Thermal renovation in France: legislative measures ambitious but inefficient

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The National Discussion on Energy Transition and the two environment conferences in September 2012 and September 2013 were an opportunity for the French government to launch a number of ambitious projects for the years to come, chief of which is the development of energy efficiency, with a target of 500,000 homes renovated every year by 2017. In order to set up the legal framework for the implementation of announced measures and to provide the government with the tools it needs to reach its goals, an energy transition bill – initially supposed to reach the floor of Parliament in the end of 2013 – will be discussed in the spring of 2014. Until then, it can be useful to assess the efficiency of existing thermal renovation measures.

The Grenelle Environment Forum and the previous government

Several legislative and regulatory measures in favour of thermal energy efficiency were adopted between 2008 and 2012. The 2012 Thermal Regulation Act, adopted in the framework of the Grenelle II Bill from 10 July 2010, applies to all new constructions whose building permits were issued after 1 January 2013.  This recent piece of regulation has already been criticized for its inefficiency and lack of ambition, as it only affects new buildings, which represent about 1% of all buildings every year, according to the Ministry of Economic and Financial Affairs.

The zero-rate eco-loan, launched on 1 April 2009, is available for homeowners wishing to undertake heavy energy renovation works; from July 2014 on, it will be subject to ecological requirements. Today, however, this scheme does not actually contribute to financing significant renovation works: according to a report by the Caisse des Dépôts, in 2011 only 628 zero-rate eco-loans out of the 40,755 granted that year had a maturity of more than 10 years.

As for existing buildings, current regulation applies to constructions with a surface area of more than 1,000 square metres and built after 1948; it is also deemed inefficient and poorly enforced.

2013 national discussion on energy transition sets course for energy renovation policy

Following and improving this first series of measures, the new government decided to focus on renovating existing buildings and to resort to financial incentives rather than regulation. Instead of an overhaul of the current regulation on existing buildings, the emphasis is thus being placed on a number of schemes aimed at fostering large-scale energy efficiency investments more effectively than the zero-rate eco-loan, which failed to yield the desired results.

On the occasion of the second environment conference, the government thus announced a package of new steps:

Reduction of VAT on energy efficiency works to 5%; the 2014 draft budget bill set the definitive rate at 5.5%. This signature measure got the most media coverage.

  • Creation of a “national energy renovation guarantee fund” operated by the Caisse des depots; this third-party financing body, similar to German KfW, could also support third-party financing schemes sponsored by local governments.
  • Implementation of a subsidy programme (launched in 2013) targeting low and middle-income households wishing to renovate their homes (from 1,350 to 3,000 euros).
  • Support for crafts training programmes and creation of 2,000 government-subsidized jobs to advise households.
  • Reviewing of the administrative validation procedure for renovation works in order to make it more flexible.
  • Creation of loan guarantee schemes in order to encourage banks to grant more energy renovation loans.

Transposition of EU energy efficiency directive

In addition to national measures, the implementation of the EU energy efficiency directive should help France achieve the energy savings imposed by the EU on energy providers, thanks to the Energy Savings Certificates scheme, as announced by Minister of ecology, energy and sustainable development Philippe Martin at the French Electric Industry Association Symposium in late October 2013. Revenues thus derived could then contribute to the above-mentioned national energy renovation fund.

Transposing the directive should also pave the way for the renovation of public buildings. However, only central government buildings (except for the military) will be affected, while local government buildings will be exempted from this requirement.

While reinforcing thermal efficiency is essential to increasing buildings’ energy efficiency, it is also important to take the behavioural patterns of consumers into account; as Rudy Provoost points out in his book Energy 3.0, buildings are not empty shells and half of their efficiency depends on the behaviours of their inhabitants.

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