‘Solar panels will soon be too expensive for a rental house’

September 29, 2021 by No Comments

The House of Representatives is against the plan of Minister Eric Wiebes (Economic Affairs and Climate, VVD) to cut back on the subsidization of solar panels. This is mainly because those panels in the new proposal, which should replace the current ‘offsetting scheme’, are no longer lucrative for tenants of housing association homes.

In written consultation with the minister, the CDA calls it “particularly undesirable” if social housing falls outside the scope of the scheme in practice. This concerns 2.4 million homes, almost a third of the total in the Netherlands.

Other coalition parties also find the possible discrimination of tenants worrying. “Whether you own a house or rent a house, solar panels should pay off,” says Member of Parliament Matthijs Sienot (D66). “That has to be the starting point, one way or the other.”

Carla Dik-Faber (ChristenUnie) emphasizes that “everyone should be able to participate in the energy transition, including people with a somewhat smaller grant. The new netting scheme must also be suitable for social rental housing”.

Minister Wiebes has been trying for three years to set up a subsidy scheme that should cut back on the current one, as stipulated in the 2017 coalition agreement. According to the cabinet, the current netting scheme, which now costs the treasury 240 million euros annually, has become too generous, partly because solar panels have become cheaper.

Solar power that is not used directly is passed on to the grid. The accumulated ‘credit’ can be used later – tax-free. This netting will gradually be phased out in Wiebes’ plans from 2023. In ten years’ time, only 28 percent of the ‘own’ electricity may be netted. A year later, in 2031, there is no longer any question of netting. Anyone who then supplies electricity to the grid will only receive a modest compensation from their energy company.

Waiting for return

Wiebes asked TNO to calculate the financial consequences. For homeowners, the return decreases and the panels are recouped in a maximum of nine years. Now it is five to seven years. Anyone who purchases panels during the current cabinet term (i.e. at the latest in 2021) will normally earn them back within seven years. Those who enter later will have to wait longer for their return. “We as D66 are also very critical of that,” says Sienot. “The minister has always spoken of a period of seven years.” TNO has not made any calculations for housing associations because, according to Wiebes, „the netting arrangement is not specific [is] designed for the social rental sector”.

According to the Ministry of Economic Affairs and Climate (EZK), social rental has other options for making solar panels on the roof lucrative. For example, housing associations can make use of other subsidies, such as SDE+ for sustainable energy. Furthermore, through amendments to the Housing Act, housing associations have more options for installing solar panels on a large scale, according to EZK.

According to Roland van der Klauw of the Wocozon foundation, which takes care of the financial settlement and installation of solar panels for many corporations, the current netting arrangement reduces the energy bill of the social tenant by an average of 5 euros per month per panel, with a panel costing more than 2 euros per month. .

“If this netting gradually disappears, it will no longer be possible for housing associations to calculate. A tenant does not want to wait seven years, like a homeowner, before there is an advantage,” says the former TNO specialist. “We have narrowly succeeded in finding a construction in which the tenant now has a reasonable advantage and the corporation will pay off the costs in twenty years.”

Last year, 7.3 percent of social rental homes were fitted with panels. “But in the run-up to the new scheme, almost everything has come to a standstill at housing associations,” says Van der Klauw. “Only the direct use of your own electricity will yield something in the future, for example if the washing machine is running while the sun is shining. As a result, many corporations want to install no more than three panels on the roof, but we want to get rid of such ‘excuse panels’.”

Bomb under support

When the phasing out of the netting scheme was announced at the end of last year, Aedes – the umbrella organization for housing associations – argued in favor of first analyzing the consequences for tenants and, if necessary, making an exception for housing associations.

MPs emphasize that the exclusion of millions of tenants goes against the idea that the energy transition must have the broadest possible support. Agnes Mulder, MP for the CDA: “Social tenants are one of the most important groups that should be able to participate and then they seem to fall between two stools. It should not be the case that only people with their own house benefit from solar panels.”

According to Sandra Beckerman (SP), declining netting is putting tenants second, while most climate subsidies are already going to the higher incomes. “If you only have to pay for climate policy and can never reap the benefits yourself, that is a bomb under the support. There is already a lot of resistance against wind turbines and solar parks, but that does not apply to sun on the roof: that must be the most logical solution.”

For D66 and CDA it is not necessary that the netting scheme enables social tenants to obtain profitable panels. Both parties may also do this through other arrangements. “Something has already happened,” says Sienot of D66. “There is extra money in the context of Urgenda and with the SDE+ subsidies there is 4 billion euros on the shelf. The housing associations can also claim this, and then I would like to know whether housing associations are still unable to achieve this.”

According to Mulder, the form – netting or not – is secondary. “If housing associations are given other means to allow tenants to participate, that’s fine too. The condition is that they can also benefit.”

No alternatives

In practice, Van der Klauw of Wocozon sees no alternatives that can replace the netting arrangement for a resident of a social rental home. For example, the SDE+ scheme is primarily intended for large, efficient projects, so that for smaller projects the compensation from the subsidy pot is insufficient to make it profitable. Van der Klauw does not expect much from the extra funds from the new Urgenda measures. “With this you can renovate and provide panels with a maximum of ten thousand homes – out of a total of 2.4 million – in a year. It helps, but it is of a different order of magnitude than the netting arrangement.”