Dr. Brian Motherway:

I thank the Chairman and committee members for their invitation. I do not propose to read the written statement we submitted which sets out our presentation in detail. Instead, I will highlight the points we would like to make and we will be happy to discuss other aspects in more detail.

We represent the Sustainable Energy Authority of Ireland and today our focus is on energy efficiency in buildings, in particular, an area of activity that has grown strongly in recent years, with many home owners, businesses and public bodies acting to reduce their energy costs through energy efficiency measures and in the process reducing their environmental impact. To provide a sense of the scale of the sector, driven by Government grants we administer on behalf of the Government, more than €250 million was spent in Ireland last year on energy efficiency measures. This activity supported more than 5,000 jobs. By our reckoning, energy efficiency actions in the past few years have, in total, reduced Ireland's annual energy bill by more than €500 million.

I propose to make a few points on energy use in homes and the trends in that regard, talk a little about building energy ratings and provide an update on some of the work being done on energy retrofitting in buildings. Buildings in Ireland account for over 40% of national energy use and are, obviously, a large user of energy. Homes, probably, account for the largest proportion of this, accounting for 27% of all the energy we use. Within a home, approximately 80% of the energy is used in heating the space and the water, while the other 20% is used in providing electricity for appliances and lighting, etc. Energy use in homes has been steadily declining for many years, driven in the main by the building regulations. A new home built today will use only approximately 25% of the energy used in a home built in the 1970s, which gives some idea of how much has changed. We are at a point where we can envisage quite soon what we might call "near zero energy" buildings which virtually use no energy. The improvements in the energy performance of new buildings put an additional focus on the retrofitting of homes built in previous eras in order to improve their energy performance. I will return to that issue.

On building energy ratings, members of the committee will be familiar with the building energy rating, BER, certificate which is obligatory when a home is offered for sale or rent. This certificate has been in use since 2006 when the European Union's energy performance in buildings directive was transposed. Oversight of this certification is shared between the SEAI and the Departments of the Environment, Community and Local Government and Communications, Energy and Natural Resources. The SEAI has been designated as the issuing authority for BERs. This means our responsibilities cover developing the methods by which BERs are calculated, registering and ensuring the quality and competence of assessors, holding the national register and database of all building energy ratings carried out and published and performance and awareness.

To date, approximately 330,000 building energy ratings have been carried out and formally published, most of them for homes but some for non-residential buildings. Approximately, 1,000 building energy rating assessors are registered with us to carry out assessments. In 2010 the overarching directive for this area, the energy of homes and buildings directive, was recast and a number of changes are on the way, one of which will commence in January. From that date, the BER will not just be mandatory as part of the sale transaction but must also be displayed in all advertisements relating to the sale and letting of property. This will bring a new profile and awareness to the rating and help people to make decisions.

Ireland's approach to the building energy rating certificate has always been to use this instrument in a positive way, not just to see it as a compliance tool. It understands its usefulness in bringing the energy performance of homes and other buildings to people's attention, perhaps allowing them to factor it into their decision making when buying or renting a home. The rating also lets them know what is possible in terms of improving a building's performance and lowering costs. We provide a building energy rating as part of our retrofitting grants scheme, Better Energy Homes, which provides home owners with a formal measure of the improvements they secure when they upgrade their homes with the support of Government grants.

I now turn to the issue of retrofitting existing buildings. I have mentioned that with standards for new buildings having improved so much in recent years, much of the policy focus is now on how to improve the energy performance of the large number of buildings built in previous times which could benefit from significant improvements in their energy efficiency performance.

The retrofit idea is now well understood, namely that existing homes can have their insulation and heating systems upgraded and hence benefit from significantly lower energy bills, as well as improving their environmental impact. We deliver a number of programmes on behalf of Government and they have delivered directly, or supported via grants, the retrofitting of about 250,000 buildings and all of the benefits that accompany that, including lowering energy bills, making energy more affordable, bringing greater comfort to homes as well as the wider societal benefits such as reduced fossil fuel imports and reduced carbon dioxide emissions. It is also a very important sector for job creation, with approximately 5,000 people fully employed in the various retrofit programmes that are going on at the moment.

