1. The performance certificate: what triggers the obligations
The energy performance certificate is the central instrument of French retrofit policy. It rates dwellings from A, very efficient, to G, very wasteful, on two criteria: primary energy consumption in kWh/m² a year, and carbon emissions in kgCO₂/m² a year. The rating awarded is the worse of the two.
Since 2021 the certificate is legally binding, and its findings engage the assessor's liability. Since 2022 the very worst dwellings, above 450 kWh/m² a year, cannot be let. The bans extend progressively: G from 2025, F from 2028, E from 2034. Those dates create a de facto obligation for millions of landlords, and a mass demand for energy retrofit that translates directly into work for architects and economists.
ℹ The rating thresholds and what they mean for a budget A dwelling rated G, above 330 kWh/m² a year: letting has been prohibited since 2025 and retrofit is urgent for landlords. The budget needed to reach at least a D rating is 150 to 350 €/m² depending on the building. A dwelling rated F, 231 to 330 kWh/m² a year: letting is prohibited from 2028, leaving three years to plan and deliver. The budget to reach D is 100 to 250 €/m². A dwelling rated E, 181 to 230 kWh/m² a year: letting is prohibited from 2034, which leaves enough time to plan a whole-building retrofit and optimise the grants.
2. The requirements in refurbishment, trade by trade
The environmental regulations apply to new build. In refurbishment the obligations work differently: they are triggered work by work, with a minimum performance requirement for each. The economist has to know those thresholds in order to size the items correctly in the priced bill, and to warn the client when the initial specification falls below the regulatory minimum.
| Work | Trigger | Performance requirement | Estimated extra cost | Grants available |
|---|---|---|---|---|
| Replacing external windows | Replacing or forming an opening | U-value of 1,3 W/m²K or better; single glazing prohibited | + 15–25 % over a standard window | Energy certificates plus the retrofit grant |
| Insulating the roof or roof space | More than 5 m² treated | Thermal resistance of 7 m²K/W in a cold roof, 6 on a flat roof | + 8–15 % over standard insulation | Energy certificates plus the retrofit grant |
| Insulating the walls, inside or outside | More than 5 m² treated | Thermal resistance of 3,7 m²K/W externally, 3,0 internally | + 10–20 % over basic insulation | Certificates, retrofit grant, interest-free loan |
| Insulating the ground floor | More than 5 m² treated | Thermal resistance of 3 m²K/W | + 5–12 % | Certificates plus the retrofit grant |
| Replacing the heating appliance | Replacing a boiler | A gas boiler is prohibited where a heat network connection is possible; a heat pump is preferred | Varies with the system | Retrofit grant, generous for heat pumps |
| Ventilation | Replacing or installing ventilation | Basic extract ventilation prohibited in new build, tolerated in refurbishment subject to conditions | + 20–40 % over basic extract | Certificates, by system |
| Whole-building retrofit | At least two energy measures | Energy improvement of at least 35 %, with before and after certificates where a grant is claimed | The full budget, 400–1 200 €/m² by ambition | The enhanced retrofit grant plus a 50 000 € interest-free loan |
The whole-building retrofit, at least two measures together with a 35 % improvement, is the only category that opens the most generous grant, worth up to 70 % of the cost for the lowest-income households. It is also the scenario that demands the most coordination between packages, and where the economist adds the most value.
3. The grants available
The retrofit grant landscape changes frequently, and the figures below are orders of magnitude. The rates are revised annually and have to be checked on the official sites before any commitment.
| Grant | Administered by | Indicative amount | Main conditions | Combines with |
|---|---|---|---|---|
| Retrofit grant, single measure | The national housing agency | 1 500 – 5 000 € per measure by income | One eligible measure, an accredited contractor, a dwelling over 15 years old | Certificates, interest-free loan |
| Retrofit grant, whole-building | The national housing agency | Up to 70 % of the cost for the lowest incomes, 20 % for the highest | An improvement of at least two rating bands, a project manager, at least two measures | 50 000 € interest-free loan, certificates |
| Retrofit grant, apartment blocks | The national housing agency | Up to 25 €/m² of habitable area, capped | An improvement of at least 35 %, a block at least 75 % residential | Certificates, collective interest-free loan |
| Energy saving certificates | Energy suppliers | 500 – 6 000 € by measure and climate zone | An accredited contractor, certified equipment, an applicable scheme | Retrofit grant, interest-free loan |
| Individual interest-free retrofit loan | Partner banks | Up to 30 000 €, 50 000 € for a whole-building retrofit | No income condition, a dwelling over two years old, at least one measure | Retrofit grant, certificates |
| Collective interest-free loan | Partner banks | Up to 30 000 € per flat | A vote in general meeting, the association borrowing, at least one measure | Collective retrofit grant, certificates |
| Reduced VAT at 5,5 % | Automatic | 20 % down to 5,5 %, a 15 % saving on the gross | A dwelling over two years old, an accredited contractor, a certificate with the invoice | Every other scheme |
| Means-tested housing agency grant | The national housing agency | 20 – 50 % of the gross cost by income | Lower-income owners, a main residence over 15 years old | Retrofit grant, certificates |
ℹ The order in which the grants have to be claimed The retrofit grant must be applied for BEFORE the works start; approval is a condition of receiving it, and works begun before the application are ineligible. The energy certificates are negotiated BEFORE the works with an obligated party, an energy supplier or a broker, and can be included in the accredited contractor's quotation as a rebate. The interest-free loan is applied for at the bank before or during the works, and can fund the balance remaining after the grants. The reduced VAT rate is applied automatically by the accredited contractor on the invoice, with no prior step at all.
