We have a challenge #2
How can we reduce the energy demand of buildings?
Although energy reduction is an important part of the EU 202020 ambitions, energy reduction in the build environment seems a hard nut to crack. Europe is not reaching this part of the goals while it is proven that investment in real estate efficiency pays back in a few years. It is not logic that it is not generally acknowledged and therefore it’s not changing the market for sustainable-refit of existing real estate.
Why not use the tax system as an incentive? This is what we discussed during a Transform dinner. The solution felt simple and we made a drawing of it.
Stimulating building owners to make a change might sound easier than it is. Although reality seems to prove different we still think the money stimulates humans, cheesy, but true. How does it work?
What do you think about efficiency investments like described above? You doubt! Are the promised saving numbers correct? Is the payback time thru or false? Do I invest in 5 or maybe 10 years payback? Uncertainty is not a good driver for decisions in efficiency; especially if it’s over a long period of time.
Humans want facts, certainty, numbers, and to be absolutely sure about the benefits. The drive will come when people are really sure that they ‘make money’ after investing.
Let’s explain the proposal for the tax system as shown in the drawing.
Building owners pay property tax. In the Netherlands this property tax is for fully based on the (market) value. Why relate it on the market value only if you can base in on the energy-efficiency as well? Imagine that 50% of your tax is about the economic and the rest is about the energetic value as shown in the drawing.
The idea is that owners investing in efficiency get a tax-BONUS and will not only benefit from their lower energy bill, but also from the lower tax. The bonus is directly visible and therefore an effective incentive! People that don’t invest in energy efficiency will pay a MALUS and end up paying a higher energy bill and a higher tax bill.
After the payback time of the efficiency investment is over there will be new round for investments and a new period for the yearly BONUS. Simple isn’t it?
Let’s go! We would like to say. What is your opinion?