Experimental deployment of Picardie Pass Rénovation

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1 Brussels, 2018/02/21 Experimental deployment of Picardie Pass Rénovation Alice Morcrette, Director

2 Context Description of the project Results Feedbacks, learnings and difficulties General considerations

3 Regional framework Objectives established by the Regional Scheme for Climate, Air and Energy for 2020 and Low Energy Building Renovation of private homes per year.

market exists but stayed at poor level in terms of performance Number and level of renovations done in 2014 in France LOW LEVEL 1 441 000 AVERAGE LEVEL 1 776 000

4 market exists but stayed at poor level in terms of performance Number and level of renovations done in 2014 in France LOW LEVEL AVERAGE LEVEL PERFORMANT LEVEL HIGH PERFORMANCE Total : renovated homes Average cost for renovation works in 2014 Increasing energy performance after works

5 Few figures on the houses stock in Picardy Single homes Houses 2/3 built before 1975

6 Set-up of the Public Service for Energy Efficiency in Picardie to drive the renovation market «Picardie Pass Renovation proposes to people in Picardie to support them all along their project for energy renovation.» Conditions : - the home is in an eligible territory - the renovation works generate 40% of energy savings

7 3 main needs were identified create a new activity «renovation technician» ensure the funding of renovation works by financial savings generated within a long period support organisation of the professional sector of energy renovation, to stimulate creation of consortium of companies proposing an integrated offer

8 Sum of individual investments difficult to valorise Infrastructure investment... Cost individual loans / subsidies M Reduction of CO 2 emissions tco 2 /y -3,1-1,2-2 -3,8-3, t/y Reduction of energy consumtions MWh/y GWh/y

9 Context Description of the project Results Feedbacks, learnings and difficulties General considerations

10 A unique and innovative experimentation in Picardie! Technical support During 4 years On a defined territory For 2000 homes WITH Financial support

11 Financial framework of the pilot phase % of the maximum outstanding of third party financing debt Guarantee fund Funding needs : 54,4 M for about projects (45,4 M for the works) 9,0 M for the service activity (internal staff, renovation technicians, pilot construction sites, operationnal charges, guarantee fund) Hypothesis on the operator resources 8,0 M = initial provision (Picardie Regional Council) 35,5 M = debt (EIB) 3,4 M = PSEE service (1 550 pre-tax / project) 1,8 M = technical assistance ELENA 4,2 M = Valued Energy savings certificates (works + provision) 1,5 M = ERDF / CPER 15% of the debt + covering the working capital requirements Debt owed by households Working capital requirements Equity Refinancing debt

12 Advance of subsidies start of project more rapidly deducted directly from works cost to decrease the loan

during all the phases Project management

13 Upstream via technical support Information, personal advice, energy audit, definition of the work program Quality of the renovation works - Min. energy savings = 40% - Compatible with future improvements A project follow-up during all the phases Project management during the works Consultation and selection of companies through tenders, supervision of the works Quality of the works done Adapted financial proposal After the works, follow-up during 5 years Support for equipment use/maintenance, tracking of energy consumption, eco-coaching Limit rebound effect Limit financial risk

14 A financial support SPEE advances of the whole budget direct payment of the companies SPEE collects the subsidies owners start to reimburse at the end of the works until 25 years low rate (2,5%)

15 39 local authorities 11 with a specific convention Support for local authorities

17 Context Description of the project Results Feedbacks, learnings and difficulties General considerations

Results 05/02/2018 5593 NUMBER OF CONTACTS

18 Results 05/02/ NUMBER OF CONTACTS TREATED 2560 NUMBER OF THERMAL AUDITS 1488 NUMBER OF PLANNED RENOVATIONS including 10 (1074 Condominiums 35 Apartments ) in works

19 Average financial package : subsidies 13% self-financing 17% 1/3 party financing 70% 502 loans ( single homes : 387 / condominiums : 115 ) / 16 M Types Nb of loans Average amount Single homes k Condominiums k No doubtful debts to date

20 Credit scoring method An adapted scoring method that takes into account the future savings! RTL monthly loan payments per pers. /month Green Monthly savings monthly loan payments? YES NO RTL monthly loan payment + savings per pers./month LTV 80% LTV > 80% RTL-monthly loan payment + savings < per pers./month RTL monthly loan payments per pers. /month RTL monthly loan payment + savings per pers./month LTV 80% LTV > 80% Orange Green Green Orange Green Orange RTL-monthly loan payment + savings < per pers./month Red RTL : Rest to Live (ressources - all recurrent financial costs) LTV : Laon To Value

21 Before works 278 kwhep/ m².y 129 kwhep/ m².y After works - 54 % 20% of the projects reached the BBC-Effinergie Renovation* level 70% of the monthly payments covered by the savings *low energy renovation standard

24 Context Description of the project Results Feedbacks, learnings and difficulties General considerations

25 Feedbacks on users

26 The technical support is appreciated especially in case of problems (conflict between owner / architect / building companies ) Learnings Very old building renovation are particularly difficult : Few specialised companies Cost very difficult to estimate Projects are generally longer and more expensive than expected We under-estimate the needs for non-technical support For owners but also for companies (administrative part) Works in occupied sites are difficult to manage Each actor has a precise role and must find and understand his place Owner Picardie Pass Rénovation Architect Companies

27 Difficulties Technical difficulties air tightness (insulation / windows) : new practices are still not usual external insulation interfaces are not always well managed a lot of disagreement about quality of finishing works additional works are frequently needed budget impact Organisational difficulties difficulty to master schedules low direct communication between companies direct communications between company and owners some extra-demands difficult to manage

28 Difficulties Administrative difficulties quotes and invoices not well presented difficulty to recover technical documentations, drawings,... in case of extra works modification of contracts are required management of non declared extra-works

29 Feedbacks from companies

30 Context Description of the project Technical results Financial results Feedbacks, learnings and difficulties General considerations

More general considerations A blurred actors landscape institutions / associations / information desks / professionals different answers can be obtained for same questions A changing regulatory

31 More general considerations A blurred actors landscape institutions / associations / information desks / professionals different answers can be obtained for same questions A changing regulatory environment long renovation projects need stability to be sure the foreseen subsidies and tax credits will be recover Keys for massification are still not found key messages / communication tools / triggers / regulations stimulating the ADOPTION of low-carbon technolgies by home-owners through AWARNENESS and easy ACCESS

32 More general considerations Third Party Financing still needs an access to the guarantee fund for energy renovation today, risk on the debt is taken by the Region only Statistics on financial risks for that specific loans are still needed links with the energy savings & the works quality after works follow-up is a key process to minimize the risk Still no adequate answers from bank Energy savings must be taken into account Long term loans are needed

33 Driving the residential market through financial and technical aid Trust and confidence - Definition of the works «Be ambitious» - Financial solutions - Quality control - Properuse afterretrofitting - Qualifications / Upskilling - Organisation / Clusters

34 Thank you for your attention! Alice MORCRETTE PSEE director Laurent GAYRAL Financial system and market manager Céline WILLIERVAL Communication and marketing manager

39 Insulation not installed in the proper way - Higher density is to be out on the outside - Internal walls were damaged during drilling

40 Tightness around windows

41 Air tightness

42 Insulation thickness

43 Survey conducted in October 2016 with 200 professionals under contract with the SPEE

Picardie Pass Rénovation

NATIONAL ROUNDTABLE FINANCING ENERGY EFFICIENCY IN ROMANIA 11 OCTOBER 2018, BUCHAREST, ROMANIA Picardie Pass Rénovation Alice Morcrette, Director Context Housing stock in Picardy High political impulse