Home improvements to beat sky-high energy hikes? Belgians not convinced

Home improvements to beat sky-high energy hikes? Belgians not convinced
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Despite the soaring energy prices precipitated by Russia's invasion of Ukraine last year, Belgians have proven reluctant to renovate their homes to improve energy efficiency, l'Echo and De Morgen report.

According to Statbel, the national statistics office, the first ten months of 2022 saw just 26,781 permits for "in-depth energy transformations" of Belgian homes granted: fewer than over the same period in 2021 (26,796).

"I expected the number of applications for permits to increase," said Johan Albrecht, a Professor of Environmental Economics at Ghent University and a Fellow at the Itinera Institute. "But it seems the exceptional energy prices have had no impact on the number of renovation permits in our country."

An economic mystery?

On the face of it, the lack of interest in so-called 'green renovations' is puzzling, given that now more than ever is the time to reap financial benefits. According to l'Echo's estimates, in 2019 a €40,000 refurbishment would save the average Belgian household approximately €1,000 a year; in 2022 a similar renovation would save the average household more than €2,000 annually.

Moreover, for anyone looking to sell their home a high energy efficiency rating is an enormous boon: "The owner can count on a stronger than expected increase in the value of their home," Albrecht explained. "The market rewards energy efficiency more than ever."

Albrecht dismissed the notion that the small number of renovations is down to the fact that they often take a long time to plan and implement: "As early as the spring of 2021, so before the Russian invasion of Ukraine, the price of European gas – and in its wake, the price of electricity – had started to climb unexpectedly. Since then, eighteen months have passed, which should have been enough for homeowners to make the decision to renovate their properties."

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The professor believes that Belgians' reluctance to refit their homes is due to various factors. These include soaring inflation, which has pushed up the costs of material and labour, as well as high interest rates, which make it more difficult for households to take out loans to finance renovations.

He noted that green subsidies provided by the Belgian state are often insufficient to cover major renovations. Furthermore, many Belgians expect energy prices to fall to more manageable levels in the near future – thereby reducing the expected financial returns of renovating their homes today.

"If [Belgians] come to terms in 2023 and 2024 with an energy bill that is still high, but not seriously overpriced, the renovation rate should remain stable and not increase as we hope."

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