By 2030, a commercial building subject to the Décret tertiaire (France's tertiary decree on energy savings in commercial buildings) must have cut its energy consumption by 40% compared with its reference year[1][1]RegulationLégifrance, “Article L174-1 of the French Construction and Housing Code and Decree No. 2019-771 of 23 July 2019”, obligations to reduce final energy consumption in commercial buildings, annual reporting on OPERAT (order of 10 April 2020)See in sources ↓. The question is who pockets the saving. The owner funded the works. The tenant pays the bill. The operator holds the setpoints. Shared energy savings are settled in the lease or the contract, never in the decree. We compare five allocation models, then the clauses that keep your energy savings verifiable throughout the transition of the portfolio.
What shared energy savings cover and who can claim a share
How is an energy saving shared?
Sharing energy savings means splitting the saving achieved on a site between several parties. It rests on four building blocks. The first is a baseline, that is, the reference consumption adjusted for weather and use. Then come the saving observed against it, an allocation key and a term.
Three frameworks coexist. Residential housing has a statutory rule: after a renovation, the landlord can ask the tenant for a contribution, subject to conditions. Shared energy production follows another logic. Commercial buildings, for their part, rely on the contract: lease, operation and maintenance contract or energy performance contract. That is where energy savings must be allocated, clause by clause.
The trap fits in one sentence: the sharing is negotiated before the measurement, yet everything hinges on the measurement.
Tenant contribution: the framework specific to residential housing
In residential housing, Article 23-1 of the French Act of 6 July 1989 on residential leases[2][2]RegulationLégifrance, “Law No. 89-462 of 6 July 1989, Article 23-1”, tenant contribution to the sharing of savings on charges: conditions, cap at half of the estimated saving, fixed and non-revisable amount, maximum term of fifteen yearsSee in sources ↓ governs a separate scheme. After energy-saving works (insulation, replacement of windows or a boiler), the landlord can ask for a tenant contribution under the conditions set by decree[3][3]RegulationLégifrance, “Decree No. 2009-1439 of 23 November 2009”, prior consultation, statement on the rent receipt and method for calculating the estimated saving (private landlord)See in sources ↓. It is added to the rent on a separate line. The landlord can also draw on MaPrimeRénov' (the French state renovation grant) to fund the renovation. This framework does not apply to commercial leases. Conditions, calculation and supporting documents are covered in the FAQ.
Did you know? The tenant contribution is a fixed, non-revisable amount[2][2]RegulationLégifrance, “Law No. 89-462 of 6 July 1989, Article 23-1”, tenant contribution to the sharing of savings on charges: conditions, cap at half of the estimated saving, fixed and non-revisable amount, maximum term of fifteen yearsSee in sources ↓. Even if the actual saving exceeds the estimate, the line added to the rent does not change for the whole payment period.
Collective self-consumption and value sharing: when a production is shared
Collective self-consumption[4][4]RegulationLégifrance, “Ordinance No. 2016-1019 of 27 July 2016 on electricity self-consumption”, ratified by Law No. 2017-227 of 24 February 2017, Articles L315-1 et seq. of the French Energy CodeSee in sources ↓ organizes the sharing of energy. Nearby consumers split the kWh of a local production, often solar photovoltaic, within a sharing group. An organizing legal entity runs the scheme[4][4]RegulationLégifrance, “Ordinance No. 2016-1019 of 27 July 2016 on electricity self-consumption”, ratified by Law No. 2017-227 of 24 February 2017, Articles L315-1 et seq. of the French Energy CodeSee in sources ↓. Community projects add two benefits: citizens' savings invested in the renewable installation and a local electricity price.
The APER Act (French law on accelerating renewable energy production)[5][5]RegulationLégifrance, “Law No. 2023-175 of 10 March 2023 on accelerating the production of renewable energy (APER)”, Article 93, contribution to territorial value sharingSee in sources ↓ provides for its part a sharing of the value of renewable projects with the local authorities that host them. In all these cases, a produced kWh is shared. Commercial buildings, on the other hand, argue over a measured saving.
What mechanisms exist for allocating energy savings in commercial buildings?
