Thursday, 17 February 2022
National Retrofitting Scheme: Statements
I propose to share some of my time with Deputy Leddin, the chair of the Joint Committee on Environment and Climate Action. I appreciate the chance to outline some of the measures which Government announced last week. I am glad our officials are here. They are responsible for much of the good work that has been done, particularly in the last year or two, to get us into position to launch this national retrofit scheme.
I will put it into wider context before going into some of the details of the various schemes. This is central to the climate change challenge we face. We have to stop the use of fossil fuels within three decades. We have to stop burning oil, gas, coal and peat to warm our homes, to power our transport system and in our power generation system. It is a huge challenge.
There are precedents. I was thinking about whether anything like this has been done and I am old enough to remember the early 1970s, when we switched to central heating. It became all the rage and, over two or three decades, we went from the open fire to central heating systems. It was an improvement and a better system. Some 97% of Irish houses now have central heating systems. We achieved that change and we need to make a similar leap in the next three decades. We will be using many of those central heating systems, maybe slightly bigger and with different radiators but it is the same concept. However, we will be using heat pumps rather than gas or oil boilers to heat our homes. This new heat pump technology has a huge advantage in the innate efficiency gain within it, as it converts the temperature differential between the air outside and inside the house through heat exchange to heat radiators to provide water for the home. That energy efficiency gain would be lost if the house was not also efficient at keeping the heat in. That is why we are looking in this three-decade challenge to bring our entire housing stock to B+ standard, so houses are well insulated, the heat pumps work efficiently at low cost and we reduce emissions.
This work was done cross-party. It does not belong to any one party. We all agreed this was a central objective in our climate plans going back a number of years. We will do it in a systematic way. We will do 500,000 houses this decade, 500,000 the next and 500,000 the one after that. We will be using district heating as well as retrofitting schemes. District heating will have a crucial role so it is not just these measures. Between the two, we need to halve emissions this decade, going from 7 million tonnes in our domestic heating systems to 3.5 million. That is what this plan and investment starts to do. It involves 500,000 homes and 400,000 heat pumps. It is about moving from shallow retrofit, which involves doing a bit of the job here and there, to deep retrofit, where the whole job is done.
The benefits of that are not just in climate. There will be huge benefits in the balance of payments for the country. At moments like this when international fossil fuel prices are high, we will be protected because we will rely on our local electricity rather than imported fossil fuels to heat our homes. Whatever happens on distant shores will have less consequence for us. It will be of huge benefit in employment, as I think Patricia King of the Irish Congress of Trade Unions acknowledged. I was at a conference that congress organised a number of years ago where it estimated that 27,000 workers or so would be needed. Good, well-qualified, well-paid, union-type jobs are expected to deliver this all over the country, distributed in a way that will benefit rural as well as urban Ireland.
It will have a huge health benefit. One part of the national retrofit plan we are working on is analysis of a large number of homes to see the health benefits of living in a home that is well insulated in this way and is not burning fossil fuels, which create all sorts of air pollution problems globally with climate emissions, locally in terms of air quality standards and in the home. The analysis is not complete yet but will be shortly. It is showing huge health benefits.
I have the good fortune that our house moved to this system a few years ago. We were able to do it when we were doing up our house. Living in a warm, well-insulated house that is heated without burning anything is an incredible quality of life benefit that is hard to describe until you know what it is like. You come down in the morning without fear that the house might be cold. It holds its heat. There is none of the hassle. I have not had to touch the heat pump for the last three years. It has been working away the same way a fridge works. It is similar technology. Fridges do not break down and heat pumps, similarly, do not require huge maintenance or cleaning and do not involve the same problems one gets with boilers and, certainty, open fires, where there is all the scraping, cleaning and hauling things in and out. This change will transform our country.
I know people are sceptical. I read Fintan O'Toole in one of the papers yesterday saying this could be the next mica scandal. I do not believe it will be. The Sustainable Energy Authority of Ireland, SEAI, has been at this for 22 years. We have been learning as we have been doing how to get the building energy rating, BER, systems right, how to check that the quality of the work is good and how to register contractors. I am confident that we have learned in those 22 years. We are not arriving at this without experience or backup. The Sustainable Energy Authority of Ireland has real skill and capability.
This is one of the things for which I am proud of the Government. The Minister for Public Expenditure and Reform, Deputy Michael McGrath, has been a supporter of this cause. I went to him last year saying the Sustainable Energy Authority of Ireland would need an additional 50 staff and he agreed straight away. They are in place now and another 50 will be employed this year. That is not an easy thing in government. Anyone with experience will know it is not easy to get agreement for staff in agencies or Departments. It was the same story in our Department. There was a huge increase in the staffing in this critical area of climate, energy and energy poverty alleviation. To allay Fintan's concerns, we are learning as we are doing, we have good people and this has been thought through at length. It is not a heat of the moment response to the energy price crisis but something that has been worked on for ages.
