two studies on the period 29 May-29 with companies qualified as RGE in June are anything but uninteresting. Admittedly, only about 600 of the 11,600 companies surveyed responded. Most of them were SMEs with fewer than 10 employees, at 92%. An examination by number of employees would have given a different picture! The survey is not representative of the entire sector of the large companies that make the headlines, but these companies represent the French industrial fabric. This is why these two surveys are interesting. The first concerns the impact of the crisis with a survey conducted from 29 May to 5 June. The second one wants to perceive the recovery and if there has been a catch-up of activity.
The impact of the crisis:
42% of the companies surveyed stopped their activity completely from the start of the containment and for two months or more; 22% stopped for one to two months; 14% suspended their activity for one month. 29% reduced their activity for a maximum of three weeks. This diversity of behaviour certainly reflects particular cases or varied geographical situations.
This explains why the turnover of these companies in April 2020 collapsed in relation to that of April 2019: a quarter of the companies (24%) received no income over the period, another quarter (27%) suffered a 75% drop in turnover. A fifth (20%) saw a halving of their financial revenues. The loss of income is considerable and should have weakened cash flow, which is not the case as we will see below. This is the consequence of the lack of activity, disruptions at La Poste and possibly also difficulties experienced by some customers.
Very little prospecting during the confinement period
Only 23% (a quarter) of companies took advantage of this period of inactivity to approach customers or prospects. 8% used it to train or to keep abreast of developments in the business. These low figures are worrying because the future of companies has been neglected by managers who, according to the answers "to take time for oneself or one's family", preferred to 46%. Rest time dominated even with the other answers (preparing the takeover, reorganising the premises, taking administrative steps, updating promotional tools). They make one believe that there is a lot of work and activity. In truth, waiting and inaction dominated.
Prospects for recovery and catching up on the loss of activity
Companies resumed their activity in May at 93%. Half of them (52%) had resumed activity from 11 May, the date of official deconfinement; 41% during the month of May; and 7% of them were planning to return to work in June or later. Reasons for delaying return to work (for the 7% of respondents) included cancelled or postponed construction sites (at 31%), supply difficulties (28%), the(28%), the application of complicated or impossible health rules (20%), insufficient employees (childcare, illness, or right to withdraw from the workforce) for 11%, and the personal choice of the manager (10%). It should be noted that 60% of the responses are related to the economic context of the companies.
Recovery difficulties also stem from customer relations: the postponement and cancellation of building sites are cited by 53% of the answers, but there is also the refusal of access to a building site (39%); the refusal to give up a building site (39%); the refusal of access to a building site (39%); the refusal of access to a building site (39%).The refusal to start a worksite (33%); or the refusal to draw up an estimate (35%); payment difficulties on the part of customers (35%) should also be mentioned. Only 23% (one-quarter of the companies) had no difficulties with their customers.
At the end of June, only half of the companies had returned to normal activity.
As of June 26, 2020 (45 days after the end of containment), while half (53%) of respondents consider their activity to be normal, 35% consider it insufficient or very low. This is the consequence of the cessation of executive canvassing during confinement. However, 96% of the work had resumed. This has repercussions on the level of turnover in June, which is only (at 27%) equal to or higher than in June 2019.Conversely, 38% of companies received 75% of the turnover of the previous year, 20% half, and 15% between 0% and 25%. This observation should continue in September, with 31% expecting sales to be equal to or higher than in September 2019 (indicating a very slight increase in the number of companies with a turnover of at leastactivity since the end of containment), but 40% will still be at 75% of their 2019 revenue; 29% will remain below half of last year's revenue.
Figures will change little for the year as a whole, with only 34% achieving as much or more turnover than last year; 43% will only receive 75% of the 2019 level. This indicates that the recovery in activity is slow, very slow. It is the consequence of the health trauma among the French population, of the cessation of prospecting and also of a lack of awareness among households of the benefits of renewable energy equipment.
