Most Dutch homeowners can afford serious sustainability measures; Few take them: DNB

The vast majority of homeowners in the Netherlands can finance serious sustainability measures for their homes with savings or a loan. But while more people have been taking sustainability measures, the Netherlands is still very far from its target of 2.5 million well-insulated homes by 2030, De Nederlandsche Bank reported.

“Serious sustainability” for the DNB means home insulation up to energy label B and a heat pump. According to DNB, 95 percent of homeowners in the Netherlands can financially bear the investment costs of those measures with savings or a loan within the maximum standard, while maintaining a financial buffer of 10,000 euros.

Two-thirds (66%) have enough savings to cover the costs outright, 29 percent can afford to get the necessary loans, and 3 percent qualify for a loan through the Heat Fund. “Even in the lowest income group, the vast majority of homeowners (96 percent) can finance sustainability,” the DNB said.

The DNB also surveyed homeowners on why they aren’t investing in sustainability. Over a quarter of those who haven’t taken any sustainability measures in the past decade cited the “long payback period” as the reason. A fifth cited the high installation costs, and almost a sixth were uncertain about the costs and benefits. “The amount that homeowners are willing to pay to make their own home more sustainable is also remarkably low,” the DNB said. And many don’t know about government subsidies and loans that can help with that.

“Now that almost all homeowners can afford sustainability, the availability of financial resources no longer appears to be an important obstacle,” the DNB said on how the government could encourage more people to take action. It suggested better information provision about available subsidies and favorable loan options. “It would help if homeowners could go to one place for sustainability advice.”

Last year, there was a 25 percent increase in households investing in sustainability measures. According to DNB, this was due to the energy crisis sparked by Russia invading Ukraine and the resulting high energy bills. So the government could also focus more on that benefit of energy-efficient homes.

If this fails to bring homes’ sustainability on target, the government could consider a “phased introduction of a sustainability obligation when purchasing a new home,” the DNB said. That means that new homeowners will need to reach a set energy label within a set time after buying their new home.

The DNB stressed that, if the government takes this step, it must make sure to give homeowners enough time to make the necessary investments, also given the current shortage in the labor market. “Current support in the form of favorable loans and subsidies must remain available for homeowners who have difficulty paying for these types of investments and for investments that are not (yet) profitable.”