Picardie Pass Rénovation, the technical and financial instrument designed
by the regional Public Service for Energy Efficiency.
The problem addressed is that private period property in the Region of Picardie (France) accounts for 15% of its greenhouse gas emissions. To rise to the challenge of energy renewal, the Region of Picardie launched a pilot project together with the Public Service of Energy Efficiency (PSEE): they named it Picardie Pass Rénovation.
This practice is a third-party-financing mechanism. Founded on an innovative economic model, through a dedicated public fund: SPEE advances the amount allocated to renovation works (for an average of 42.000€) and beneficiaries will repay this advance through financial savings generated on their energy bill.
Breaking with the public subsidy, the SPEE focusses on a virtuous, self-regulated economic model to help reduce significantly energy consumption in residential buildings and bring about local economic expansion.
The measures mainly consist of improving the insulation of the buildings, as well as renovation of the buildings’ heat generation and distribution systems, including ventilation systems. The use of renewable energy may also be included in the measures.
The owner will repay an amount less than or equal to the post-renovation energy savings (on average 56% of savings, for a posted target of 50 to 75%-reduced final consumption). This advance on energy savings is granted at a rate of 2%, given over a period of 15 years, for equipment, and up to 25 years for building insulation works.
The total amount of resources is 59 million euros. From here: Picardie Region will finance 8M € to cover the initial renovation projects; ELENA-ADEME-FEDER subsidies will finance 4M € to cover overheads and Caisse des Dépôts et Consignations (European Investment Bank) will loan 47M €.
Evidence of success
The main goals to be achieved are the renovation of 2000 residential homes over a 3 year period with 50 to 75% energy savings and the creation of 33 direct jobs and 650 indirect jobs in the construction sector; and over the next 5 years, 10,000 renovations per year and the creation of 3.500 jobs in the construction sector.
The results achieved by 2016 are:
- 1085 contracts (20M €)
- 112 ongoing projects
- 1560 thermal diagnoses
- 3000 contacts treated for the region
Potential for learning or transfer
Picardie is a practice rising high interest as it provides flexible funding to private end users, by combining public regional ERDF, with IEB and private funds. The flexibility allows the owners to renovate the residential houses with no upfront payments and long-term paybacks.
As the renovation achieves 50 to 75% energy savings per year, this type of loan is advantageous for all parties: the investors have low risk and the beneficiaries will repay the loan with the savings originated in their bill due to the energy savings.
Picardie Pass Renovation has been included in several innovative financing in energy efficiency reports amongst the European best practices.
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