Tuesday, 2 December 2008
Question 75: To ask the Minister for Communications, Energy and Natural Resources if he has new plans to extend a grant or incentive to improve the energy efficiency of existing properties; and if he will make a statement on the matter. [44088/08]
The home energy saving scheme implemented by Sustainable Energy Ireland, SEI, will make grant assistance generally available from next year to householders to install energy efficiency measures. The objective of the scheme is to significantly reduce energy use and emissions in the residential sector by incentivising households to upgrade the energy performance of their homes. I launched the scheme on a pilot basis earlier this year in a selected number of areas and with a budget of €5 million.
Under the pilot phase, grant aid is being provided for cavity wall insulation, wall lining insulation, external insulation, attic insulation, heating controls and low emission double glazing. The results of the pilot phase are informing the design of the national roll-out of the scheme in 2009, for which provision of €20 million has been made in my budget. First results from the pilot phase indicate that the targeted supports can bring a house from an F-rating starting point on the building energy rating scale to a D2 rating. This represents an energy saving of up to €700 per year for each house, equating to reduced carbon emissions of 3 tonnes per year.
The warmer homes scheme is overseen by Sustainable Energy Ireland and is delivered principally through community-based organisations. There now are 20 such groups currently approved by Sustainable Energy Ireland. The scheme is targeted at households on low income. The warmer homes scheme installs insulation, draught proofing measures and energy saving light bulbs. Advice is also provided to householders on minimising energy use. These measures are provided free or at a nominal cost. Householders in receipt of energy efficiency improvements under the scheme potentially can reduce energy consumption by up to 60%, depending on the number of measures implemented and their energy behaviour.
I doubled the funding for the warmer homes scheme this year, allowing for a corresponding doubling of the number of homes upgraded this year to 5,000. Funding of €10 million has been made available for this scheme in 2009, which includes a total contribution of €5 million between the ESB and Bord Gáis. This will allow for a significant further extension of the scheme.
On a point of information, the map distributed by the Department of Communications, Energy and Natural Resources shows that no broadband is available in the part of north County Wexford in which I live. For the Minister's information, there is only dial-up.
Following on from the pilot programme, the 2009 allocation of €20 million shows a decided lack of ambition. This is sad because I believe the Minister and his colleague from the Green Party, the Minister, Deputy Gormley, are eager to try to implement such measures. However, the Minister, Deputy Ryan, has not shown strength of character by standing up to fight for additional funds. Were the Minister to be allocated more than €20 million to spend on this measure, it would enable him to adopt a carrot and stick approach regarding the many homes that are more than ten years old and are very poorly built and insulated and so on.
Is there scope to try to expand the fund of €20 million, especially as, apart from the warmer homes scheme to which the Minister referred, he also finished off the greener homes scheme. Consequently, no real additional funding is available, which is disappointing from someone who espouses views that he intends to improve the energy efficiency of properties.
As no one has finished up the greener home scheme, that point does not stand. In order to get this right, our approach was correct, namely, to start with a pilot and test it out because this is highly innovative and different from what applies elsewhere. I believe the home energy savings scheme is exactly right. I am told by Sustainable Energy Ireland that expanding it to €20 million next year demonstrates an appropriate level of ambition in respect of being able to manage the new assessors and the processing of the scheme. However, ambitions are not limited in that if there is a huge take-up, I would like to see it ramped up further because I believe it is the correct type of project with which the Government can generate economic activity at present.
A key development is the State's involvement will not constitute the only expenditure in this regard. I have been in discussions with the banks to ascertain whether it can be made more easy for householders to be given credit for such a project. The State's input may constitute 20% or 30% of the total. For example, in a €10,000 build, the State's investment, in respect of supports, might be in the order of €2,000. However, other funding and financing will be available from the banks that will allow householders to do this more easily. Saving €700 per year is a brilliant payback and constitutes a really good lending investment, compared to some of the other lending that has taken place in recent years, which helps householders to cut down their emissions by approximately 3 tonnes per annum each, helps them to save on their fuel bills by approximately €700 per year each and provides Ireland with economic activity in an area in which none is taking place.
This scheme is perfectly appropriate for our times. I was proud to be able to introduce it and it is working in the areas in which it has been tried and tested and I look forward to rolling it out across the rest of the country.
The Minister's lack of ambition can only be described as startling. A grant of €2,000 for a house — any of those older houses — is not even a carrot on the stick; it is just a stick with the string and no carrot. Frankly, anybody who has an old property to be converted for energy efficiency will tell him that.
The question is coming. Can I pursue the matter of the Minister's discussions with the banks? How did he get on with the banks? Were they favourably disposed towards this when he was only offering €2,000 — I am using the Minister's figure, not my own? As I stated earlier, €2,000 is of no real benefit.
The banks were very enthusiastic about the scheme because they saw the sense of it.
This scheme is different. It is changing from a long tradition of just throwing a grant at a particular material that one buys. This is going about it in a different way. It is providing a service and providing financial support, not to any one product. In the past the price of such a product rose to the extent of the grant and no one gained. In such cases the householder pays more and the State just transfers money to the company making the product. This scheme is innovative in that the grant is going into the process, both in doing the assessment and also providing a percentage contribution to the work undertaken, and that is absolutely right.
What we have seen in the pilot scheme is that there is keen public demand for it at a time when it is not easy for people to spend or lend money. There is a keen interest in the banks to support it. We can put together a package of measures that has significant effect and that has not been tried anywhere else in terms of the level of sophistication and support provided.