I did not hear it so I have to be careful but I think Tom Parlon from the Construction Industry Federation was on the radio asking if the Irish people would buy into this and suggesting the construction industry may not be interested in it. On both points, we may prove him wrong. The public response since our announcement last week has been beyond compare. There was something like a 13-fold increase in the number of emails we were getting. The SEAI website crashed when we announced this, such was the unprecedented volume of public interest. This is improving people's homes. There is nothing closer to their hearts than that.
The public will buy in, particularly when the grants we are introducing overcome one of the big obstacles in this regard, namely, making the maths work in order to enable this to happen.
Similarly, Mr. Parlon was concerned that the industry might not be interested in this change over. I do not agree. We have seen a similarly positive response in this regard. What we got wrong in the past 20 years was that the initiatives undertaken were all stop-start in nature. Grant allocations were provided in February, contractors worked through the summer and then downed tools and waited to see what money they might get the following spring. That is no way to build up and develop a good contracting business, so those involved rightly stayed small. Now, however, they know that the funding is available year-round and that it is guaranteed for the next ten years. It is guaranteed because we know that €5 billion is going to be made available for these grants to help make this happen. It is stitched into law as a revenue stream, and the contractors know the Government is serious about this undertaking now and that the funding will not be stop-start.
Equally, people raise concerns regarding whether the workers will turn up. The Minister for Further and Higher Education, Research, Innovation and Science, Deputy Harris, came to me yesterday and stated that there was concern about this but that his experience is that there has been a major take-up. Not only was there an increase in calls on the consumer side when this scheme was announced, but the same was the case regarding the apprenticeship programmes the Minister is setting up throughout the country. Young people and old are seeking to retrain and upskill in order to be good at retrofitting. A PhD is not required. It is not a seven-year process. Grants, such as the 80% scheme for attic and wall insulation that we are introducing, will allow people to start learning the basic skills required for this type of work. Their abilities can evolve from there. Once they have mastered the basics, people can move on to learning the skills required to work on exterior insulation, heat pumps and the other technologies that are part of this scheme. I am confident, therefore, that we can and will deliver the ambition of retrofitting 500,000 homes and improve them to the extent where they will be fundamentally transformed and made fit for purpose and healthy. Equally, the upgraded homes will be more efficient to run and protected against fuel poverty through this investment.
I will go through some of the details and then let Deputy Leddin contribute. I start with the key elements of what is new. The first aspect is the national home energy upgrade scheme, which involves moving to a building energy rating, BER, of B2, or above, which is a higher standard. It applies to any house constructed before 2011. Any house built since then should and will be at or above these standards already. There are several elements to this initiative. The first aspect is increasing the grants. The average grant levels were 30% to 35%. To get this scheme kick-started, it was decided to go up to 45% to 50%. It will vary. The grants are set at a certain level for particular technologies. For example, there will be a set grant for a heat pump, and for each element of the scheme. The benefit of this approach is that if people decide not to do a full retrofit, they will get the same grant for the element of the job they do undertake. Equally, if people are part of a community energy scheme, which is a concept that is really taking off and people are coming together on it, they will all know the collective grant amount. Even though there will be different situations in each house, they will be able to work out what the supporting benefit will be. This aspect then is concerned with increasing the grants to make the maths and economics work.
The next facet is the establishment of one-stop shops. Much work, time and thought has gone into this initiative. We expect about 21 such one-stop shops to start up in the weeks to come. Operators will bring together a range of services to make it easier for households to do this work. The one-stop shop, especially in the context of a deep retrofit, is the best way of getting the process right. It is a complex venture. None of us here know much about whether a heat pump is the right one or the right size or has the right energy performance. These one-stop shops will give householders the ability to undertake retrofit projects in a way that is regulated, checked and performed properly.
Turning to the warmer homes scheme, it has been operating very efficiently and effectively in the context of those houses at risk of fuel poverty and receiving fuel allowance payments. It is important that we have a social policy dimension to this and that we are targeting those at risk of fuel poverty the most. In total, we have €267 million from our budget this year. That will increase next year and every year, given the revenue becomes available from the carbon tax, and €85 million from the budget of the Department of Housing, Local Government and Heritage that will be targeting social housing. Between the two, approximately 58% of the overall budget, some €203 million, is going to be spent on grants for 100% of the cost to address the issue of fuel poverty. That is in addition to the range of other measures that we must undertake. The warmer homes scheme is greatly popular because of the 100% grant. Who would not want to avail of it?
We have built up a backlog. In the region of 7,000 households that have committed to and signed up to the scheme are waiting. We are going to clear list that in the next 18 months to two years. The backlog built up because of the impact of Covid-19 because it was not possible to go into people's homes. The registrations were coming in, but it was not possible to get out to do the work. We will clear that backlog, however. We will go from completing 177 houses a month up to approximately 400 a month and clear it that way. We will then focus on those houses built before 1993. The building standards went up in 1991, and from then onwards we would expect most houses to be at the standard of BER D or above. We want to get to those houses with ratings of E, F and G, which are typically older houses. That is where the issues of fuel poverty and health impacts are at their worst, and we really want to get in and do those. As a result, we will be targeting that area. We will also be widening the conditions for eligibility. The disability allowance is now being allowed as a qualifying category for the scheme and that will allow us to target such households. As well as broadening the areas eligible, we are also increasing the funding. The warmer homes scheme has an allocation of €108 million this year to allow us to clear the backlog. As I said, that figure will increase again next year. It will keep going at a steady volume so that the people carrying out the work will know that this business is going to keep growing.
