For most people, insulating their home is financially worthwhile. This is the conclusion of TNO and the Dutch Bureau of Economic Policy Analysis (CPB) in their largest study to date. In six out of ten households, monthly costs are lower than before insulation. For a large minority, the cost of insulation is so high that reduced energy costs do not directly offset it.
2.9 million households in the Netherlands have their own houses; they usually finance the insulation of the house with a subsidy and a mortgage increase. 0.4 million households are private tenants, often paying an increased rent for house insulation. 1.4 million households have a social rental flat at the housing association’s expense. On average, insulation measures cost about 20,000 euros per apartment.
Researchers only looked at homes built before 1992 because newer homes tend to be reasonably well insulated. The survey (.pdf) examines house size and year, occupant income, energy costs and interest rates. The degree of isolation is based on the “national isolation standard”.
The differences are huge, says Peter Mulder of the TNO research institute. “This is why we calculated the cost of insulating entire homes over 30 years old and how much energy could be saved. The average house doesn’t seem to exist. So insulation will often be a matter of customization.”
Low-income homeowners and commercial landlords perform worst in the study. For them, the high costs of insulating roofs, floors, walls, and windows often do not outweigh the low energy costs of renovation.
People with social rental flats benefit most from a housing association. You don’t pay for insulation measures, but you benefit from a lower energy bill.
In general, low-income people benefit most from isolation measures. This is because they spend a proportionately larger portion of their income on housing and energy costs.
The effect of insulation varies according to income groups, depending on the type of house, the price of the energy contract, loan and mortgage interest rates. The study assumes that the owners hold an additional mortgage for 25 years.
“The results show that income effects between and within income groups can still be quite large,” says Rob Aalbers of CPB.
The government can use the results of the study when deciding on further incentives to make housing more sustainable in the Netherlands.
For example, at the time the government’s spring memorandum is presented – by 1 June at the latest – additional measures will be introduced to ensure that the Netherlands achieves its climate targets by 2030. Properly insulating all homes in the Netherlands can reduce gas consumption by a quarter, according to researchers. This affects 1.7 billion cubic meters of natural gas per year.
TNO and the Dutch Association for Sustainable Energy previously advocated a large-scale approach for all residential areas to reduce the average cost of insulation. A higher gas price compared to electricity also makes a home’s design more sustainable.
Alternatives are being developed for the ceiling price that the government will apply this year to keep household electricity bills under control. The government will lift this ceiling price by the end of this year. In the coming year, new measures are aimed to provide financial support to people with low incomes and high energy costs. These people could have been better helped to insulate their homes.
Source: NOS

Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.