LAST UPDATE | 9 Feb 2022
THE GOVERNMENT YESTERDAY announced a new scheme aimed to make it easier and cheaper for homes to become more energy-efficient.
The retrofitting measures covered in the plan can help make bills more affordable in the long run, but ordinarily they can be very expensive in terms of up-front costs.
Let’s take a closer look at the new National Home Energy Upgrade Scheme.
Reducing emissions and cost
The new scheme is basically aimed to make it simpler and more affordable for people to retrofit their homes. The scheme will be open to applications next month.
Retrofitting homes means making energy-efficient changes to existing buildings through measures like installing heat pumps, insulation and solar panels.
Retrofitting is one of the main ways the government intends to reduce emissions from the residential sector in the coming decades.
Under the government’s Climate Action Plan, the country must reduce overall greenhouse gas emissions by 51% by 2030 and achieve net-zero emissions by 2050.
500,000 homes will be retrofitted and 400,000 heat pumps will be installed into Irish homes by 2030 under government plans.
Retrofitting has two main benefits – it minimises the emission output from homes and saves households money on their heating and electricity bills.
But this all comes at a cost and the new government scheme is aimed at decreasing the upfront expense for households.
Under the plans people will be able to avail of grants to cover 46-51% of the cost of a deep retrofit.
Current grants available cover around 30-35% of costs. Around 80% of the cost of attic and cavity wall insultation will also be covered under the grant.
Grants of up to €25,000 will be offered for private homes to cover half the costs of a deep retrofit. For example, the grant for heat pumps has increased from €3,500 to €6,500 and the rate for external wall insulation has increased from €6,000 to €8,000 for a detached house.
Each grant is worth a different amount for different types of homes and depending on the retrofit.
A residential retrofit loan guarantee scheme will be introduced in the third quarter of this year to help households cover additional retrofitting costs.
These low-cost loans are being worked on between departments and the Sustainable Energy Authority of Ireland (SEAI). It’s understood to be the first loan-guarantee scheme in place in the residential sector.
Affordability
Some experts have said the plan does not go far enough for lower income households.
Michelle Murphy Research and Policy Analyst at Social Justice Ireland, told The Journal that many people will not have tens of thousands to spend on a deep retrofit.
“The problem then is that it almost becomes an upper redistribution of resources,” Murphy said.
The funding for retrofitting comes from all contributions to the public purse. If the only people who can take advantage of the grant at that level are people on higher incomes but everyone is subsidising it – particularly people in low incomes – it’s basically functioning as an upward wealth transfer.
“People on lower incomes aren’t getting the advantage but are still paying increased carbon taxes as they do up and their homes are still losing heat.”
In terms of minor works such as insulating attics, Murphy said the lesser savings from these measures compared to a deep retrofit are not comparable.
Murphy said Social Justice Ireland would like to see a State-led retrofitting scheme, with loans provided by the government.
When questioned at a press conference yesterday evening about concerns that the new scheme won’t be accessible for lower income households, Eamon Ryan said: “Achieving this goal of every single Irish home to be fit to live in, I think is the best social project of our time, the most important social project of our time.”
For renters, Labour housing spokesperson Rebecca Moynihan said a no-eviction order should be put in place for any home in receipt of the retrofitting grant.
“Anyone in receipt of a retrofit loan cannot be allowed to use this work as a grounds for eviction or to raise rents,” the senator said in a statement.
Jobs
Politicians have been keen to highlight that the scheme will benefit the construction industry.
Tánaiste Leo Varadkar said this scheme will be good for creating jobs and for improving public health.
He also said it is sending a message of “certainty” to construction that there will be a constant stream of retrofitting work in the years to come.
Varadkar said people trained in the construction sector can learn how to carry out retrofitting work in a matter of weeks.
Environment and Climate Minister Eamon Ryan said small Irish businesses will be “competing with each other” to get this business.
Officials believe the scheme will have a positive impact in rural areas and for smaller scale contractors.
Cost certainty for households
To apply for these grants, householders will contact a ‘one stop shop’ company through a list that will be available on the SEAI website in the coming weeks.
This company will complete the job from start to finish, again intended to simplify the process for homeowners. These ‘one stop shop’ companies will be taking on applications through the grant scheme in the coming weeks.
Electric Ireland Superhomes is one of around a dozen of these organisations in the country focusing specifically on deep retrofits.
Managing director Stephen O’Connor told The Journal that there is an acceptance that deep retrofitting is “the real way now to tackle the poor energy performance of domestic buildings”.
He said around 1.5 million homes need “serious work” and any home built before 2006 needs retrofitting.
“There’s also a growing acceptance that the best way to do it is not those small individual single measures, but to do it right once and do the whole house,” he said.
Previously, under the SEAI scheme, homeowners had to pay the full cost up front and then claim back the grant portion.
Under this scheme the consumer will only pay their portion and the provider will handle the grant application and will claim the money from the scheme, which O’Connor said will make for a smoother process for householders.
Applications are made through the SEAI. The organisation said this morning that it is experiencing high call volumes.
Contains reporting by Michelle Hennessy.
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