Section 1
Why more demand makes you poorer, not richer
Under normal conditions, more demand is good news you can act on: you hire, you grow, you bank the margin. That logic depends on a labor supply that responds when you pay more. In the Nordic trades right now, it largely does not. The craftspeople are not sitting idle waiting for a better offer. They are already booked, already employed, already the target of every other firm's recruiter. So the subsidy does three things in sequence, and only the first one feels good: 1. Your order book inflates. Customers who were on the fence commit because the grant lowers their price. Demand you cannot serve piles up as backlog. 2. Wages get bid up around you. Every firm sees the same booming demand and reaches for the same fixed pool of craftspeople. The only way to grow headcount is to take someone from a competitor, and the price of doing that keeps climbing. Your labor cost rises whether or not you win the bidding. 3. Your declined-work pile grows. You end up turning away subsidized, profitable jobs because you physically cannot staff them, while your wage bill goes up for the crew you already have. Note one honest caveat on the specifics: the exact deduction ceilings, eligible work, and payout rates differ by country and change often. Sweden's ROT deduction for renovation labor, Norwegian and Danish retrofit and energy schemes, and the periodic adjustments to each are moving targets. Treat the mechanism as the durable fact and check the current-year rate before you quote anything against it.
Section 2
What to do inside the trap
You cannot fix the policy. You can refuse to let a demand subsidy set your prices and your job mix as if it were a capacity subsidy, which it is not. Let the grant raise your price, not just your volume. When the state pays part of the customer's labor bill, the customer's sensitivity to your rate drops, because they are spending partly the government's money. That is exactly the moment to hold or raise your price rather than compete on it. A subsidy that lowers the customer's out-of-pocket cost gives you room to charge more for your constrained hours without losing the job. If you pass the entire benefit to the customer as a discount, you have used a scarce resource, your labor, to subsidize demand you were already turning away. Triage the subsidized flood. More work you cannot serve means more choosing. Decline the high-hour, low-margin subsidized jobs first and keep the ones that pay best per craftsperson-hour. A grant-driven boom is the worst time to say yes to everything, because everything is now more than you can do. Protect your crew before the poachers reach them. The same subsidy funding your rivals' wage bids is aimed at your people. The counter is not only money. It is the schedule, the named growth path, and the ownership of a book of work that a churning competitor cannot offer. The retention levers a well-funded rival cannot copy are covered elsewhere in this program, and in a subsidy boom they matter more, not less.
Section 3
The reframe
A renovation grant is a demand instrument sold as a gift to the trades. It manufactures orders. It does not manufacture craftspeople. In a market at its labor floor, that combination inflates your book, your wage bill, and your declined work simultaneously, and the firms that mistake the boom for pure upside end up busiest right before they burn out or get out-bid for their own crew.
Section 4
The fitness test
Look at the last ten subsidized jobs you quoted. Did you hold or raise your rate because the grant softened the customer's price sensitivity, or did you compete those jobs down on price as if labor were plentiful? If you discounted into a subsidized, labor-short boom, you handed away the one lever the policy actually gave you. The grant is not there to make your work cheaper. It is there, whether the state intended it or not, to let you price your scarcity while someone else covers the customer's bill.