In a piece of welcome news for French residents, electricity prices are set to decrease in February 2025, despite the end of the government-backed price protection scheme known as the bouclier tarifaire (price shield).
The price reduction is expected to bring relief to many households who have faced rising energy costs in recent years.
The bouclier tarifaire, introduced in 2021 as a response to the energy crisis exacerbated by the COVID-19 pandemic and the war in Ukraine, aimed to protect consumers from dramatic price hikes.
Under the scheme, electricity price increases were limited to just 15 percent annually, with the French government subsidizing approximately 37 percent of household electricity costs.
Over the course of the initiative, which will conclude on February 1, 2025, the French state has spent an estimated €26.4 billion, according to the Commission de régulation de l’énergie (CRE).
Despite the protection offered by the price shield, energy costs continued to rise incrementally. Increases were seen in 2022 (4 percent), 2023 (14 percent), and 2024 (8 percent on average), placing a growing financial burden on many households.
However, following the end of the price shield, French consumers will experience a reduction in electricity prices, with rates set to drop by up to 14 percent.
The expected price decrease is attributed to several factors, including a significant reduction in market electricity prices and an increase in nuclear energy production.
As a result, the cost of electricity per kilowatt-hour (kWh) will fall from its current rate of €0.2516 to €0.215 in February 2025.
For the average French household, which consumes approximately 5,681 kWh annually, this reduction will result in a decrease in their annual electricity bill from €1,429 to €1,220—a significant saving of €209.
While the price shield will no longer apply to individual households, some groups will continue to benefit from state financial aid. Collective housing units and electric vehicle (EV) users will still receive compensation for electricity costs through state support.
Buildings with collective heating systems that are not covered by regulated tariffs can claim financial aid matching the frozen electricity prices of previous years.
In addition, developers of EV charging infrastructure will receive aid to adjust service pricing, which will then be passed on to consumers.
The Agency for Services and Payments (ASP), which manages these compensation payments, has outlined that the aid for 2024 will cover 75 percent of the difference between the contract price and regulated tariffs, provided the contracts were signed before June 30, 2023.
For expatriates and local residents in France, it is advisable to keep an eye on electricity contracts and consider shifting to regulated tariffs (tarif bleu) if eligible, as these rates are tied to state-negotiated pricing.
The anticipated price drop offers a much-needed reprieve for those who have been grappling with the rising cost of living in recent years.
With a combination of nuclear energy production ramping up and market prices stabilizing, French households can look forward to lower electricity bills in early 2025.
This development is a positive sign for energy affordability in the country and provides some relief amid the broader financial challenges facing many French families.
