Going Green Making Money

Going Green = Making Money

Many people think that going green mainly costs money. But from a financial point of view, it is often one of the most attractive investments you can make.

Net return

~ 0 %

Annual return on sustainability investments

Tax-free

0 %

No tax on savings from lower energy bills

Predictable

0 +yr

Long lifespan of sustainability measures

The comparison nobody makes

Going green is particularly lucrative if you pay tax under Box 3. In a few years’ time, the actual return under Box 3 will likely be subject to a tax rate of around 36%.

When you invest in sustainability, you’re effectively transferring money from Box 3 to Box 1. Instead of earning returns on savings or shares, you’ll be paying a lower energy bill.

The comparison nobody makes

That amounts to a return of approximately 10.8% per year. As this is not income but a lower energy bill, you do not have to pay tax on it. If you do not make your home more sustainable, and you use the return on your investment to pay a higher energy bill, you will soon need an investment that yields 14.8%, in this example. Savings accounts never yield that sort of return, and shares only do so in good years

Example Calculation

Investment

€10,000

Payback period

9 years

Lifespan

20 years

Annual return

~10.8%

Equivalent pre-tax return needed

~14.8%

Here you can see your net return on investment for making your home more sustainable, with payback periods of 4, 5, 9 and 12 years.

A persistent misconcepion

Sustainability still often has the reputation of being ‘expensive’. But sustainability is becoming increasingly affordable, whilst oil and gas are sometimes becoming more expensive.

What used to be expensive is now often good value for money

Grants make it even more attractive

Making your home more sustainable is so cost-effective that subsidies aren’t really necessary. Yet the government is still handing out generous subsidies. Make the most of them!

These reduce the investment and improve the return on investment.

Why this is often underestimated

Many people view sustainability measures as an expense.

But it is actually an investment

You convert money into lower costs

You reduce your tax burden

You achieve a long-term return

Realistic expectations

The actual return depends on:

Conclusion

Going green isn’t just good for the environment. It’s often a very sound financial decision too.