The project is an economic evaluation of MaPrimeRénov’ (MPR), the main scheme providing direct financial support for energy efficiency in residential properties in France (approximately €2–2.6 billion per year since 2020). The research question on which the team ultimately focused is the impact of the scheme on renovation prices: when firms in the sector exercise market power, how is the benefit of a means-tested subsidy shared between households and firms, and how does imperfect competition distort the efficiency-equity trade-off embedded in the subsidy scale? The analysis is based on the 2020 reform, which replaced the CITE — a flat-rate tax credit — with income-contingent MPR lump sums, by exploiting the resulting longitudinal and cross-sectional variations in generosity. The main findings are as follows: the renovation market exhibits concentration, market power and rationing; the levels of MPR support, revealed during price negotiations, provide firms with information on household income and enable them to discriminate by price between income categories, each of which becomes a distinct sub-market; this results in incidence rates exceeding 100 per cent, as firms raise prices and intensify rationing amongst well-off, lightly subsidised households. The main finding is that means-tested targeting, in a context of market power, amplifies the redistributive effect of the policy beyond that intended by the scale — prices rose overall after 2020, partly due to increased generosity, but also due to stricter rationing among well-off households, who were over-represented among beneficiaries prior to the reform — a finding that the team supports using a simple theoretical model in which market concentration specifically gives rise to this phenomenon.
Evaluation of the Ma Prime Rénov’ scheme
Project Status
Ongoing
