{"id":72589,"date":"2026-05-07T06:20:17","date_gmt":"2026-05-07T04:20:17","guid":{"rendered":"https:\/\/www.i4ce.org\/?p=72589"},"modified":"2026-05-07T16:20:15","modified_gmt":"2026-05-07T14:20:15","slug":"energy-crisis-changes-public-aid-households-electric-cars-retrofit-homes-2026-climate","status":"publish","type":"post","link":"https:\/\/www.i4ce.org\/en\/energy-crisis-changes-public-aid-households-electric-cars-retrofit-homes-2026-climate\/","title":{"rendered":"Energy crisis, changes in public aid: can households switch to electric cars and retrofit their homes in 2026?"},"content":{"rendered":"

Energy prices, cost of low-carbon equipment, and public aid: how will the evolution of these factors in 2026 impact the ability of middle-income households to invest in the transition? In this article, Sirine Ousaci updates the analyses of the French Observatory of access conditions to the ecological transition for households.<\/strong><\/p>\n

The beginning of 2026 has proven to be economically turbulent. The increase in fossil fuel prices caused by the war in the Middle East has driven up household energy bills. In this context, investments that allow households to free themselves from dependence on fossil fuel -electric vehicles, heat pumps, home insulation- are attracting growing interest and the government recently presented its plan to electrify end-use sectors in order to speed up the transition to electric uses.<\/p>\n

At the same time, public aid programs for energy retrofit and electric mobility have been revised, sometimes involving significant cuts. Finally, while the cost of energy retrofit continues to rise, the trend is beginning to reverse for electric vehicle prices.<\/p>\n

These developments are affecting households\u2019 ability to invest in transition solutions. We have therefore updated the analyses of our French Observatory of access conditions to the ecological transition for households . We have updated the key indicators that allow us to assess the capacity of two households profiles to invest in the transition: the Fields family and the Newtown family, both of whom are middle-income households, own their homes, and are dependent on cars daily.<\/p>\n

Result #1: Under current conditions, buying a used electric car is becoming more advantageous than continuing to drive an old combustion engine car.<\/span><\/h2>\n

At the beginning of 2025, purchasing a used electric car on credit to replace their old combustion engine vehicle would have strained the budget of the Fields household, one of our middle-income household profiles used in our latest study, living in a rural area. Indeed, the fuel savings, which we estimated at 120 euros per month, were insufficient to cover the loan repayments, even considering the down payment obtained from selling their old vehicle. Switching to an electric vehicle would thus have cost this household nearly 60 euros more per month, considering fuel, maintenance, insurance, and the zero-interest eco-loan (\u00e9co-PTZ) repayments (Figure 1).<\/p>\n

Recent changes in energy prices and the price of used electric cars have changed the game: the Fields family can now afford to buy a used electric car, saving around ten euros a month under current conditions. Indeed, with gasoline prices exceeding two euros per liter last March, the energy savings from switching to electric would now amount to more than 140 euros per month. At the same time, the price of a used electric city car has decreased since last year, as have interest rates, thus reducing loan repayments.<\/p>\n

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<\/p>\n

Assumptions:<\/strong> The household drives 16,000 km per year. The investment in an electric car includes the purchase of a fast-charging station. The loan is taken out over a period of 6 years. The price of gasoline used is \u20ac1.77\/L in 2025 and \u20ac2\/L in 2026. In 2026, the household takes a new 1% loan offer from a bank to purchase an electric car. Compared to the values \u200b\u200bpublished in the 2025 Observatory, we have factored in the resale of the old internal combustion engine car for 2,500\u20ac in the electric car purchase scenario.<\/p>\n

<\/div>\n

 <\/p>\n

Result #2: The out-of-pocket cost for deep energy retrofits has increased by 20,000\u20ac in 2026, but this investment still allows households to save money.<\/span><\/h2>\n

Long considered marginal compared to individual upgrades, deep energy retrofits have finally taken off in recent years, reaching 120,000 retrofitted homes by 2025. This is largely due to the 2024 implementation of the MaPrimeR\u00e9nov\u2019 \u00ab Parcours accompagn\u00e9 \u00bb scheme for deep energy retrofit, which was particularly advantageous for households. In 2025, the Fields family, a lower-middle-income household, was estimated to receive over \u20ac40,000 in public aid for the deep energy retrofit of their oil-heated rural home. This left them with only \u20ac21,000 to pay for the investment, a historically low out-of-pocket cost (Figure 2).<\/p>\n

