Breakthrough in financing net zero energy for apartment owners in the Netherlands
Good news from the Netherlands regarding the Interreg E=0 project where the MRDH (Metropolitan Region Rotterdam – The Hague) is working together with homeowner associations to forge solutions to finance net zero energy retrofits for people who are members of a homeowner association. Recently the Ministry of the Interior, several provinces and local governments signed a statement of intent to develop a financial model that will help such homeowners to finance the retrofits. This is an important step towards establishing more sustainable housing stock before 2050.
In the Netherlands 1,2 million out of the 7 million homeowners are members of a homeowner association. Energy use in these homes covers 20% of national CO2 emissions. Retrofitting these homes to net zero energy will contribute significantly to climate objectives whilst simultaneously boosting and revitalising the urban environment.
Pilot projects in the Netherlands (most of them supported by the Stroomversnelling) show that residents are willing to choose a net zero energy retrofit if their cost of living would be the same after the retrofit. This is especially true when it improves their comfort of living and increases the value of their apartments. Building-linked finance can meet all of these criteria with the additional security that the apartment owner will not have to carry the debt if they sell the house before the investment is paid off. These loans are paid for by the costs that are included in the service fee of the homeowner association and are transferrable to future owners in exchange for very low energy bills and great comfort.
Several pilots in the Netherlands have already proved that this model is possible. The most difficult aspect to date has been that the finance needs to be guaranteed by local government. The signed statement of intent and resulting development of a financial model with building-linked financing is a big breakthrough. The goal is that homeowner associations are able to get a loan with a national guarantee for a period of 30 years. Such long term loans enable apartments apartments to be retrofitted without increasing the cost of living for homeowners.