Sustainability pays off a lot less because of the price ceiling, according to research by Rabobank. And that incentive is disappearing even more now that energy suppliers have lowered their rates. “If the financial urgency is felt less, we will act less anyway.”
Rabobank even thinks that some households will choose to postpone sustainability. Especially households that remain below the price ceiling.
“Reducing energy consumption, however, is one of the most important structural solutions to the energy crisis, and can help reduce our dependence on fossil fuels and thus contribute to our climate goals,” say economists from Rabobank research institute RaboResearch. They also argue that the payback time for sustainable investments has decreased due to the price cap, and the incentive to intervene is therefore less great.
The price ceiling for energy and gas applies throughout the year and means that you pay a maximum price up to a certain consumption. For gas that is 1,200 cubic meters, for electricity it is 2,900 kilowatt hours. With gas you pay a maximum of 1.45 euros per cubic meter and with electricity 0.40 euros. If you go through that ceiling in terms of use, you pay the rate in your contract.
I expect that, if prices continue to fall, this will unfortunately also reduce the incentive to save.
Rates lower than the price cap
But more and more energy suppliers are lowering their tariffs. For example, it was recently Budget Energie that was the first to lower the rates below the price ceiling. The incentive to become more sustainable is declining, says RaboResearch. After all, you don’t feel much of it anymore when you go through the ceiling. “The decrease creates justified optimism,” says energy expert Joris Kerkhof of Independer.
“But there is now one supplier who has brought the variable monthly rate below the price cap. If more suppliers follow suit and the decline continues, the cap will no longer be relevant for customers with a rate below the cap. I expect that – when the prices will fall further – unfortunately this will also reduce the incentive to save. If the financial urgency is felt less, we will act less.”
The same applies here: before the energy crisis started, it was much cheaper.
Demand for insulation is falling
The Dutch Renewable Energy Association (NVDE) previously reported that the demand for conservation and insulation measures and heat pumps has declined since the introduction of the ceiling. “Energy prices are not too bad, so the sense of urgency is gone. Many people will wait another year before saving or becoming more sustainable,” said chairman Olof van der Gaag.
Does it still pay to save now that the financial incentive is less? “It is of course tempting not to think about it if you can pay those 0.40 cents and 1.45 cents and remain well below the ceiling,” says Kerkhof. “But this ceiling is calculated on an average consumption in the Netherlands, so if you live alone in the house and are often away, then you already had a consumption that was much lower than this average and you were always cheaper. : you were much cheaper before the energy crisis started.”
The purchase price of gas may rise again if demand is high
“The final conclusion is still: you don’t have to pay for every kWh or cubic meter that is not consumed,” says Kerkhof. “Even with prices of around 40 cents for electricity and 1.30 euros for gas, it remains interesting to see if you can become more sustainable. Saving electricity and gas is not only good for your wallet, but also for the climate. And the more there is a demand for gas, the greater the chance that the purchase price will rise again. So from a collective point of view, it is also better if you save individually.”
If another cold winter period arrives, your consumption will also increase again and there is a greater chance that you will exceed the ceiling. Moreover, prices are still higher than, say, a year and a half ago. “In August 2021 I was on a contract of 0.22 cents for electricity and 0.78 cents for gas,” Kerkhof illustrates.
Despite the conclusion, RaboResearch also emphasizes the importance of sustainability. “However, households can also choose to make the home more sustainable for reasons other than financial, such as improving living comfort.”
