Retrofit grants: €25,000 offered to households to help insulate homes

State to contribute half of cost of insulating homes up to high BER rating of B2

Grants of more than €25,000 will be offered to individual householders to help pay for deep retrofits of their homes as part of the biggest home insulation scheme ever offered in the State.

Minister for the Environment Eamon Ryan will announce details on Tuesday of the new Home Energy Upgrade Scheme for private homes that will cover close to half the cost (45-51 per cent) of a deep retrofit that would improve a dwelling’s energy efficiency to a high B2 rating.

One of the biggest barriers for householders until now has been the high upfront construction costs associated with improving poorly insulated buildings.

Senior sources in government have confirmed that under Mr Ryan’s flagship programme, sizeable grants will be available to qualifying homes. The State will, for example, contribute €26,000 of the €53,000 cost of deep-retrofitting works on an average hollow block semi-detached home with an E2 rating. Bringing the rating from E to B would reduce the heating bills by as much as two-thirds, leading to substantial savings each year.

The programme for government has set itself ambitious targets of retrofitting 500,000 homes to B2 standard by 2030 and to install 400,000 heat pumps. Almost €5 billion of the €9.5 billion in additional funds raised by carbon taxes will be targeted at home efficiency.

A key part of the plan will be a network of “one-stop shops” throughout the State that will offer a simplified end-to-end service for homeowners. It would cover the application process, access to finance and construction work.

In addition to the grants, it is understood the Government will also offer low-interest loans to homeowners.

Although the Government’s main focus is on deep retrofits, there will also be 80 per cent grants available to households who opt for more minor work, such as insulating attics or cavity walls, reducing the overall cost of such works to as low as a few hundred euro.

Fixed grants

The new scheme will be brought to cabinet by Mr Ryan, the Green Party leader, on Tuesday for approval by ministers.

The scheme will pay out fixed grants for each measure that gets done such as the installation of heat pumps, ceiling and wall insulation, work on external doors and openings.

The Irish Times understands an expanded system of free energy upgrades will also be available for low-income households that are at risk of energy poverty.

“The level of grant funding we are talking about here is unprecedented. We are talking about not just cutting heating bills this year but every year into the future,” a source for the Green Party in Government said on Sunday.

A total of €352 million has been allocated towards energy upgrade schemes this year but the funding will be ramped up over the coming years as the rollout intensifies. In all, €8 billion has been allocated under the National Development Plan up to 2030 with the aim of delivering 500,000 home energy upgrades. However, the overall bill for retrofitting that number of homes would work out at €25 billion, based on an average of €20,000 per home.

“The certainty around the NDP funding will give the construction sector confidence to really get behind this. They can hire extra staff knowing the money is there into the future,” the source added.

“Low-interest loans for this work will also be announced later this year. Coupled with the higher grants on offer, the loan repayments are likely to be similar to the savings people will see on their bills. This will give people warmer homes for very little cost.”

Energy prices

Separately, Taoiseach Micheál Martin has insisted there will be no “mini-budget” to address the challenge of a spike in fuel and energy prices, in effect ruling out any reductions in VAT or increases in social welfare. He indicated a Government package to alleviate rising costs for families would be announced by the end of the week and would focus on the possible reductions of charges for utilities or other services.

He said there had to be “a balance between targeting and also speed, because we understand that people are suffering from the impact of inflation right now”.

“We will be looking at a range of charges that impact on people, particularly health charges, transport charges to see what we can do quickly. Some may be once-off, some may be more sustainable in terms of reducing charges for people,” he told RTÉ Radio 1’s This Week programme.