A zero-interest rate loan for housing renovation

For my 500th post on this blog, I would like to bring you good news. The decision taken last week within the Grenelle de l’Environnement is a huge leap forward towards sustainability of housing.

Indeed, the French government will launch in April an eco loan of up to 30,000 €  ($37,600) with no interest rate to increase the use of thermal renewable energy sources and of energy conservation.

The energy and environment Minister Jean-Louis Borloo expects heavy renovations to go above 400,000 per year, to be compared to the current 40,000.

As I stated in my Master’s Thesis published in 2006, such a target has to be reached if we want to insulate before 2050 the 20 million “thermal colanders” that need renovation in the country.

Mr. Borloo goes further in stating that each construction built prior to 1990 has to be renovated. This represents 27 million housings, including 15 individual houses.

As the French daily Le Figaro noted:

People willing to benefit from these loans have to choose two or three options among the following:

• Insulation of the roof ;
• Insulation of the walls ;
• Replacement of doors and windows ;
• Installation of a more efficient heating system ;
• Installation of a water heating or housing heating system with renewables.

By choosing two, one can benefit from an eco loan of 20,000 € ($25,000). Choosing three, one can get 30,000€.

To me, the most interesting way would be to choose insulation of the roofs and walls (more than half of the heat losses in housing) and installing a housing system with renewables.

Such a move would indeed enable households heating themselves with oil or natural gas to cut by a factor four or even much more their carbon dioxide emissions.

To Mr. Borloo, such a scheme would allow households to cut by 70 to 80 percent their heating bills.

This represents to me a huge step forward as buildings represent the first energy consumer in France.

Rumored to be a first in Europe, I hope such an initiative will quickly be emulated in many countries as home insulation gets the attention it deserves.

Banks will play a major role in this as they will be legally forced to propose such loans. With all the money they are given nowadays I guess this is the best way they can pay back the Society as a whole.

Households will have from ten to fifteen years to payback these loans. this shouldn’t be much a problem as the savings will be of importance.

And you, what do you think about this ? To me this is the best idea brought by the Grenelle, the second best being the system of feebates for efficient cars.