Here’s how the government’s ambitious renovation grant scheme is supposed to work


Updated 1 hour ago

THE GOVERNMENT yesterday announced a new scheme to make it easier and cheaper for homes to become more energy efficient.

The modernization measures covered by the plan can help make bills more affordable in the long run, but they can usually be very expensive in terms of upfront costs.

Let’s take a closer look at the new national home energy upgrade program.

Reduction of emissions and costs

The new program essentially aims to make it simpler and more affordable for people to renovate their homes. The program will open for applications next month.

Renovating homes means making energy-efficient changes to existing buildings through measures such as installing heat pumps, insulation and solar panels.

Retrofitting is one of the main means by which the government intends to reduce emissions from the residential sector over the next few decades.

Under the government’s climate action plan, the country is to 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 in Irish homes by 2030 under government plans.

Retrofitting has two main benefits: it minimizes the emissions produced by homes and saves households money on their heating and electricity bills.

But all this has a cost and the new government program aims to reduce initial household expenses.

Under these plans, people will be eligible for grants to cover 46-51% of the cost of a deep renovation.

The subsidies currently available cover around 30-35% of the costs. Approximately 80% of the cost of attic and cavity wall insulation will also be covered by the subsidy.

Grants of up to €25,000 will be offered to private homes to cover half the costs of a major renovation. For example, the premium for heat pumps has increased from €3,500 to €6,500 and the price for the insulation of exterior walls has increased from €6,000 to €8,000 for a single-family house.

Each grant is worth a different amount for different types of homes and depending on the renovation.

A home improvement loan guarantee program will be introduced in the third quarter of this year to help households cover additional renovation costs.

These low-cost loans are being worked out between the departments and the Sustainable Energy Authority of Ireland (SEAI). This would be the first loan guarantee system implemented in the residential sector.

Affordability

Some experts said the plan does not go far enough for low-income households.

Michelle Murphy Research and Policy Analyst at Social Justice Ireland, said The newspaper that many people won’t have tens of thousands to spend on a major renovation.

“The problem then is that it almost becomes a superior redistribution of resources,” Murphy said.

Funding for the renovation comes from all contributions to the public purse. If the only people who can take advantage of the subsidy at this level are high-income people but everyone is subsidizing it – especially low-income people – it essentially works as an upward wealth transfer.

“Lower income people don’t get the benefit, but still pay higher carbon taxes as they go up and their homes still lose heat.”

In terms of minor work such as insulating attics, Murphy said the lesser savings from these measures compared to a major renovation is not comparable.

Murphy said Social Justice Ireland would like to see a state-led modernization scheme, with government loans.

Asked at a press conference last night about fears the new scheme will not be accessible to low-income households, Eamon Ryan said: ‘Achieving that goal of every Irish household to be fit for living, I think it’s is the best social project of our time, the most important social project of our time.

For tenants, Labor housing spokeswoman Rebecca Moynihan said a no-eviction order should be in place for any home receiving the renovation grant.

“Anyone with a renovation loan cannot be allowed to use this work as grounds for eviction or to raise rents,” the senator said in a statement.

Works

Politicians have been keen to point out that the program will benefit the construction industry.

Tánaiste Leo Varadkar said that this program would be good for creating jobs and improving public health.

He also said it sends a message of ‘certainty’ to construction that there will be a steady stream of renovations in the years to come.

Varadkar said people trained in the construction industry can learn to do renovations in a matter of weeks.

Environment and Climate Minister Eamon Ryan said small businesses in Ireland “would be competing with each other” to get the business.

Officials believe the program will have a positive impact in rural areas and for small entrepreneurs.

Cost certainty for households

To apply for these grants, households will contact a “one-stop-shop” company via a list that will be available on the SEAI website in the coming weeks.

This company will do the work from start to finish, again intended to simplify the process for homeowners. These “one-stop-shop” companies will be accepting applications through the grant program in the coming weeks.

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Electric Ireland Superhomes is one of a dozen such organizations in the country that focus specifically on deep renovations.

Managing Director Stephen O’Connor said The newspaper that it is accepted that in-depth renovation is “now the real way to tackle the poor energy performance of domestic buildings”.

He said around 1.5 million homes needed “serious work” and any homes built before 2006 needed upgrading.

“There’s also a growing acceptance that the best way to do it isn’t those little individual steps, but to do it once and do it all over the house,” he said.

Previously, under the SEAI program, owners had to pay the full cost up front and then claim the subsidy portion.

Under this program, the consumer will only pay their share and the provider will process the subsidy application and claim the money from the program, which O’Connor says will make the process easier for households.

Applications are made through SEAI. The organization said this morning that it experiences high call volumes.

Contains reporting by Michelle Hennessy.

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