Budget Constraints in Energy Renovation: Understanding the Long-Term Impacts

Budget Constraints in Energy Renovation: Understanding the Long-Term Impacts

The delay in the 2025 budget has resulted in a freeze on MaPrimeRénov’ aid payments, impacting both households and energy renovation businesses. Housing Minister Valérie Létard highlighted the urgency of budget approval, as unprocessed applications face prolonged payment deadlines. The energy renovation sector expresses concern over this funding halt, potentially discouraging renovation plans and creating a backlog. With ambitious government goals for energy-efficient housing, the situation remains critical as discussions on the budget continue in the Senate.

Impact of the 2025 Budget Delay on MaPrimeRénov’ Aid

One significant consequence of the delayed 2025 budget is the freezing of payments for MaPrimeRénov’ aid, a fact that has largely gone unnoticed until now. Housing Minister Valérie Létard emphasized the urgency of voting on the budget, stating, “As long as it remains unapproved, payment deadlines for MaPrimeRénov’ assistance to individuals will be prolonged for all applications not processed before January 1, 2025.” This situation is detrimental not only to households but also to businesses involved in energy renovation.

According to Bercy, this aid is classified as “a discretionary act,” meaning that it cannot be disbursed during the current transitional period before a new budget is ratified. A circular issued on December 12 by Michel Barnier urged a cautious approach to expenses from January 1, 2025, a principle that applies to the state and its agencies, including the National Housing Agency (Anah), which oversees MaPrimeRénov’ applications.

Concerns from the Energy Renovation Sector

The announcement of this funding freeze has triggered alarm across the energy renovation sector, particularly as the prohibition on landlords re-letting properties classified as G has just come into effect. Although the number of affected applications is currently limited, construction professionals worry about the long-term repercussions. The French Building Federation (FFB) warns that this situation may lead to a wait-and-see mentality, causing households to abandon planned renovations.

In 2023, energy renovation accounted for a significant 30 billion euros in revenue, representing 14% of the total market, according to FFB statistics. Effy, a company that assists households with renovation projects, shares similar concerns and criticizes Anah for its lack of communication, warning that this could foster a hesitant approach among the French regarding their energy renovation endeavors, despite the MaPrimeRénov’ platform remaining operational.

It is still possible for households to submit applications for aid. The challenge now lies in encouraging individuals to continue their submissions, despite the delay in payments. The fear is that ambiguous information may lead many to postpone their renovation plans, potentially creating a bottleneck in processing and hindering overall energy renovation efforts in France.

Victor Bréhéret from Effy stresses the importance of timely submissions, stating, “To prevent any bottleneck, it’s crucial not to delay the request for MaPrimeRénov aid. Once the 2025 finance law is established, these applications will already be prepared for validation and disbursement.”

Since its inception, the MaPrimeRénov’ system has undergone numerous changes, creating confusion among property owners. The complexities and frequent adjustments regarding funding amounts and eligibility have led many to reconsider their renovation plans altogether. Audrey Zermati from Effy notes the difficulty in rectifying a budget that was already on a downward trend.

The French government has set ambitious goals in its National Low-Carbon Strategy (SNBC), aiming to renovate 400,000 individual homes and 200,000 collective housing units each year by 2030. With 4.2 million energy-inefficient homes still in existence as of January 1, 2024, and the construction sector responsible for 23% of national emissions, the stakes are high. Additionally, energy renovation is crucial for alleviating energy poverty and reducing high utility bills for households.

The Senate will resume discussions on the finance bill, including aspects related to MaPrimeRénov’, on Wednesday. However, the final adoption of the budget is not anticipated until February.