Saving energy: Arrhenius got it right

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Swedish chemist Svante Arrhenius, born in Stockholm in 1859, was the first to make the connection between CO2 in the atmosphere and a rise in temperature. The Intergovernmental Panel on Climate Change’s latest report, which I read on 31 March 2014, states the following: "There can hardly be any doubt that the climate change of the past sixty years is largely the result of the emission of greenhouse gases by human beings." The report confirms that Arrhenius got it right.

A brand-new home and no energy bills – homeowners love the sound of this idea Jan Raes Jan Raes Sustainability advisor

Doers and pioneers save energy

I was also representing ABN AMRO at a residents’ group in Den Bosch on 31 March. These doers and pioneers don’t need the IPCC report to get to work saving energy: they are already investing in their homes and, consequently, saving money and using clean energy. They are gradually replacing their homes’ insulation, heating, lighting and electricy supply.

No more energy bills

A brand-new home and no energy bills – homeowners love the sound of this idea. Right now there are a few hundred of these homes in the Netherlands, with a few thousand soon to come. The new-build market clearly isn’t moving rapidly in this area. So turning an existing home into an energy-neutral home presents opportunities. The number of homes renovated to achieve such high energy savings is set to grow sharply. A home renovation of this kind costs on average €25,000:  €5,000 for insulation, €10,000 for hearing and €10,000 for solar panels. A more ambitious renovation (for instance, due to overdue maintenance) could easily run into €50,000 or more. Homeowners rightly wonder what the value of their home would be if it were energy-neutral. There are two issues at play here: the amount of the current energy bill and the rise in value after an energy-saving renovation.

High or low energy bill?

The less electricity and gas an occupant uses now, the lower the financial gains will be after an energy-saving renovation. That’s a fact. An average Dutch family pays €180 a month on energy (source: Nibud). Homeowners with the same type of home, built in the same year, have different energy bills. Some thrifty families pay around €100 a month, while other families €260 or more. Less careful homeowners will therefore reap the biggest gains. This group in particular stands to benefit greatly by using savings to finance a renovation. The amount they save in energy costs is higher than the interest they receive on their savings. Plus which, they can expect their energy-efficient home to rise in value.

Estate agent’s appraisal rule?

The rule of thumb for appraisals is: the estate agent adds around 70 per cent of the renovation costs to the value of  the home. So an energy-saving renovation of €25,000 is good for an increase in value of only €17,500, while a well done renovation reduces the energy bill for at least 20 years. The estate agent industry is therefore reviewing the appraisal rules, specifically for energy-saving renovations. Long-term lower energy costs can boost the rise in value by more than the current 70 per cent. Estate agents are already noticing that energy-efficient homes sell better. That, too, is good news for homeowners.

Why are we at ABN AMRO talking about energy reduction and energy-saving renovation?

Talking with homeowners, who want to tackle their energy-saving renovation effectively, helps us understand our customers’ dilemmas and needs, allowing us to help craft solutions to the problem of reducing energy consumption. ABN AMRO believes that affordable energy will help our customers achieve financial health – and it contributes to a better environment!

More information:

Wikipedia Svante Arrhenius


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