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The zero-rated eco-loan scheme to encourage renewable energy (ECO-PTZ)
Published on 12 February 2021
France
This is the good practice's implementation level. It can be national, regional or local.
About this good practice
The zero-rated eco-loan scheme (eco-prêt à taux zero or ECO-PTZ in French) was introduced by the “Finance law 2009” (loi de finance 2009) to allow landlords (occupiers or lessors) to get a loan to finance energy refurbishment works (insulation, heating or water heating using renewable energies) for their main residence, built more than 2 years ago without any income condition.
The maximum amount of this loan is between €7,000 and €30,000, refundable for 15 years following works.
It is granted by banks which have concluded specific agreements with the French State under conditions fixed by the General Taxes Code. This scheme has been subjected to different evolutions in 2015 and 2019 to improve the coherence between the different energy saving aid schemes.
The work must meet performance criteria and must imperatively be carried out by a company with a recognized quality sign guaranteeing the environment (RGE).
Since 2014, a collective ECO-PTZ allows the co-owners' associations to benefit from it to finance works of collective interest carried out on the private parts (energy saving works or reduction of greenhouse gas emissions) and on the common parts and equipment of the building. Only co-owners of housing units used as a principal residence can participate in the collective ECO-PTZ.
The maximum amount of this loan is between €7,000 and €30,000, refundable for 15 years following works.
It is granted by banks which have concluded specific agreements with the French State under conditions fixed by the General Taxes Code. This scheme has been subjected to different evolutions in 2015 and 2019 to improve the coherence between the different energy saving aid schemes.
The work must meet performance criteria and must imperatively be carried out by a company with a recognized quality sign guaranteeing the environment (RGE).
Since 2014, a collective ECO-PTZ allows the co-owners' associations to benefit from it to finance works of collective interest carried out on the private parts (energy saving works or reduction of greenhouse gas emissions) and on the common parts and equipment of the building. Only co-owners of housing units used as a principal residence can participate in the collective ECO-PTZ.
Resources needed
In the frame of granting an eco-PTZ, the absence of interest on the amount of the loan takes the form of a tax credit from the State paid to the crediting institution distributing the loan (bank), corresponding to the difference with the market rate.
For 2019, the tax expense was 39 million€.
For 2019, the tax expense was 39 million€.
Evidence of success
-About 20 banks have signed an agreement with the State and distribute the ECO-PTZ.
-35,574 loans were granted in 2019, for an average amount of €13,342.
-55% of the files concern households with incomes below the 1st to 8th decile, i.e. less than €36,360/year.
-The use of renewable energies concerns 10,330 files for a total amount of associated works of more than 85 M€.
-Works financed by the ECO-PTZ over the 2009-2010 period has resulted in total savings of around 2.8 MtCO2 and 14.9 TWh.
-35,574 loans were granted in 2019, for an average amount of €13,342.
-55% of the files concern households with incomes below the 1st to 8th decile, i.e. less than €36,360/year.
-The use of renewable energies concerns 10,330 files for a total amount of associated works of more than 85 M€.
-Works financed by the ECO-PTZ over the 2009-2010 period has resulted in total savings of around 2.8 MtCO2 and 14.9 TWh.
Potential for learning or transfer
The ECO-PTZ makes it possible to promote complete work packages and to embark on renewable energy solutions at the same time as energy efficiency in global renovations. For modest, owner-occupied households, this makes it possible to cover the advance of the investment over a long enough period to make it profitable.
For the State, covering the expenditure via a tax credit granted to commercial banks, which offers the ECO-PTZ, allows the investment to be deferred and costs much less than a subsidy system because only the interest is covered.
One can also imagine this type of mechanism at a more local level between a community and a bank through a partnership.
Fuel poverty is a phenomenon that affects all European countries and the ECO-PTZ is a strategy that limits energy expenses and promotes the use of renewable energy for all citizens, especially the most vulnerable, is essential.
Therefore, the transfer potential of this good practice is very high.
For the State, covering the expenditure via a tax credit granted to commercial banks, which offers the ECO-PTZ, allows the investment to be deferred and costs much less than a subsidy system because only the interest is covered.
One can also imagine this type of mechanism at a more local level between a community and a bank through a partnership.
Fuel poverty is a phenomenon that affects all European countries and the ECO-PTZ is a strategy that limits energy expenses and promotes the use of renewable energy for all citizens, especially the most vulnerable, is essential.
Therefore, the transfer potential of this good practice is very high.
Further information
Website
Good practice owner
You can contact the good practice owner below for more detailed information.
Organisation
Etat Francais
France
Ile-de-France
Contact
project manager