Better energy homes is the most well-known grant scheme, under which people can apply for a grant that is the equivalent of 30% of the cost of a range of measures they can carry out in their homes. That scheme has been operational since 2009 and to date we have grant-aided more than 130,000 homes to improve their energy performance. In tandem, the better energy warmer homes scheme offers direct provision of home energy upgrades, free of charge, to vulnerable households and to date, since the beginning of that programme, we have upgraded approximately 90,000 homes. Finally, in 2012 we introduced a new programme on a pilot basis called better energy communities, which tests the delivery of innovative energy efficiency upgrades at community level, under which we engage with a number of people in the residential, commercial and public sectors together as a community rather than as separate entities. This year we supported 18 projects in that sector and we hope to see that part of our work grow in the coming years.

We are now at a point at which the benefits of improving the energy performance of the building stock are quite clear and activity and awareness has grown in recent times. In terms of where we go next, the issue is one of scale. We want to see more buildings participating and we want to see them doing so to a greater level. By that I mean deeper retrofits, where the work that is done in a home is the best possible package of works to bring the home up to the highest standard; this is preferable to people just undertaking one or two smaller measures. In that regard, the idea of engaging in retrofit in a larger number of homes at a deeper level was highlighted recently by the National Economic and Social Council, NESC, in its report on climate policy, which highlights that the home sector is very important to climate change policy because home retrofits offer one of the largest and cheapest routes to significant reductions in carbon emissions in Ireland.

On the question of increasing the levels of participation, three issues are important. The first is quality; a lot of what we do in retrofit is about building consumer confidence so that homeowners, if they are contemplating a retrofit, can be sure that the service providers offering them upgrades will do a good job to a high standard and will deliver the benefits claimed. We put a lot of emphasis on enforcing quality and high standards among our contractors, as we do with other schemes such as the building energy rating, BER, scheme. We believe that the quality dimension is very important for building a fully functioning market. Second, at this point all energy supply companies have targets for energy savings to meet at a national level and we monitor their performance vis-à-vis those targets. This means that all of the energy supply companies, including the ESB, Bord Gáis and Airtricity, are now mobilised to generate retrofit activity in all sectors and are leading a number of new initiatives to encourage participation in retrofit. This area will grow in importance in building new levels of retrofit activity. Finally, the third issue is obviously finance. We know from our research - and it is obvious - that the biggest barrier to participation in grant schemes is that the homeowner has to pay two thirds of the cost and for a lot of people that is a fundamental no-no at the moment, in terms of availability of savings or their ability or willingness to access credit. If the market in retrofit is to grow, particularly in the context of the programme for Government's schedule to end grants by the end of 2013, we need to find new ways of helping people to finance retrofits. The solution we are seeking is to acknowledge that retrofits pay for themselves over a number of years in energy savings. In other words, the up-front cost of works in the home are more than paid for over several years by the energy savings that the homeowner experiences through lower bills. The concept of pay as you save as been introduced to find ways whereby, over a number of years, those energy savings that we know will happen can be directly linked to financing the up-front cost of the retrofit. At the moment we are working in earnest with our departmental colleagues on the development of a pay-as-you-save scheme for Ireland, which is in line with the commitments in the programme for Government.

In conclusion, significant progress has been made in improving the energy performance of buildings in recent years, both in new buildings and in older buildings through retrofitting. The concept is proven in terms of the benefits that accrue from that work and there is considerable further potential to improve our building stock and to capture all of the benefits that go with that, including job creation, cost reduction, greater comfort and affordability and environmental gains. That is the agenda we will continue to work towards. I thank the committee members for their attention and would welcome any questions they may have.