Mr. David Flannery:

I thank the Chair and the members of the committee for the opportunity to present today. Declan Daly and I represent the Tipperary Energy Agency, a non-profit social enterprise with 26 staff supporting the low-carbon energy transition. Tipperary Energy Agency has been successfully retrofitting homes throughout Ireland since 2005. SuperHomes Ireland was created by the agency in 2015 with the aim of becoming a one-stop shop for home energy retrofit.

The European Commission and Parliament have identified the importance of one-stop shop solutions where homeowners can get advice, access to contractors, quality control, grants and finance, all in one place. By the end of 2019, SuperHomes will have worked on more than 160 deep retrofit projects to BER A3 standard or better, and a further 59 homes to B2 standard.

The increase in carbon taxation and the target of 500,000 homes to be retrofitted to a minimum B2 standard, as set out in the national climate plan, will have a profound effect on how citizens approach energy in their home. A high-quality retrofit product, on the scale proposed, will require significant investment in developing skills and standards in the sector. This can be supported by a predictable long-term funding programme, which will also help with disseminating a clear message to the public and allow people to plan for their retrofit. Financial packages, with low interest rates, tailored towards deep renovation will be necessary to build significant scale in the market.

Not only does deep renovation improve the long-term health of occupants, decrease energy costs and reduce carbon emissions, it produces high-quality job opportunities. The deep renovation of one home supports an average of one job per year in terms of direct, indirect and induced jobs. The SEAI deep retrofit pilot programme has demonstrated that there is an appetite in the industry. However, major skills shortages are already restricting delivery of retrofit projects and driving up costs. Addressing this shortage of skills will be key to maintaining a high-quality retrofit product that produces positive connotations in the public mind, thereby encouraging uptake. Our model involves working with local engineers and contractors to build capacity in that area and provide technical and funding support to these projects. We will be working with 29 separate contractors in 2019. This approach and the approach taken by other independent energy agencies and community programmes will continue to be an important component in capacity development and industry training. However, a widescale roll-out of deep renovation is fully reliant on an escalation of training programmes and standards, including new standards in training for heat pump installation.

A year-round, predictable, funding programme offers assurances to contractors, engineers and tradespeople that it is worthwhile to focus their resources towards deep renovation and will encourage businesses to enrol their staff in high standard training programmes. At present, deep renovation programmes heavily concentrate project delivery in the period from June to October, creating a virtual standstill in delivery during the months between November and March. A long-term programme will address this resource imbalance faced by contractors and service providers. A complicated application process and short timelines for delivery create uncertainty and risk, which restrict market development and ultimately make Ireland's targets more difficult to achieve. In our view, the State should prioritise de-risking renovation rather than increasing financial incentives to unaffordable levels. A reliable funding model will also make the dissemination of grant supported solutions to the public much more straightforward, with the benefit of greater citizen engagement in the transition.

Low cost finance tailored towards deep renovation will be a theme that will emerge across the board today. From our direct engagement with homeowners, it is evident that the finance offer has to make sense to members of the public at an instinctual level. The question is whether they will be happy to upgrade their homes from a D rating to an A rating, for an additional €2 to €4 per day or €100 per month for ten years, and repay the capital investment by the end of this term. If we want to scale the market, we need affordable financial packages for homeowners, tailored towards deep renovation. Successful schemes, such as the German KfW renovation programme, offer finance between 2% and 4%. A long-term, predictable retrofit programme will undoubtedly create a more favourable lending environment.