4. A worked example: a 90 m² dwelling from rating E to rating B
The table below sets out a complete energy retrofit budget on a 90 m² dwelling currently rated E, aiming at a B rating after the works. It carries the net cost, the reduced VAT, the retrofit grant and the certificates, and the balance the owner actually pays.
| Item | Net cost | VAT at 5,5 % | Gross cost | Retrofit grant | Certificates | Balance | Rating gain |
|---|---|---|---|---|---|---|---|
| External insulation, 180 m² of façade | 16 200 € | 891 € | 17 091 € | 4 500 € | 2 000 € | 10 591 € | One band |
| Roof space insulation, 90 m² | 3 600 € | 198 € | 3 798 € | 1 500 € | 600 € | 1 698 € | Half a band |
| Air-to-water heat pump | 9 500 € | 523 € | 10 023 € | 5 000 € | 1 200 € | 3 823 € | One and a half bands |
| Heat recovery ventilation | 3 200 € | 176 € | 3 376 € | 500 € | 400 € | 2 476 € | Comfort and air quality |
| External windows, 12 units | 12 000 € | 660 € | 12 660 € | 2 400 € | 800 € | 9 460 € | Half a band |
| TOTAL | 44 500 € | 2 448 € | 46 948 € | 13 900 € | 5 000 € | 28 048 € | E to B estimated |
| Interest-free loan, if taken | – 20 000 € financed | ||||||
| Net balance after the loan | 8 048 € to fund |
The table makes a point that is widely misunderstood: a net balance of 8 048 € after the loan, on a gross budget of 46 948 €, is a reduction of 83 % in the immediate financial burden. Over fifteen years of repayment at zero interest, the monthly instalment is around 111 €, below the energy saving the works generate, estimated at 120 to 180 € a month on a gas-heated dwelling rated E.
5. The reduced VAT rate: conditions and impact
The reduced VAT rate of 5,5 % on energy retrofit works is the easiest support of all to obtain. It is automatic, requires no prior step, and applies provided the contractor is accredited and the dwelling is over two years old. Its impact on the gross cost is significant: an invoice of 10 000 € net costs 10 550 € gross at 5,5 % against 12 000 € at 20 %, a saving of 1 450 € on that item alone.
The economist should present retrofit budgets showing net, VAT at 5,5 % and gross separately, rather than applying 20 % across the board. The difference is substantial on larger budgets and is a key piece of information for the client's investment decision.
6. The economist's role in the grant strategy
The economist is not a financial adviser, but is the professional who can bring the cost of the works together with the grants available to produce the real net cost of the project. That synthesis is what most refurbishment proposals put in front of clients are missing.
Produce the budget in two columns: gross cost and net cost after grants. That is the presentation that lets the client take an informed decision.
Identify the eligibility conditions: taxable income, age of the dwelling, accreditation of the contractor, the initial rating. These conditions govern the amount of grant and have to be checked before the tender.
Flag that grants must be claimed first: the retrofit grant has to be applied for before the works start, and the economist should show that lead time in the project programme.
Reflect the grants in the tender comparison: at tender assessment, the net cost after grants can change the ranking where contractors offer different levels of performance.
In summary
The performance certificate rates dwellings from A to G, and letting the worst is prohibited: G since 2025, F from 2028, E from 2034. The requirements in refurbishment are triggered work by work with minimum performance levels, a U-value of 1,3 for windows, a thermal resistance of 3,7 for external insulation. A whole-building retrofit, at least two measures with a 35 % improvement, opens the most generous support. The landscape covers the retrofit grant in its single-measure, whole-building and apartment-block forms, the energy saving certificates, the individual and collective interest-free loans, and the automatic reduced VAT rate. On the 90 m² example moving from E to B, the net balance after the loan is 8 048 € on a gross 46 948 €, an effective 83 % of support. The economist should present budgets both gross and net; that synthesis is what most proposals lack.
The nature of the figures quoted
The percentages and amounts quoted on this page are orders of magnitude for framing, not measurements. They illustrate mechanisms and proportions, and they substitute neither for a tender exercise nor for an estimate prepared on drawings.
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Sources: the BT construction cost indices published monthly by INSEE on its 2010 base, used to update the figures · construction cost statistics from SDES, the statistical service of the ministry responsible for construction · regulatory texts published in the Journal officiel and consolidated on Légifrance for the requirements cited.