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Energy credits should not have included richest households, climate NGO says

A new report by Friends of the Earth has made 49 recommendations to government about how to tackle energy poverty.

THE BUDGET’S ENERGY credits should have been targeted to those with a genuine need for support instead of allocating funds to high-income households that were not affected by cost of living increases, according to a climate NGO.

A new report by Friends of the Earth has assessed the strengths and weaknesses of current government policies and interviewed a range of experts working in energy and social justice to compile detailed recommendations on how to tackle energy poverty. 

While there has long been some level of energy poverty in Ireland – that is, being unable or under significant pressure to afford an adequate supply of electricity or heating – the combination of rising energy bills and wider inflation has meant a larger number of households have found it even more difficult to cover energy costs over the last year.

“Frontline services report that those affected by fuel poverty now comprised both people who have long been trapped in fuel poverty – but for whom the situation is now much worse – and new cohorts,” the Friends of the Earth report said.

It warned that there is a “real danger that things will worsen in 2023″ as the value of credits and social welfare decrease with inflation, with “resulting deterioration in health”.

The report outlined that social inclusion experts were concerned that “the energy credits in Budget 2023 were not targeted”, describing it as “a political decision whereby government spread help to the full range of its supporters, including more affluent households who could still afford higher energy costs”.

“In response to the energy price crisis, the government introduced two sets of electricity credits, valued at €400 in 2022 and €400 in 2023, which are automatically credited to household electricity bills,” the report said.

“This was a highly expensive (€1.6 billion), poorly targeted measure that added to inflation and incurs a significant opportunity cost. It is reasonable to say that at least the top third of households did not need this intervention to prevent them from experiencing energy poverty or deprivation.

“If a third of this expenditure (€533 million) was better targeted, it could have been much more efficient and effective. From a climate perspective, the opportunity was lost to allow higher energy prices to act as a shock treatment to push households with the capacity to engage more seriously in energy conservation.

“Instead, the message from government was that the state will step in to pay people’s bills when energy (including fossil fuels) becomes more expensive.

“The experience of an €800 subvention may give higher income households the false impression that the current energy crisis is overstated, whereas €800 will not be enough to allow lower income households to meet their energy needs in the two-year period 2022-23, especially those not eligible for Fuel Allowance.”

The report identified that the private rental sector is “particularly vulnerable” to energy poverty because many rentals are older dwellings with low BER standards.

Additionally, the sector suffers from “weak regulation and protections for tenants”, the report said, and weak incentives for retrofitting, with tenants in private rented or social housing typically not afforded any ability to influence the insulation level of their homes.

There are “serious problems” with retrofitting and energy efficiency programmes, according to the report.

These include waiting lists of up to three years for the SEAI’s free energy upgrade scheme and the shortage of necessary workers and skills to carry out the programmes efficiently.

Overall, it found government policy on energy poverty to lack scale and ambition, with a more significant focus on short-term fixes to crisis situations than on finding long-term solutions.

It said many policies are “overly market-focused” and “undermined by siloed Departments and public bodies” and that the government’s new energy poverty action plan does not offer clear quantitative targets for reducing energy poverty or deprivation. 

The report offers 49 recommendations to the government on reducing energy poverty, including improving access to grants and zero- or low-interest loans to finance retrofitting, increasing all social welfare payments to reflect the cost of living, introducing an Energy Poverty Act with legally-binding targets and transparent regulation of standing charges on energy bills.

It recommends reforming the role of the Commission of Regulation of Utilities and other public bodies and establishing a Just Transition Commission to create better public awareness about efforts to integrate social justice with climate action.

In a statement, FOE Energy Policy Officer Clare O’Connor said that “this research shows that if the government is serious about meeting their climate targets, they will need to change their current approach and do it in a way that protects and prioritises households that are most in-need first”.

“Families who can’t afford to pay their energy bills aren’t in a position to invest in expensive retrofitting measures. The report shows how the Government should be going much further to make sure these families have access to the benefits of warm homes and lower energy bills,” O’Connor said.

“Retrofitting for low-income families in inefficient housing needs to be a top priority – much more investment is needed in state-led retrofitting programmes so they can reach more families, specifically the SEAI Free Energy Upgrade scheme and the Local Authority Retrofit Scheme for social housing.”

