The Current Energy Performance Certificate is Hindering France’s Electrification Efforts

Executive Summary

In this note, we show that Energy Performance Certificates (EPCs) effectively assess electricity-powered homes on a different scale from other dwellings. We identify that this double standard continues to penalize electricity despite recent regulatory changes. This persistent bias against electricity runs counter to France’s ambitious electrification objectives announced by the government in spring 2026.

A Two-Tier Regulatory Framework

Introduced in 2006, the Energy Performance Certificate (EPC) is a mandatory and legally binding assessment required when selling or renting a residential property in France. It has become a cornerstone of French energy policy, underpinning measures such as the gradual ban on renting energy-inefficient homes rated F or G and eligibility criteria for renovation subsidies.

The rating assigned to a dwelling is based on two indicators: its estimated primary energy consumption and its theoretical greenhouse gas (GHG) emissions. Each criterion receives a grade from A to G, and the final EPC label corresponds to the lower of the two ratings.

Because France benefits from a particularly low-carbon electricity mix, homes that rely primarily on electricity generally receive an excellent GHG rating (A or B). However, they are heavily penalized under the energy consumption criterion, as the electricity consumption used in EPC calculations (“primary energy”) is set at 1.9 times the dwelling’s actual electricity use (“final energy”).

This primary energy conversion factor of 1.9 is intended to reflect transmission losses and the imperfect efficiency of thermal power plants, yet it ignores the environmental impact of different energy sources. For all other energy sources, the conversion factor is set at 1.

As a result, the EPC rating of electrically heated homes is determined primarily by their energy consumption score, whereas the ratings of other dwellings are largely driven by their GHG emissions score.

This double standard creates an asymmetrical system that disadvantages electricity. Consequently, some homes are classified as “energy sieves” despite having insulation performance identical to that of homes that avoid such classification, simply because they use electricity as their primary energy source. 

The choice of conversion factor is central to the emergence of this EPC double standard.

Originally set at 2.58 based on the average efficiency of French power plants, the factor was subsequently reduced to 2.3 and then to 1.9 on January 1, 2026, with the stated objective of improving the EPC ratings of electrically heated homes.

The current factor corresponds to the default value established under European legislation, which is based on the average energy mix across the European Union. However, European rules also allow Member States to adjust the conversion factor provided that objective justifications are supplied.

Consistent with European and French climate objectives, this flexibility should make it possible to account for the significantly lower GHG emissions associated with French electricity production compared with many neighboring countries. Given the very low carbon intensity of France’s electricity generation—more than 90% of which comes from nuclear and renewable energy sources—the social cost associated with the relatively low efficiency of power generation is minimal and does not justify such a substantial penalty for electricity-based heating. 

Using data from ADEME, we show that the recent retroactive reduction of the conversion factor to 1.9 has mitigated the disadvantage faced by electrically heated homes, but it still fails to reflect their actual energy performance and low GHG emissions.

This imbalance, which comparatively favors fossil fuels, can also be observed geographically. Homes that rely primarily on electricity are more common in suburban and rural areas, leading to an unusually high concentration of properties classified as energy sieves in these territories.

Our analysis further shows that EPCs affected by the conversion factor are more likely to have been manipulated in order to improve their energy rating.

As has been widely discussed, improving the reliability of EPC assessments through increased monitoring and verification is undoubtedly necessary. However, our results suggest that eliminating the double standard and ending the penalty imposed on electricity would be a less costly and more socially desirable way to reduce incentives for manipulation. 

A straightforward solution would be to rely on a single criterion: greenhouse gas emissions, which most accurately reflect the externalities associated with building energy consumption.

Such a reform would, however, require changes to European regulations.

By contrast, nothing appears to prevent France from adopting a significantly lower primary energy conversion factor than the current coefficient.

Eliminating this double standard would represent a low-cost tool for decarbonization and electrification. In addition to improving the targeting of renovation subsidies and rental restrictions toward genuinely inefficient homes, it would greatly simplify EPC assessments and make them more transparent.

About the Authors

Eric Mengus is an Associate Professor of Economics at HEC Paris. He teaches Business Macroeconomics in the third year of the Bachelor’s program (in French), Macroeconomics of Large Public Debts in the Master in Economics & Finance (in English), and International Economics in the joint Master in Economics with ENSAE and École Polytechnique (in English).

Alexandre Chapusot is a student in the Master in Management at HEC Paris.