Retrofitting bill could come to average of €56,000 per home

Plans to cut the State’s greenhouse gas emissions by insulating 500,000 homes by 2030 will cost €28 billion, or €56,000 per family home, according to official figures.

The Climate Action Plan, unveiled by the Government this week, has an ambitious national retrofitting programme as a central plank of its strategy. It sets out a target to upgrade half a million existing homes to high energy efficiency standard s over the next decade.

The Department of the Environment has calculated that the cost of retrofitting a house to B2 standard (including the installation of a highly-efficient heat pump) would cost €14,000-€66,000, depending on the current energy rating of the house.

“Using a cross-section of the entire housing stock, this would imply a total cost of up to €28 billion for the retrofit programme,” the plan states. “These figures show the extent of the challenge as well as why affordability is frequently cited as the biggest barrier to retrofit among homeowners.”

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Of 18,400 homes retrofitted last year, only 4,000 were to a B2 standard.

At the launch of the plan this week, the three party leaders in government emphasised that the majority of the €125 billion cost would be borne by the private sector and by individuals.

This will also apply to retrofitting, where commitments from the public purse currently make up only a third of the funding. A total of €5 billion has been allocated to support residential retrofitting from future carbon tax revenues, while an additional €3 billion will be made available from exchequer funds. The department described that investment as “unprecedented” but it will still leave a substantial shortfall.

Low-interest loans

The department is hoping a hybrid model combining grants and low-interest loans will entice homeowners to upgrade their homes. It is relying on consumer research that shows that almost half of homeowners would consider taking out a loan to pay for energy efficiency improvements.

The details of the funding model will be disclosed when the national retrofit plan is launched early next year. It will include a low-cost loan scheme in conjunction with the Strategic Banking Corporation of Ireland and the European Investment Bank.

Minister for the Environment Eamon Ryan said on Friday that the retrofit programme would present a challenge but would be transformative for people's homes.

“The real winning thing here is comfort, health, the value of the home going up,” he said. “Irish people do invest in their homes. It’s about getting communities involved and getting whole streets doing it together.”

He said the investment in one-stop shops, grants, the loan scheme, 120 extra staff in advisory roles in the Sustainable Energy Institute of Ireland, as well as thousands of new specialists workers in construction, would help deliver the plan at scale.

"It will take a while to ramp up but I always like that Bill Gates quote: 'People overestimate what you can do in a year but underestimate what you can do in a decade.' "