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13 Comments
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    Mute Dramafree 2023
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    Mar 15th 2023, 11:00 AM

    Where are they off to with the “not affected by the cost of living increases” do these household shop in special shops where prices have not changed. Imagine the cost of the admin alone to decide who did and didnt qualify. Like the age old argument on childrens allowance. Just give it to them, they take it with the other hand in taxes.

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    Mute Michael Reilly
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    Mar 15th 2023, 11:07 AM

    @Dramafree 2023: who elected this looney left outfit to decide anything.

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    Mute Donal Ronan
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    Mar 15th 2023, 11:11 AM

    How about our taxes being better TARGETED and not funding all these organisations.
    I doubt anyone has a problem with them existing, but they should be funded by people that want to be involved with them, not hard pressed taxpayers.
    After all, what’s good for the goose is good for the gander.

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    Mute TheQueenofHibernia
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    Mar 15th 2023, 12:26 PM

    The Standing Charge on my electricity bill is always bigger than the actual cost of electricity. I am careful with the usage of electricity but it’s impossible to economise with pay Standing Charge, VAT etc. on top of paying for electricity. As for rich people being subsidised. Well that’s Ireland for you. The standing charge for a mansion on a thousand acres is the same as the standing charge for a caravan on a halting site. The politicians and the people in this country are always careful to take good care of the wealthy people in this country.

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    Mute Sal Paradise
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    Mar 15th 2023, 1:55 PM

    @TheQueenofHibernia: Except most income tax is earned from the so call wealthy people. So the more someone earns the more they pay in tax!!

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    Mute Cable Stayed
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    Mar 15th 2023, 1:04 PM

    People comment like this is free money that appears magically and gets distributed based solely on need. I wish that it was, but unfortunately in the real world it’s money from taxpayers. The simple fact of life is that if you want to redistribute the wealth from the richest to the poorest for important one off things like this, you need to give something back to the people that will be paying the majority of the cost. It may not be the most economical solution but that’s the politics of life.

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    Mute David Corrigan
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    Mar 15th 2023, 11:08 AM

    Bit late now.

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    Mute Fairplay for all
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    Mar 15th 2023, 12:38 PM

    The Energy Grant was paid to people with Holiday Homes and 2ND / More properties,
    I have heard people boast that this grant paid for holidays abroad

    47
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    Mute Fairplay for all
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    Mar 15th 2023, 1:17 PM

    This is not a redistribution of wealth,it is simply a measure to assist the less fortunate to keep stay alive, there is no justification for a double payment to the owner of both a principal private residence and a holiday home, one person can only use one house at one time. Remember the less well off also pay many forms of taxation.

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    Mute Cable Stayed
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    Mar 15th 2023, 1:37 PM

    @Fairplay for all: Public spending is funded by taxation, the redistribution of wealth for the benefit of society is done through taxation. Therefore any public spending that gives money to those most in need, is a redistribution of wealth. As I said, it is not the most economical way of doing it, but it is the simplest and most widely accepted. The same can be said for all universal payments like children’s allowance and even the fact that everyone gets a tax free allowance regardless of wealth. In this case, every one who didn’t really need it will end up paying the €800 back through tax and also a portion of the people who really needed the €800. Means testing one off measures like this is expensive, time consuming and very likely to miss a lot of people that need it.

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    Mute Kate Peters
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    Mar 15th 2023, 5:49 PM

    I’m disabled and only for the decent tax paying people I’d have no heat,thank yee for that,I put in €900 that I got,I’ve a small little 2 bed house,I checked ita few days ago,and it’s almost gone,like April can be the worst month of the year with weather,I think because everyone,working people aswell,are so conscious of electricity,and fuel,that feels like it’s constant and never ending.

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    Mute Ned
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    Mar 15th 2023, 5:35 PM

    Friends of the earth go away

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    Mute Fairplay for all
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    Mar 15th 2023, 3:04 PM

    As it is a mechanism giving money both to those in need and those who already have it is not a redistribution of wealth it may be a redistribution of money and yes childrens allowance allowance payments should be restructured to favour those in need.

    A targeted approach, which may be more cumbersome is surely within the remit of the respective Government departments such an approach would be far more effective and equitable.

    13
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