However, the scheme ultimately became a victim of its own success, so much so that by mid-2025, almost all the allocated funds had been exhausted, leading to the closure of the grant application process. After a lukewarm reopening at the end of 2025, the French National Housing Agency (Anah) finally implemented a reduction in the maximum eligible work amounts and the elimination of the \u00ab\u202fsortie de passoire \u00e9nerg\u00e9tique \u00bb (energy efficiency upgrade) bonus for 2026. The result for the Fields family: an increase of over 20,000 euros in their out-of-pocket expenses for retrofitting their home, as the reduction in aid amounts in 2026 more than offset the increase in 2024. The Fields family’s theoretical borrowing capacity is sufficient to finance this out-of-pocket cost with a loan, but their room for maneuver has shrunk, and many other first-time homebuyers do not have sufficient financing capacity.<\/p>\n

FIGURE 2 – EVOLUTION OF THE OUT-OF-POCKET COST FOR THE DEEP ENERGY RETROFIT OF AN OIL-HEATED HOUSE BETWEEN 2023 AND 2026 FOR A LOWER MIDDLE-INCOME HOUSEHOLD<\/span><\/h4>\n

\"\"<\/a><\/p>\n

<\/p>\n

Assumptions:<\/strong> Costs are estimated using the example of a “rural oil-heated house” from a study by the Ministry for Ecological and Inclusive Transition (2020). Their evolution is estimated using the INSEE (French National Institute of Statistics and Economic Studies) residential building maintenance and improvement price index. Aid amounts are calculated for a lower-middle-income household. Note that their income places them in the Anah (National Housing Agency) category of \u201clow-income households\u201d.<\/p>\n

<\/div>\n

 <\/p>\n

Meanwhile, the surge in heating oil prices since last January is increasing the Fields household’s heating bills if they don’t retrofit their home. Deep energy retrofits therefore still allow the household to make significant net savings on their monthly housing budget, in the order of 120 euros, which is a few euros less than in 2025.<\/p>\n

 <\/p>\n

 <\/p>\n

Result #3: Installing a heat pump becomes even more attractive for households in 2026, due to increased aid amounts and rising fossil fuel prices.<\/span><\/h2>\n

While overall aide amounts for deep energy retrofits decreased in 2026, this was not the case for subsidies for heat pump installations. The amount of the \u00ab\u202fCoup de pouce chauffage\u202f\u00bb (a bonus for replacing a heating system with a low-carbon solution), which the Newtown household \u2013 a upper middle-income household- could receive for their gas-heated suburban house, has more than doubled since last year. By combining this aid with the MaPrimeR\u00e9nov’ scheme, the out-of-pocket cost for installing a heat pump fell from 12,000\u20ac to 9,000\u20ac between the beginning of 2025 and 2026.<\/p>\n

Concerning the energy bill, the consequences of the war in the Middle East are also being felt on gas prices in France. The French Energy Regulatory Commission has announced an increase in the benchmark gas price for May, which had previously remained unchanged. The potential savings on the Newtown household’s energy bill will therefore increase if they replace their gas boiler with a heat pump.<\/p>\n

In this new economic context, the installation of a heat pump would ultimately allow the Newtown household to save around 100 euros per month, considering the repayment of an eco-PTZ to finance the purchase of the heat pump, thirty euros more than in 2025, while protecting them from potential future increases in the price of gas.<\/p>\n

FIGURE 3 – MONTHLY BUDGET BEFORE AND AFTER THE INSTALLATION OF A HEAT PUMP IN 2025 AND 2026 FOR AN UPPER MIDDLE-INCOME HOUSEHOLD<\/span><\/h4>\n

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<\/p>\n

Assumptions:<\/strong> The Newtown household finances the investment with 5,500\u20ac from their savings and a 20-year zero-interest eco-loan to cover the remainder. The analyses are based on the benchmark gas selling price for January 2025 and May 2026. The values \u200b\u200bfor 2025 differ slightly from those of the 2025 Observatory due to the change in the electricity primary energy conversion factor starting from January 2026. Note that it would be preferable to insulate the house before installing a heat pump.<\/p>\n

<\/div><\/p>\n

 <\/p>\n

The energy crisis we are currently experiencing may well persist over the long term. The government\u2019s electrification plan is expected to help protect households most exposed to future increases in fossil fuel prices. Among the measures put forward are the continuation of the \u201csocial leasing scheme\u201d (a State-aided car leasing program that allows low- and lower-middle-income households to rent an electric car for a relatively low rent)\u202f and the strengthening of support for certain professions for mobility, as well as the introduction of a heat pump leasing scheme for housing. We will document the impacts of these measures, along with other developments, on different household profiles and on their capacity to invest in the transition in our 2026 edition of the French Observatory of Access Conditions to the Ecological Transition, to be published next September.<\/p>\n","protected":false},"excerpt":{"rendered":"

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