In an office building, five mechanisms organize the allocation of energy savings. The first is the environmental annex (annexe environnementale, a French green lease annex), mandatory for office or retail leases over 2,000 m²[6][6]RegulationLégifrance, “Article L125-9 of the French Environment Code”, environmental annex to office and retail leasesSee in sources ↓. It sets up an exchange of information and an action program between the owner and the tenant company. Its content prepares the allocation of the Décret tertiaire obligations, which are the second mechanism. The operation and maintenance contract can include an incentive scheme in a P1 P2 P3 contract (the French energy supply, maintenance and full-guarantee lots), the EPC a quantified guarantee and the lease amendment a site-specific key. Each mechanism designates a party that invests, one that occupies and one that guarantees.
The owner funds the works: pay back before sharing
When the owner funds the renovation, they first recover their investment. Renovating a heat production plant or paying for improved controls costs money before it pays off. On small commercial sites, the payback period can lengthen considerably. The rule fits in four words: pay back before sharing. Promising a rebate before payback amounts to making the investor pay twice, for a single building as for a whole portfolio.
The tenant drives the use: an obligation shared by the Décret tertiaire
The Décret tertiaire[1][1]RegulationLégifrance, “Article L174-1 of the French Construction and Housing Code and Decree No. 2019-771 of 23 July 2019”, obligations to reduce final energy consumption in commercial buildings, annual reporting on OPERAT (order of 10 April 2020)See in sources ↓ requires buildings of 1,000 m² and more to cut consumption by 40% in 2030, 50% in 2040 and 60% in 2050. The obligation is shared between owner and tenant according to their responsibilities. Consumption data is reported every year on OPERAT (the French government platform for reporting consumption under the Décret tertiaire)[1][1]RegulationLégifrance, “Article L174-1 of the French Construction and Housing Code and Decree No. 2019-771 of 23 July 2019”, obligations to reduce final energy consumption in commercial buildings, annual reporting on OPERAT (order of 10 April 2020)See in sources ↓. This part of the ecological transition targets final energy, not greenhouse gases directly. The text allocates effort and actions. It does not allocate the gain.
The decree shares the obligation. The contract shares the money.
The EPC contractor guarantees the result: its share pays for a risk
In an EPC (energy performance contract, called CPE in France), the contractor commits to a consumption level: this is the performance guarantee. Its share of the gain pays for this guarantee and its exposure to the measurement, provided the result is verified. An operator on an incentive scheme without a guarantee also receives a share of the gain. Yet it does not bear the loss. The two forms of remuneration look alike. The risk taken, much less so.
Shared-savings models in EPCs
Fixed sharing: a lump sum disconnected from the result
In the simplest form of EPC shared savings, each party receives a lump sum set at signing, whatever the actual gain. Whoever pays the lump sum bears all the risk: if the saving melts away, their contribution is still due. This is the logic of the tenant contribution in residential housing, frozen on the rent[2][2]RegulationLégifrance, “Law No. 89-462 of 6 July 1989, Article 23-1”, tenant contribution to the sharing of savings on charges: conditions, cap at half of the estimated saving, fixed and non-revisable amount, maximum term of fifteen yearsSee in sources ↓.
Proportional sharing: a key applied to the verified saving
Here, a percentage allocation key applies to the energy savings verified over the period. Every kWh of energy savings feeds both parties' shares. The model looks fair. Yet it is the most exposed to measurement: a baseline shifted by a few points shifts the shared saving in the same proportion. The calculation section comes back to this.
Tiered sharing: a key that changes with performance
This form of EPC incentive sets trigger thresholds. Below the first one, nothing is shared. Beyond it, the key rises or falls by bracket of energy savings. The incentive effect is real, and so is the trap. A contractor two points away from a tier has an interest in arguing over the adjustment condition rather than its energy performance.
Cap and floor: bounding what each party receives
A robust shared-savings clause bounds the payments. The cap limits what the contractor receives when a mild winter inflates the apparent energy savings. The floor guarantees the building owner a minimum contribution from the contractor. The shared saving thus stays within a readable corridor, despite weather or occupancy. The slider in the next section shows it.
Bonus-malus: the EPC incentive and its counterpart
The EPC bonus-malus makes the contract symmetric. Above the guarantee, the contractor receives a bonus on the additional energy savings. Below it, the contractor compensates the building owner for the shortfall, valued at the contractual energy price. Its contribution then changes sign. Without this malus, the bonus commits no one. The details fall under penalties, the other side of the same contract.
