Q&A: How will the new home-retrofitting grants work?

The Government has announced a multi-billion euro programme designed to deliver 500,000 deep retrofits to the country’s housing stock – about 30 per cent of the homes in the State. The Coalition says it’s among the most ambitious in the world – but what does it mean for you and does it make retrofitting realistic?

So, what’s new?

The brand new element of the scheme (there are important updates to other programmes, but more on that later) is the establishment of the National Home Energy Upgrade Scheme – designed for those who are interested in retrofitting their home to improve its energy efficiency and can partially fund it themselves.

What’s the difference?

The new scheme increases grants from between 30-35 per cent of the cost of a typical deep retrofit, up to 45-51 per cent. In cash terms, that’s likely to max out at about €25,000, if all the various grants are availed of to their maximum level. The Government estimates that the most a deep retrofit will cost is around €66,000 – that’s for bringing up to a B2 BER standard and installing a heat pump.

When will I be able to claim it?

The Sustainable Energy Authority of Ireland’s website is being updated with details of the grants available on Tuesday evening, and the scheme is to be launched immediately. So-called “one-stop shops” (more on this below) will be registered within about a fortnight, and homeowners can then make applications for upgrades.

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How will it be administered?

There are two main routes: firstly, doing it entirely through something called a “one-stop shop” (OSS). There are several of these outfits, which are usually private companies or community organisations, already working on existing schemes, and the hope is more will be encouraged into the market. A list will be put up on the SEAI website.

The OSS acts a bit like a lead contractor on a house renovation. They will conduct a home energy assessment (you have to pay for this, but if you do a full-scale retrofit, you can claim some of this back). They then provide a quote, and show you what grant aid is available for you.

If you proceed with this OSS (or, indeed, take the energy assessment to one of their competitors), they will handle the grant application for you and engage any subcontractors required. You also don’t have to fund the grant upfront and claim it back, it’s deducted before your final bill.

Sounds fairly painless. So far.

What about the rest of the cash?

This is where the rubber meets the road for most households. While the grant aid available is more generous, households can still expect to fork out the guts of €50,000 for a deep retrofit, half of it covered by grants. The remainder will have to come from your own pocket – pandemic-era savings, or more borrowing. There was some pre-launch chatter about a loan scheme, but it’s not ready to go yet. There’s likely to be movement on the loan scheme by autumn, and the intention is that it will be cheaper than market financing. But no white smoke on the specifics, just yet.

How much will that cost me, in real terms?

The obvious answer is it depends on how extensive your retrofit is, and how much you have to borrow. But at the upper limit, a €50,000 retrofit with a grant of €23,500 would leave you with €26,500 to finance. Examples drawn up by the department suggest a 10-year bank loan for the whole amount would cost in the region of €253 per month at 3 per cent interest – if such a low rate can be achieved. Once anticipated monthly energy savings of €83 are taken off, the loan would cost about €170 a month to repay over 10 years, or €50 per month over 20 years, at a lower interest rate of 2 per cent – again, if you can get that rate. Some uplift in the value of your home should be expected, as well as the benefits for the environment. Clearly there are a lot of moving parts – it depends what elements of deep retrofit you go with, the term and conditions of the loan, and so on, but this is what one of the more expensive retrofits would cost.

What if I don’t want to do a big bang approach?

It is possible to do things on a step-by-step approach, by taking the home energy assessment – this is the blueprint drawn up by a one-stop shop – and instead doing one step at a time, not going through the OSS and instead managing your own project in smaller chunks. The grants are the same, but fewer upgrades are covered. So, through the OSS, things such as windows, project management, ventilation and a grant for the assessment itself are available. You’ll have to fund these works yourself and claim back the grants, so it’s extra hassle on that front.

What other goodies are on offer?

There is a special enhanced grant being made available to cover 80 per cent of the typical cost for attic and cavity wall insulations. This is being characterised as an emergency intervention, and it’s hoped it might provide a sugar rush for the labour market, providing immediate demand as people deal with short-term pressures by contracting people to do a relatively low-intensity intervention. This will be operated through the Better Energy Homes Scheme, and up to 20,000 homes are expected to benefit.

Anything else?

There is a major investment in the Warmer Homes Scheme, which is targeted at households in fuel poverty. The aim is to clear the backlog in this scheme, and then to target it more narrowly to older homes. Households previously funded under the scheme will also be able to claim again for other works. There will be increases to community energy grant scheme as well.

How much is this going to cost the exchequer?

A lot. In the region of €8 billion – from €267 million this year, up to €2 billion in 2030.