Government retrofitting plan doesn't go far enough for lower income families, experts say

THE GOVERNMENT’S NEW plan to make retrofitting homes more affordable does not go far enough for lower income households and will not deal with the current cost of living crisis, experts have said.

Yesterday Cabinet approved Environment Minister Eamon Ryan’s proposal for the scheme, which will cover up to half of the cost of deep retrofitting and the majority of costs for smaller works.

Although the increased affordability has been welcomed, experts have pointed out that this system will still not make the kinds of extensive works that make a real difference to energy ratings accessible for lower income households.

Under the scheme grants covering almost half the cost of a deep retrofit will be offered. This type of work to bring a home’s energy rating to B2 has an average cost of €50,000.

This means the homeowner would pay around €25,000 towards the work.

Speaking to The Journal, Michelle Murphy Research and Policy Analyst at Social Justice Ireland said most people on low or average incomes will “never have the sort of money available to them”, or if they do they will have saved or borrowed it for some other purpose.

“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.”

The scheme will also provide grants to cover 80% of minor works, such as insulating attics or cavity walls. 

Murphy said the savings these kinds of measures provide do not compare to the benefits offered by deep retrofitting. 

“People on lower incomes can do smaller things, but those things won’t reduce their energy bills in the same way as a deep retrofit, so they will invest in getting their attic insulated, and maybe one or two other things and think that’s enough, they don’t need to go any further,” she said.

“With that small investment they’re not getting huge benefits and neither are we as a country in terms of getting our emissions down.”

She said it can also be challenging to incentivise providers to do those smaller jobs. 

“If builders have to go through a load of paperwork to do a really small job, how do they encourage them to take that on? There’ll be higher demand now and they’ll be choosing between those and bigger jobs.”

To help homeowners with their portion of the funds, the government said low interest loans will also be made available. 

However Murphy said many lower income households would be wary about taking on any debt, even at a low interest rate. 

“It’s a significant amount of debt and if you have children at school or college-going age, or you’re older, you’re not going to take that on,” she said.

Alternative solutions

Murphy said Social Justice Ireland would like to see a State-led retrofitting scheme, with loans provided by the government. 

“We need to look at how it’s done in other countries like The Netherlands,” she said.

“What it would boil down to is the State putting the money up and people re-paying it through their utility bills, with a proportion going to the State until its investment or loan is paid off.”

She said a new State body would likely be required to manage a scheme like this.

“It’s the only way to retrofit homes at scale, the majority of people don’t have the additional funds to do it themselves,” she said.

Renters

While the announcement was broadly welcomed, Labour Party senator Rebecca Moynihan expressed concern that it could contribute to evictions in the rental sector.

She called for specific rules to be attached to the provision of these grants for private homes.

“It cannot be used as an excuse by private landlords to raise rents or kick out tenants,” she said.

“I am calling on government to guarantee that there will be strong protections for renters in the private market associated with this scheme. Anyone in receipt of a retrofit loan cannot be allowed to use this work as a grounds for eviction or to raise rents.”

She said the government must put a “no eviction order” on any property that receives a grant. 

One-stop shops

The government will be relying on so-called ‘one-stop shops’ to provide a wraparound service, making the process more straightforward for homeowners.

Electric Ireland Superhomes is one of around a dozen of these organisations in the country focusing specifically on deep retrofits. 

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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 Sustainable Energy Authority of Ireland (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.

The scheme is likely to increase demand as the options open up to more homeowners. The industry may struggle to meet that demand, O’Connor said. 

“One of the biggest challenges facing the industry with this restructure is that there is a shortage of building contractors to do the work,” he said.

“They have a choice, they can work on new build, which is booming, or they can work on retrofitting, which is also booming.”

O’Connor said the State will need to ensure that the scheme is attractive to providers and that grants are paid efficiently.

“But we also need more young people in the industry, we need them in apprenticeships and we need to convince Irish workers abroad to come home,” he said.

“All of this has to be joined up thinking, this isn’t a two or three year plan, this needs to be looked at as a plan for the next 30 years.”

When questioned at a press conference yesterday evening about concerns that the new scheme won’t be accessible for lower income households, Green Party leader 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.”

The Taoiseach said in the short term, the government is taking measures to cushion people against the current inflationary cycle.

“But in the overarching objectives of the government, the measures to address climate change can’t be delayed. We do have to, if we’re serious, go ahead with these kinds of measures,” he said.