Five models applied to the same gain: the figures compared
| Model | Mechanism | Calculation example | Weather risk borne by | What is negotiated | Basis |
|---|---|---|---|---|---|
| Fixed Frozen |
Lump sum set at signing, whatever the actual gain. | Contractor: €30,000 · building owner: €70,000. If the saving melts away, the lump sum is still due. | Whoever pays the lump sum, here the building owner. | Amount of the lump sum, term. | Estimated at signing. Nobody recounts it afterwards. |
| Proportional Linear |
Percentage key applied to the verified saving for the period. | 50/50 key: €50,000 for each party. | Both parties, in proportion to the key. A mild winter inflates both shares. | Key, calculation frequency. | Verified. A shifted baseline shifts the sharing in the same proportion. |
| Tiered By thresholds |
Nothing below a threshold, then a key that changes by bracket. | Nothing below €20,000, 30% up to €60,000, 50% above. Contractor: €32,000 · building owner: €68,000. | Both, with a threshold effect: a few points of heating degree days are enough to change bracket. | Thresholds, rate per bracket, adjustment conditions. | Verified, provided the thresholds apply to the corrected saving. |
| Cap and floor Bounded |
Proportional key with bounds: cap for the contractor, guaranteed floor for the building owner. | 50% key capped at €40,000. Contractor: €40,000 · building owner: €60,000. | Bounded on both sides: the weather-inflated gain stops at the cap. | Level of the cap, level of the floor. | Verified, with a written payment corridor. |
| Bonus-malus Symmetric |
Guaranteed result: bonus above, malus below. | Guarantee at €80,000, 50% bonus on the excess. Contractor: €10,000 · building owner: €90,000. Below the guarantee, the contractor compensates the shortfall. | The contractor, above as well as below its guarantee. | Guarantee level, bonus rate, price used to value the malus. | Verified. The malus only exists if the measurement holds. |
To compare keys, you have to apply them to the same figure. The table therefore starts from a fictitious verified saving of €100,000 over the year, in round values: it is a calculation example, not market practice. It shows three things. It indicates what each model pays each party and who bears the weather risk. It also specifies the basis on which the allocation of energy savings rests.
Look at the “basis” column. From the lump sum to the bonus-malus, each model applies its key to the same starting figure. If that figure comes from BMS data full of gaps or from energy performance that was never verified, even the finest EPC shared-savings scheme allocates an error. The chain below the table is a reminder: whoever logs the data holds the shared energy savings.
Calculating the shareable energy saving when the baseline moves
Estimated, observed or verified saving: three bases for one contract
The same contract can produce three figures. The estimated saving is a declared figure, set by whoever designed the works. The observed saving compares two raw electricity or natural gas bills. The verified gain applies the International Performance Measurement and Verification Protocol (IPMVP): adjusted baseline, documented variables, traceable information. Only the latter separates the energy savings due to operations from what the weather provided. A declared saving should never serve as the basis for a payment.
The baseline: what the contract must freeze at signing
The consumption baseline is set over a 12-month period, chosen outside any exceptional event. The contract lists the adjustment variables: heating degree days (HDD, called DJU in France), occupancy rate, operating hours. Both parties validate this baseline jointly, with raw data in support, before the first calculation. Building a baseline deserves its own chapter. Remember here that an unsigned baseline gets renegotiated at every payment.
What happens to the sharing when the baseline moves?
The slider below simulates a winter milder than the baseline period, from 0 to 20% of HDD. First observe the gap between the apparent saving and the corrected saving. Then look at what each model pays the contractor, on a fictitious site whose operations genuinely save 400 MWh a year.
Mild winter: what the shared saving is really worth
Fictitious commercial site. Its baseline is 4,000 MWh a year, of which 2,400 MWh relate to heating. Operations genuinely save 400 MWh. Energy is valued at €100 per MWh at the contractual price.- Unadjusted baseline
- HDD-adjusted baseline
- Actual consumption
- Shareable gain
- Saving provided by the weather
Winter identical to the baseline: apparent saving and corrected saving coincide.
