Out of the red: Energy audit reforms to improve rating for 850,000 properties in France

Plans by the government to modify energy audit calculations will improve the ratings for around 850,000 properties, as they will no longer be classified as ‘energy inefficient’. 

Changes to how the diagnostic de performance énergétique (DPE, or energy audit) is calculated are set to start on January 1, 2026, French prime minister François Bayrou announced yesterday (July 9). 

It will follow a public consultation that will be launched in the coming days and, provided it is successful, a decree updating the system will be signed in September 2025. 

These new calculations will benefit properties with electric heating, which the government believes are unfairly penalised in the current system. 

The changes “will better reflect the reality of French energy production, which is largely decarbonised… and correct an inequality of treatment that has until now penalised homes heated by electricity,” said the prime minister. 

This update will have widespread ramifications, as a DPE audit is now required for all properties before they are sold. Houses that are given a G rating can no longer be rented out unless they are renovated and achieve a higher score. 

An audit is usually required to access state funding for eco-friendly property renovations. 

Beneficial for smaller properties and rentals 

In technical terms, the change will see the electricity conversion coefficient (coefficient de conversion de l’électricité) for properties dropped from 2.3 to 1.9. 

This number is used alongside meter readings and bill payments to calculate how much energy a property uses. In comparison, the gas coefficient is 1, making it more advantageous for DPE ratings.

Most of the 850,000 properties – a significant proportion of the estimated 5.8 million that are energy inefficient – that will see their level increase from ‘G’ or ‘F’ to a higher rating are around 40 m². 

In many cases, these are rental units, and seeing their levels improve will allow them to return to the market. 

‘G’-rated properties were banned from being rented at the start of this year, and ‘F’-rated units will be banned in 2028 (a ban on renting ‘E’ rated properties is set for 2034). 

Once banned, properties can only be rented again if their DPE rating has improved. This is achieved through eco-friendly renovations such as adding insulation, installing eco-friendly windows, or changing heating systems to energy-efficient alternatives.

The law is controversial as it pulled hundreds of thousands of properties off the market during a housing shortage. This also particularly affected younger renters and students, who are more likely to live in smaller spaces. 

Property owners argued that the cost of renovations would outweigh the potential return from rental income, making it more effective to leave them empty rather than rent them out.

However, there are potential issues.

“The downside is that this discourages thermal renovation in these small, electrically heated dwellings, where bills can be complicated for tenants,” said energy expert at Colombus Consulting Nicolas Goldberg to media outlet 20Minutes. 

The change may also impact property renovations, as it will “make it possible to target energy renovation subsidies more effectively at homes heated with fossil fuels,” the government said in its press release.