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27 Sept 2022

EXPLAINER: What's in the new €8 billion National Home Energy Upgrade Scheme?

Government outlines plans

EXPLAINER: What's in the new €8 billion National Home Energy Upgrade Scheme?

Insulation is one of the measures supported

The key measures include:

  • A new National Home Energy Upgrade Scheme providing increased grant levels of up to 50% of the cost of a typical deep retrofit to a B2 BER standard (up from 30%-35% grants currently)
  • One Stop Shops to offer a hassle-free, start-to-finish project management service, including access to financing, for home energy upgrades
  • A significant increase in the number of free energy upgrades for those at risk of energy poverty (400 per month – up from an average of 177 per month in 2021)
  • A special enhanced grant rate, equivalent to 80% of the typical cost, for attic and cavity wall insulation for all households, to urgently reduce energy use as part of the Government’s response to current exceptionally high energy prices
  • An Exchequer investment of €8 billion to 2030 will enable the supply chain to scale up, creating thousands of high quality jobs and delivering on this critical national objective
  • The Schemes will be administered by the Sustainable Energy Authority of Ireland (SEAI). The increased grant supports and the significant ramping up of free energy upgrades for those at risk of energy poverty is supported by ring-fenced funds from the carbon tax.

The main features are as follows:

New Home Energy Upgrade Scheme – to transform your home

The new National Home Energy Upgrade Scheme offers increased grant levels of up to 50% of the cost of a typical B2 home energy upgrade with a heat pump (up from the current level of 30-35%). The scheme introduces a hassle free way to undertake home energy upgrades with One-Stop-Shops providing an end-to-end service for homeowners. This includes surveying the home; designing the upgrades; managing the grant process; helping with access to finance; engaging contractors to deliver the work; and quality assuring the work.

Homes owned by private homeowners, non-corporate landlords and Approved Housing Bodies are eligible for the scheme. This provides an unprecedented opportunity for people all over Ireland to upgrade to a warmer, healthier and more comfortable home, with lower energy bills.

Increased grant rates and supports for step-by-step home upgrades

Grant supports (under the Better Energy Homes Scheme) for homeowners that want to take a step-by-step approach to upgrading their homes have also been significantly increased. For instance, the grant for heat pumps has increased from €3,500 to €6,500 and the rate for external wall insulation has increased from €6,000 to €8,000 for a detached house. These figures specifically relate to grant amounts for this step-by-step approach.

The full list of measures and grants is available at this link: https://www.seai.ie/grants/ home-energy-grants/

Free home energy upgrade: Protecting people at most risk of energy poverty

The Warmer Homes Scheme offers free energy upgrades for eligible homeowners who are most at risk of energy poverty. Since 2000, over 143,000 free upgrades have been supported by the scheme.

A budget allocation of €109 million has been provided for this scheme this year. This will support an increase in the number of free home upgrades, from an average of 177 per month in 2021 to 400 per month this year, helping to reduce waiting times. The scheme will also target the worst performing properties, by prioritising homes that were built and occupied before 1993 and have a pre-works BER of E, F or G. Existing applications will not be affected by this change. For the first time, applications will be accepted from qualifying homeowners who previously received supports under the scheme, but who could still benefit from even deeper measures. The scheme eligibility criteria will also be extended to include those in receipt of the Disability Allowance for over 6 months and have a child under 7 years.

Grants, equivalent to 80% of the typical cost, for attic and cavity wall insulation

Grants for cavity wall and attic insulation will more than triple, as part of the Government’s response to the current exceptionally high energy prices. For instance, in the case of a semi-detached home, the attic insulation grant will increase from €400 to €1,300 and the cavity wall insulation grant will increase from €400 to €1,200. These are highly cost-effective upgrade measures that can be deployed rapidly and at scale this year. It is expected that these works will pay back in 1-2 years in most houses.

The new grant rates will cover approximately 80% of the typical cost of these measures and will be available to all homeowners.

Community schemes: Improving buildings across the country

Under the Community Energy Grant Scheme, grants are available for public, commercial and community buildings. These include buildings within housing associations and local authorities; rental properties; and buildings belonging to public sector organisations. The total budget for this scheme will be €43 million in 2022 (of which approximately €15 million will relate to home retrofits). Grants of up to 80% are available under this scheme – for private, energy-poor homeowners.