What the contractor receives under each modelThe milder the winter, the more the apparent saving inflates. No work on the equipment is the cause. The cap limits the damage without removing it. Only the HDD correction tells what the shareable gain is worth, whether the heat comes from a natural gas boiler or a hot water network.
Change in occupancy or use: non-routine adjustments
An extension of floor area, a new tenant or widespread remote working changes the picture. So does a server room added on the third floor. These events shift consumption without saying anything about performance. The contract must name who triggers the recalculation, within what time frame and under what written rule. Without this condition, the allocation of energy savings comes down to the balance of power. Whoever runs the site day to day often wins it.
Real examples: the statutory cap in housing versus the gain measured at Valeo
In residential housing, the tenant contribution after renovation is capped at half of the estimated saving[2][2]RegulationLégifrance, “Law No. 89-462 of 6 July 1989, Article 23-1”, tenant contribution to the sharing of savings on charges: conditions, cap at half of the estimated saving, fixed and non-revisable amount, maximum term of fifteen yearsSee in sources ↓. The basis remains an estimate: nobody checks after the works that the announced gain exists. The grants the landlord draws on, such as MaPrimeRénov', fund the works. They measure nothing.
At Valeo, by contrast, we measured -28.6% on heating and electricity according to the IPMVP protocol[7][7]Field feedbackFoobot, operational feedback, Valeo case study, heating and electricity consumption measured according to the IPMVP protocolSee in sources ↓. This figure is not tied to any sharing clause. It shows the basis that shared energy savings can rest on when the measurement holds: a volume of energy savings that a third party can recount.
Questions to ask before signing a shared-savings clause
Who holds and logs the BMS data?
Trend logging lives in the supervision system and in the controllers, those small industrial computers without a screen. The operator or the integrator usually administers them. Whoever holds this data holds the shared figure. Yet the building owner often signs on the advice of the party the sharing pays, without independent advice or access to the raw information. Make a shared file, hosted on your side, a condition of signing. No access to the data, no sharing.
Were the meters made reliable before the baseline period?
A meter disconnected for three weeks, a sub-meter counted twice, a slow drift nobody notices: every fault is printed into the consumption baseline. The twelve reference months then remain wrong for the whole term of the contract. The energy savings calculated afterwards inherit the error, in one direction or the other. Making the energy meters reliable before freezing the baseline costs less than disputing a payment.
Who verifies the gain and can a third party audit it?
The contract names the verifier explicitly. It cannot be the party that collects. Provide for an audit right by an independent third party, access to raw data and a written dispute period. An energy savings report without this information cannot be verified: it can only be believed. Annex the shared measurement file, updated at each calculation date.
What happens if the operator on an incentive forces equipment on?
An operator paid through an EPC incentive gains from showing a saving, not necessarily from producing it. The classic case is a hot water production put on manual overrides to silence complaints from one floor. It is then forgotten. Energy consumption rises slowly. Energy drift sets in without anyone attributing it. Require a log of manual overrides and a traced corrective action for each one.
What Foobot checks before an energy gain is shared
BMS advisory: making meters reliable and freezing a defensible baseline
Our first step does not touch the sharing. With BMS advisory, we track down disconnections, data gaps, duplicates and invisible drifts on the meters. Operations advisory then removes manual overrides and restores consistent sequences. The site then has a shared file that each party can review. This work has value on its own, even if no sharing contract follows. It is our advice before any negotiation.
Measure the energy saving before sharing it
The choice of model comes last. A proportional key, tiers or a bonus-malus are only worth as much as the basis they apply to. First make the meters reliable. Then freeze a baseline signed by both parties, and designate who verifies. Shared energy savings then become a matter of negotiation rather than belief. In the reverse order, every mild winter reopens the debate and every payment gets disputed. Before signing, have your clause reviewed by someone the sharing does not pay.
negotiate the sharing before signing
Nine questions to settle in writing
Tick the points that appear in black and white in the draft contract.
FAQ - shared energy savings
Which production sources?
In collective self-consumption, solar photovoltaic production dominates, sometimes supplemented by another renewable source. A citizen's savings invested locally and peer-to-peer exchanges fall under the sharing of produced energy. Commercial buildings, for their part, share a measured saving.
Where must the production installation be located?
