Ossian Smyth (Dún Laoghaire, Green Party) | Oireachtas source

I thank the Deputies for raising this issue. I am delighted there is so much interest in retrofit. There was not always such interest. In the past, when retrofit schemes were proposed there were cynical responses about how many years it took for the payback. Those calculations about how long it took for payback were based on assumptions about the future price of electricity and gas. We have since found out that those assumptions were wrong.

In February last, the Government introduced a dramatic new retrofit scheme which allowed for grants of up to 80% for those measures which were the most effective, in other words, attic and wall insulation. The response to that change has been huge. There is no need to sell retrofit to the public. Everybody knows what it is now and everybody wants it. That scheme was introduced in February before the war started. The element of the war that Ireland is involved in is the response to the sanctions against Russia. Putin's response has been to attempt to divide Europe, make us fight against each other and crush our solidarity and resolve. I am glad to see we are all on the same page as regards the need to reduce our emissions and consumption, which is even more important than adding more energy to the grid.

I will quickly update Members on the retrofit scheme. At the end of August, more than 30,000 applications had been received by the SEAI, which is a 140% increase on the level that was seen in the same period last year. Applications for the new enhanced attic and cavity wall insulation grants tripled compared with the same period last year. These are highly cost-effective upgrade measures and they will help homeowners to save energy this winter. We are talking about an expenditure of between €300 and €400 for a home. Applications for heat pumps and external wall insulation are up 80% and 40%, respectively. In addition, demand for solar photovoltaic schemes has been extremely positive this year.

While driving demand is important, delivering the retrofits is even more crucial. In regard to what has been delivered so far, the SEAI target for this year is 27,000 home energy upgrades. The latest projections from the SEAI indicate that this challenging target will be met. This means 27,000 families will be made cosy in their homes. Figures for the end of August show that 13,400 homes had been upgraded across the SEAI schemes. This compares with a total of 7,900 for the same period in 2021. More than 4,200 of these homes are upgraded to BER B2 or better and this compares with a total of just under 1,800 for the same period in 2021, not ten as one Deputy stated earlier. Under the solar PV scheme output for this year, we will exceed the target for PV to deliver 6,600 solar roofs. Demand and delivery under the new national home energy upgrade scheme have also been robust, with a pipeline of work for the remainder of the year and into 2023. There are currently 11 one-stop shops registered. A 12th is expected to be announced shortly and another 14 organisations are at various stages of the registration process. We expect to have about 20 one-stop shops registered by the end of the year, which was the target.

The Government recognises that even with the enhanced grant rates, many homeowners will need to access finance to fund their upgrade.

For that reason, my Department is engaging with the Strategic Banking Corporation of Ireland, SBCI, and the European Investment Bank, EIB, on the development of a residential retrofit loan guarantee scheme. This scheme will enable credit institutions to offer loans with reduced interest rates to private homeowners and non-corporate landlords and will make comprehensive home energy efficiency upgrades more affordable to the public. It is intended that the loans under the guarantee will be available in the coming months.

More than 2,400 homes have already been completed under the warmer homes scheme this year. That is nearly three times the number of homes completed in the same period in 2021. The retrofit works delivered under the scheme are extensive. SEAI data show an average investment of €18,750 per home retrofitted under the scheme in the first half of the year. Month-by-month delivery of free energy upgrades under the scheme has doubled since last year and has reached the target of 400 completions per month. To sustain and build on this progress, the following actions have been taken. First, the SEAI has been allocated additional staff to administer the scheme. Second, additional funding has been sought from the European Regional Development Fund, ERDF. Finally, the SEAI has completed a 4% increase in costs for all contractors from June in order to address the ongoing supply chain challenges.

In line with the national retrofit plan's principles of fairness and universality, there is a need to ensure that all housing types and consumer cohorts can participate. For this reason, specific measures to stimulate retrofit activity among approved housing bodies and in the private rental sector were also included in the package of measures which the Government announced in February.

The residential rental sector poses a particular challenge and in this sector the incentives to invest in energy upgrades are misaligned between landlords and tenants. This impacts negatively on the energy performance of the sector. This complex problem is seen in many countries and is referred to as the "split incentive". To address this issue, non-corporate landlords are eligible for the new grant supports available under the national home energy upgrade scheme, the better energy homes scheme and the community energy grants scheme. It is also intended that non-corporate landlords will be able to avail of the planned low-cost loan scheme for retrofit when it is launched in the coming months.

A further key step associated with addressing this issue for tenants will be the introduction of a minimum BER rating required for rental properties for all landlords. The Housing for All strategy, which is being led by my colleague, the Minister for Housing, Local Government and Heritage, includes a commitment to introduce this requirement from 2025. Collectively, these measures will mean that the national housing stock is upgraded and tenants get lower energy bills and a more comfortable place to live.

There are approximately 36,500 local authority homes which will be retrofitted in the coming decade under the local authority retrofit scheme. This programme of work will not only benefit local authorities in assisting them in the upgrade and maintenance of their housing stock but will also directly benefit householders with an enhanced level of comfort and lower fuel costs. This year, the energy efficiency retrofitting programme will see approximately 2,400 local authority homes nationally being upgraded to a B2 or equivalent standard, with a significant increase in funding support to local authorities to €85 million. That compares with just two years ago when funding of €25 million was provided for local authority retrofits. When moving from funding of €25 million to funding of €85 million, staff must be provided. Staff were provided in every local authority in the country to carry out that work. These are trained retrofit engineers. It is right that this funding of €85 million is targeted towards local authority tenants who are at risk of energy poverty.

While it is important, retrofitting on its own will not address the cost-of-living challenges faced by homeowners across the State. The Government now intends to build on the €2.4 billion package of measures already in place to support people to meet the cost of energy in the forthcoming budget. A new action plan to combat energy poverty will set out a range of measures to be implemented ahead of the coming winter, as well as key longer term measures to ensure that those least able to afford increased energy costs are supported and protected.

I emphasise again the critical importance of the role of the Commission for Regulation of Utilities, CRU, which oversees non-price aspects of competition and continues to take steps to increase transparency, customer protection and consumer engagement in retail markets. In August, under response No. 6 of the national energy security framework and following engagement with customer representative groups, energy suppliers and network operators, the CRU announced enhanced consumer protection measures. These include, an extension to moratoriums on disconnections, a reduced debt burden on pay-as-you-go meters, better value for those on financial hardship meters and the promotion of the vulnerable customer register. These are important additional protections for consumers during a very challenging time.

As outlined, this Government has set ambitious retrofit targets for Ireland for the end of this decade, including almost halving greenhouse gas emissions from the residential sector by 2030; upgrading almost a third of the country’s housing stock to a building energy rating of B2 or carbon equivalent; and installing 400,000 heat pumps in existing homes to replace older less efficient heating systems. This represents one of the most ambitious retrofit programmes in the world. However, under the national retrofit plan, we are making tangible progress. My officials will continue to work with the SEAI to build on the work to date. The operation of the schemes will be kept under review taking account of the overarching need to build a much bigger home upgrade sector, the evolving science, innovation and technology, and other relevant factors. We want to ensure that grant levels continue to be appropriately matched to the costs that people pay.

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