Long-term funding commitment: Providing certainty for the home energy upgrade sector

Retrofitting our housing stock is a key element of the Government’s plans for economic growth and development. The unprecedented €8 billion of National Development Plan funding (including €5 billion in carbon tax revenues) available to support residential upgrades (to 2030) will stimulate the creation of high-quality jobs throughout the country. It will also have a significant multiplier effect, supporting the development of associated supply chains. This will help to support a just transition to a carbon neutral society.

A total of €267 million (of which €202 million is carbon tax receipts) has been allocated for SEAI residential and community schemes in 2022. This investment will support almost 27,000 home energy upgrades, including over 8,600 homes to a BER of B2 (a near doubling of B2 output over 2021) and 4,800 free energy upgrades for households at risk of energy poverty.

In addition, €85 million funding has been provided by the Minister for Housing, Local Government and Heritage for the Local Authority Energy Efficiency Retrofit Programme. This investment is targeted to deliver 2,400 B2 (or equivalent cost optimal) upgrades this year.

Of the total Government retrofit budget of €352 million, €203 million (58%) will be spent on dedicated energy poverty schemes and local authority retrofits.

National climate action goals

The suite of home energy upgrade programmes announced today will be central to the achievement of our broader climate targets, as a country. The Climate Action Plan 2021 set a goal to reduce greenhouse gas emissions from the residential sector – from 7 Mt CO2 eq. in 2018 to between 3.5-4.5 Mt CO2 eq. in 2030. Today’s announcement is a key step on this journey. An evidence-informed approach will continually inform the scheme design over time, ensuring that the best supports are in place to support homes across Ireland to be more energy efficient and, ultimately, to decarbonise.

Estimates compiled for the Department of the Environment, Climate and Communications indicate that the cost to retrofit the fabric of a house to a BER B2 and install a heat pump can range between €14,000 and €66,000. More information is available on today’s announcement, as well as details of the schemes, supports and grant rates, is available at this link: https://www.seai.ie/grants/ home-energy-grants/.

The National Retrofit Plan, published last November, sets out how the Government will deliver on our retrofit targets. The plan is designed to address barriers to retrofit across four key pillars: driving demand and activity; financing and funding; supply chain, skills and standards; and governance. For each pillar, barriers were identified and time-bound policies, measures and actions were put in place to address them. The initiatives in the plan were guided by a number of key principles:

 

•                    Fairness – ensuring fairness to all and supporting a just transition;

•                    Universality – covering all housing types and consumer segments / income deciles;

•                    Customer-centric – designing customer-centric solutions to reduce the costs and hassle, making the process easier for those investing in retrofits;

•                    Cost-optimal – encouraging retrofits to cost-optimal level and maximising emissions abatements;

•                    Industry-led – stimulating and supporting industry confidence to invest, grow and take on more workers.

 

The National Retrofit Plan makes it clear that new and improved SEAI grant schemes will be a central element of the Government’s strategy to encourage homeowners to upgrade their homes. The suite of initiatives announced today represents the most significant reform of SEAI grant schemes since their establishment and are tangible examples of delivery on commitments in the Climate Action Plan and National Retrofit Plan.

The National Retrofit Plan commits to the establishment of a cross-departmental steering group, chaired by the Department of the Environment, Climate and Communications. This group will be established in Q1 2022 and will oversee and monitor progress against our national targets and develop new initiatives as required.

Typical case-studies: Impact of the new grants 

One of the most ambitious retrofit programmes worldwide

The new Home Energy Upgrade Scheme follows extensive research and consultation. The 2030 target encompasses 30% of Ireland’s housing stock. This is among the most ambitious retrofit programmes worldwide in terms of underpinning policy development analysis, scale of ambition and in terms of commitment of Government funding (from ring-fenced carbon taxation).

Closure of the Warmth and Wellbeing scheme

Following a successful study with over 1,300 homes upgraded, a report is being prepared by the London School of Hygiene and Tropical Medicine, due in in April 2022. Given that the research element of the scheme has now closed to participants, having reached a sufficient number, new applications for the scheme will cease on 28 February. Existing applications will receive their upgrades and the Warmth and Wellbeing budget will be transferred to the Warmer Homes Scheme.

 

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