Low-Carbon Heating and Energy Efficiency Incentives: France

Overview

Heating is a major source of residential emissions, especially in countries with cold climates. In France, buildings accounted for 19% of residential emissions in 2021; of these, 74% of came from heating interior spaces and water. To tackle this pollution source, France launched MaPrimeRenov. With grants for solutions such as switching from fossil-fuel boilers to heat pumps, upgrading thermal insulation, and energy auditing support, MaPrimeRenov is proving particularly effective at increasing uptake of clean residential heating solutions during property renovations.

The grants vary depending on the type of intervention. They also reflect annual household income and number of occupants and can be combined with France’s energy saving certificates (Certificats d'économie d'énergie, or CEE) to reduce costs further. For example, a family of five in the lowest-income band in 2021 would have been eligible for €8,364 ($9,870, real 2021) in grants for an air-source heat pump installation, which would cover around 60% of an average heat pump installation cost. These bands have allowed the government to more efficiently allocate public spending.

Impact

MaPrimeRenov has helped increase the uptake of lower-carbon heating sources, as well as property renovations intended to boost energy efficiency more broadly. According to the European Heat Pump Association, sales of the technology in France grew 36% in 2021 as MaPrimeRenov was introduced. By the end of the year, heat pumps were the primary heating source in 8% of households, up from 6% in 2020, and uptake of the technology has remained high in subsequent years.

Multiple factors have contributed to MaPrimeRenov’s success. As a grant program, MaPrimeRenov helps lower the barrier of high upfront costs that can deter consumers from installing heat pumps. Since these grants are only available once per house, the policy design incentivizes simultaneous implementation of both energy efficiency and low-carbon heating solutions.

The program also has a simple application procedure, plus subsidized advisory services that can support households through the project design and delivery process. Grants for different income levels and for specific measures all fall under the MaPrimeRenov umbrella, rather than being scattered in different places. This helps improve public awareness and uptake.

Lastly, the yearly budgets are proving to be large enough to stimulate real deployment of energy efficiency and fuel-switching measures. A total budget of €5.5 billion was made available to the program over 2023-24, up 15% from the €4.8 billion available over 2021-22. The program has had a reasonably high subsidy absorption rate, with 88% of the available budget in 2023 getting used.

Opportunity

Numerous countries, including Germany, Italy and Canada, have policies in place to decrease emissions from residential heating. Yet to effectively drive global decarbonization, more markets must consider implementing incentives and energy efficiency measures to drive the uptake of heat pumps. For best results, these measures should be developed in tandem and designed to reinforce one another.

MaPrimeRenov has started showing results in accelerating the decarbonization of France’s housing. The policy could serve as a blueprint for countries that, like France, have high residential heating consumption and relatively old housing stocks.

Source

European Heat Pump Association, French Ministry of Ecological Transition