The effect of green energy of the housingmarket
Marnix Hazelhoff
19 February 2025
Reading time 6 minuten
Dröes, M. & Koster, H. (2019). Windturbines, zonneparken en woningprijzen.
The energy transition in the Netherlands focuses on increasing the share of renewable energy, aiming to derive at least 27% of total energy consumption from renewable sources by 2030 and achieve a largely sustainable energy supply by 2050. Wind energy plays a significant role in this transition, leading to a rise in the number of wind turbines in the landscape. This raises questions about the potential effects on the housing market. Research by Dröes and Koster (2019) provides insight into the impact of wind turbines on property values and suggests that the proximity of such installations has a measurable effect on housing price trends.
Key findings
Research indicates that the presence of wind turbines and solar farms has a significant impact on the housing market:
Wind turbines reduce property values
The installation of a wind turbine leads to an average property value decline of 1.8% in the surrounding area. This effect is limited to a 2,250-meter radius, with the first wind turbine in an area causing the most significant drop.
Height matters
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Wind turbines over 150 meters cause a greater decline of 5.4% within a 2 km radius.
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Smaller turbines (under 50 meters) have a negligible effect, which disappears beyond 1 km.
Impact of solar farms
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Solar farms lead to an average property value decrease of 2.6% within a 1 km radius.
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Possible causes include visual disturbance, sunlight reflection, and noise pollution from the installations.
Overall Impact on the Housing Market
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The total property value loss due to wind turbines is estimated at €5 billion, comparable to the replacement costs of the turbines.
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1% of turbines account for nearly 50% of the total property value loss, highlighting the importance of careful site selection.
What does this mean in practice?
Home values decline in sustainable energy projects
Houses near wind turbines or solar parks lose value on average, especially if the turbines are high or the first one is placed in an area. This can be a point of attention when buying and selling.
Price advantage for buyers, loss of value for sellers
Buyers may benefit from lower purchase prices, while sellers may face a longer selling time and a potentially lower sales price.
Location is key
Homes in sparsely populated areas generally experience less impact, while in densely populated regions the decline in value can be greater.
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Conclusie
This study highlights that the location and height of wind turbines and solar farms are crucial in minimizing their impact on property values. Placing turbines in less densely populated areas and clustering them in wind farms can help reduce negative effects. Additionally, taller turbines are more economically efficient per unit of energy produced compared to smaller turbines or solar farms. When developing renewable energy projects, these external costs should be considered, while policy measures such as compensation for homeowners remain a political decision.