Ordinance No. 2016-1019 governs collective self-consumption: producers and consumers remain close to each other, within a perimeter set by regulation[4][4]RegulationLégifrance, “Ordinance No. 2016-1019 of 27 July 2016 on electricity self-consumption”, ratified by Law No. 2017-227 of 24 February 2017, Articles L315-1 et seq. of the French Energy CodeSee in sources ↓. A local authority can run the project, from the solar neighborhood to the local energy-sharing group. It has nothing to do with an operational gain.
What are the conditions for a tenant contribution to the sharing of energy savings?
Article 23-1 of Law No. 89-462 allows a tenant contribution after energy-saving works carried out by the landlord in a dwelling[2][2]RegulationLégifrance, “Law No. 89-462 of 6 July 1989, Article 23-1”, tenant contribution to the sharing of savings on charges: conditions, cap at half of the estimated saving, fixed and non-revisable amount, maximum term of fifteen yearsSee in sources ↓. The works must directly benefit the tenant and be justified to them. The dwelling must also reach a class between A and E (on the DPE, the French Energy Performance Certificate)[2][2]RegulationLégifrance, “Law No. 89-462 of 6 July 1989, Article 23-1”, tenant contribution to the sharing of savings on charges: conditions, cap at half of the estimated saving, fixed and non-revisable amount, maximum term of fifteen yearsSee in sources ↓. This framework does not apply to commercial leases.
How is the tenant contribution to the sharing of energy savings calculated?
Article 23-1 of Law No. 89-462 caps the tenant contribution at half of the estimated saving after renovation[2][2]RegulationLégifrance, “Law No. 89-462 of 6 July 1989, Article 23-1”, tenant contribution to the sharing of savings on charges: conditions, cap at half of the estimated saving, fixed and non-revisable amount, maximum term of fifteen yearsSee in sources ↓. This fixed, non-revisable amount is added to the rent for a maximum of 15 years[2][2]RegulationLégifrance, “Law No. 89-462 of 6 July 1989, Article 23-1”, tenant contribution to the sharing of savings on charges: conditions, cap at half of the estimated saving, fixed and non-revisable amount, maximum term of fifteen yearsSee in sources ↓. The basis is either a monthly flat rate depending on the number of rooms (€10, €15 or €20), or a saving estimated with a conventional calculation method (Th-C-E ex or DPE)[3][3]RegulationLégifrance, “Decree No. 2009-1439 of 23 November 2009”, prior consultation, statement on the rent receipt and method for calculating the estimated saving (private landlord)See in sources ↓, never with a measurement.
What supporting documents and checks are required for a tenant contribution to the sharing of energy savings?
The landlord must be able to justify the works carried out and the savings estimate on which the tenant contribution is based[2][2]RegulationLégifrance, “Law No. 89-462 of 6 July 1989, Article 23-1”, tenant contribution to the sharing of savings on charges: conditions, cap at half of the estimated saving, fixed and non-revisable amount, maximum term of fifteen yearsSee in sources ↓. The exact list of documents should be checked in the text in force. In a dwelling, require this information in writing before accepting it.
Sources and references
7 sources.- [1]Légifrance, “Article L174-1 of the French Construction and Housing Code and Decree No. 2019-771 of 23 July 2019”, obligations to reduce final energy consumption in commercial buildings, annual reporting on OPERAT (order of 10 April 2020)↑ 1 2 3
- [2]Légifrance, “Law No. 89-462 of 6 July 1989, Article 23-1”, tenant contribution to the sharing of savings on charges: conditions, cap at half of the estimated saving, fixed and non-revisable amount, maximum term of fifteen years↑ 1 2 3 4 5 6 7 8 9
- [3]Légifrance, “Decree No. 2009-1439 of 23 November 2009”, prior consultation, statement on the rent receipt and method for calculating the estimated saving (private landlord)↑ 1 2
- [4]Légifrance, “Ordinance No. 2016-1019 of 27 July 2016 on electricity self-consumption”, ratified by Law No. 2017-227 of 24 February 2017, Articles L315-1 et seq. of the French Energy Code↑ 1 2 3
Show the other 2: [5] to [6]
- [7]Foobot, operational feedback, Valeo case study, heating and electricity consumption measured according to the IPMVP protocol↑