My suggestion would be to use some deterrents to try and repel the woodpeckers and most importantly get the house checked and treated for insects.
Why do woodpeckers peck cedar siding.
These diminutive birds 6 inches long peck at wood usually trees but downies sometimes switch to wood siding and can.
The netting can go from the overhanging eve to the siding but needs to be out about 3 inches to keep the bird from pecking through it.
They do this to build their nests.
This pecking behavior serves three purposes.
Three reasons why woodpeckers drill holes on houses.
The wood on your house is no different to this bird than a tree would be so it is a potential nesting spot.
With all the urban development and loss of natural habitat woodpeckers take what they can get in order to survive.
As you know woodpeckers sometimes are looking for food.
The woodpecker is proclaiming your territory as his own and attracting a mate at the same time.
All the noise the male woodpeckers make may be annoying to you but it s oddly charming to the female woodpeckers.
Woodpeckers are natural cavity nesters.
I see from the photo you sent that you have.
Many times flies ants bees and moths will sneak into cracks and up behind the cedar shingles.
These cakes are placed inside a woodpecker suet feeder where they can rest and chow down.
This method works particularly well if they are attacking your cedar siding in search of insects set these up away from your house and the woodpeckers should leave you alone.
Woodpeckers do not seem to be attracted to this type of siding so damage is usually minimal.
The birds uncover and eat adult insects their eggs and larvae and other invertebrates living in or under the bark and in the wood of the tree.
Drumming holes many siding types are potential instruments for woodpecker drumming behavior.
Why do woodpeckers peck.
Woodpeckers may also be attracted to insects in the siding.
Also attractive to woodpeckers are metal downspouts gutters chimneys and vents.
Woodpecker suet cakes are one of these birds favorite foods.
These include houses with aluminum siding as well as the trim boards and fascia boards of any wood brick and stucco homes.
The birds also drill holes in dead or dying trees in which to nest.
If the siding or material that is cladding your home is soft enough and easy for them to drill into a woodpecker may continue pecking and drilling at your home even if they don t actually discover any insects.
Learn more about why woodpeckers get such a kick out of your siding and what you can do about it.