Turnover lost during the confinement period will not be made up for
This lost turnover will never be made up for 22% of managers. For 32% of those questioned, it will take more than six months to return to the previous level; 18% do not dare to make a decision. In other words, the loss of turnover is irremediable for a large part of the companies, because the interest of the French in renewable energies is neither significant nor obvious. Moreover, there has been no adaptation of companies to a new situation. This is quite different from the United States, where large installers have adapted by promoting and recruiting customers online. The American residential market only fell by 25% in the second quarter compared to the first (admittedly this isa national average, whereas in France, the breakdown leads to a 35% drop).
Above all, households are feeling (at the end of June 2020) new worries linked to total or partial unemployment, are experiencing particular situations (divorce, death, etc.), and have to cope with the consequences of the economic crisis.s) for 34%; fear a financial crisis (12%); some add difficulties in obtaining financial aid and/or fear a decrease in state aid (15%). This shows the timidity of the French population, who consider that the crisis is far from over and that it is better to wait and see rather than to engage in work. It is true that promotions and advertisements for renewable energies are rare, not very attractive and do not encourage confidence, because eco-offenders are more often cited than companies that have carried out good projects. As a result, we reap what we sow! That is to say a certain apathy of the French population towards the important needs, those of implementing renewable energies.
The time lost during confinement is not making up for it
As a result, the RGE companies consider that they do not expect an increase in the work to be carried out (at 43%). Only a quarter (24%) envisage an increase in worksites; and a third (33%) see no change, reflecting an unclear, fluctuating situation that does not encourage optimism. These companies admit (two-thirds) that they have no particular difficulties with their customers, only that there are not enough of them! This is the consequence of the lack of promotion at both national and local level during the confinement.
No real obstacles to the resumption of activity
On the other hand, the obstacles to the resumption of activity do not appear to be redhibitory: supplies of materials are only important for a quarter of the companies (26%), the unavailability of personnel is low (10%). Only the drop in productivity is significant in 22% of companies. Cash flow difficulties are cited in only 16% of the responses, which is almost the lowest rate of obstacles cited to the resumption of activity. The main cause of the impediments to the resumption of activity remains the low number of construction sites. Indeed, one cannot have preferred one's rest and family to one's work during the confinement, and at the same time, see one's business grow! We come back to the previous remarks: the lack of prospecting is reflected in the order book and the absence of national, regional and local stimulation in favour of RE.
These two studies reflect the situation of the French economy, the centralisation, the abandonment of the local, the need for a regeneration of the regional
The overview of these small and medium-sized installers shows several French characteristics: an omission by the authorities of this fabric of companies closest to the consumers; the absence of a representative organisation capable of disseminating in a reduced radius (local or regional), an incentive for renewable energies; the crying lack of promotion of serious and competent companies (the label n'label is not enough); insufficient economic dynamism which, during the confinement period, resulted in the withdrawal and cessation of activity of these companies when this should have been the case. This should have been the time for their in-depth reorganisation, their reinvention, their prospecting messages, the announcement of new equipment and new organisation: time has been lost under the pretext of the pandemic, without looking beyond this sanitary crisis (there, the government has a heavy responsibility); an absence of alternative proposals based on the Internet to make new products known, but also and above all, the financial or practical advantage of new equipment is not sufficiently emphasised. In short, there is a lack of in-depth action on the intermediate level that makes a region, a community of municipalities or a territory successful.
There is a lack of reflection and a medium or long-term vision for building the future.
We don't get much help from the State which, in its Recovery Plan, relies on electrolysers producing hydrogen. This will concern a few large groups, whereas the Prime Minister and his Minister for Ecological Transition have not once uttered the word 'solar', 'photovoltaic', 'photovoltaic' or 'solar energy'.que', 'renewable energy', perhaps as the president of SER-Soler says because the French government does not believe in the future of solar energy. Or because the French government does not dare to announce that its hydrogen plan will be based on low-carbon nuclear power. If the national authorities don't believe in it, we might as well show locally that solar energy is worthwhile, concretely, financially and practically. The French will adopt it. The population is beginning to perceive that decisions coming from above don't seem very relevant!
There is a message to be implemented: "Help yourself, the sky will help you".