There are other elements to this initiative. One key aspect is a response to the situation where we find ourselves with very high gas and oil prices. This is an 80% grant. It is targeted at those houses that might not have the funding to do the big retrofit, but that might be suffering from particularly high bills. I refer to projects such as deep insulation of the attic, as well as work on the cavity walls of a house, where gaps in the walls are injected with insulation and filled in. It is a relatively straightforward, quick and not that expensive job. It will vary from house to house, but it might cost €3,000 or so between both upgrades. The energy experts tell us that the benefits reaped are a quick reduction in energy needs. It could be up to 25%, and that would counterbalance the increase in prices that we have seen over the last year. We do not expect these prices to run into next year, but even if they did, this project will allow people to cover the costs of this type of project and give them some protection. It would be an initial step in the direction towards better homes and the other schemes available.
Other measures are coming and happening. The community energy grant scheme is the key one. I was out in an estate in Clondalkin where about 40 houses came together. When this type of project is undertaken collectively, it works really well. It is possible to get the costs down, to swap notes and to access expertise. That street in Clondalkin was able to retrofit the local community centre at the same time as they did their houses. They were doing the community buildings as well as the homes. Being able to place an order for 40 heat pumps rather than one makes it possible to start achieving real efficiencies and cost savings. Most of our houses and estates, and even houses in country areas, were built to common designs. That means it is possible to use aggregation, to bring everyone together and to get all the retrofitting done at the same time. People can learn from each other how the process works and what the benefits are. In that context, this community energy grant scheme is critical.
The other key innovation which is coming, and it will be happening in the third quarter of this year, is a new loans scheme. It will be particularly applicable for households opting for deep retrofitting and where they are providing some of the funding. Typically, it is half the funding. The thinking behind this came from the Strategic Banking Corporation of Ireland. It has been applied already in the context of Brexit, particularly for small businesses and farmers as a way of taking the risk out of a loan.
The concept is simple enough. They provide a certain capital. In this instance the capital will come from the European Investment Bank, EIB, and the European recovery and resilience fund. We targeted this as one of the uses of that European funding. We will create a mechanism whereby the risk of default will be covered for, let us say, the first quarter of the loans. That lending will be provided by that EU fund. The remaining loan may be provided by a variety of different lenders, such as An Post, credit unions or banks.
The beneficial and attractive aspect of this is that when a loan like that is de-risked, when the risk of default is removed, the interest rate is lowered. Typical interest rates are 6.5%, but how about if we could bring that rate down to 3.5% because this is such a large capital job and the payback timeframe will probably be 10, 15, 20 years? A low interest rate has a significant transformative effect in making the maths work, as I said earlier. That lending facility will be in place later this year. As it works, we could scale it up as well as use it in other applications. It is quite groundbreaking and it has taken time to set it up. The EIB has, as far as I understand having spoken to it, never been involved in a scheme in which it is involved with a householder. With European systems and funding, there are all sorts of checks required. We have to make sure it is spot on in terms of regulation and to ensure all the systems are in place. That is why it has taken us a few months to get it up and running, but we will get it up and running. It is critical due to the scale of this transition. In the national development plan, we allocated a total of €8 billion towards this. It is only a fraction of the amount of money we will have to spend. It is not just our housing. We have to retrofit our public buildings, our schools, Garda stations, nursing homes, and commercial buildings. There is a huge project in this. Starting with and getting it right in our homes is key.
I will say one final thing I have taken up pretty much all the time allocated. I will leave Deputy Leddin enough time for his contribution. The most important part in getting this right is the public response. Years ago, I had the great fortune to meet a brilliant Danish parliamentarian through EUFORES, the European parliamentarians for renewable energy and energy efficiency organisation. If Members wish to join EUFORES, it is still in existence. My colleague Ciarán Cuffe MEP is chair of the organisation. I had the good fortune to meet the Danish parliamentarian in the early 2000s when she was working on policy in this area. They were probably the leading thinkers in this area. She made a simple point. She said that this subject is very difficult because, by definition, it cannot be seen. If you invest in building insulation, you do not want it to be seen. This new exterior insulation, which works well, gives the effect that it is a new building. It creates a deeper alcove for the windows and it looks very clean. One would not know it was there. How do we get the political will and the public instinct on board, because it is not easy to take this leap by investing in this? Once insulated, we can forget about it. It is in the home forever and a day. It is, therefore, a better home.
We need to win over the public who believe it is a hassle or who say that they do not have the money or that borrowing is risky. It is about getting across that public initiative. I am of the view that we cracked it in the past week. I have never received as great a response from past initiatives we have done, as this initiative. People are realising that at a time when they are exposed to fossil fuel prices, this is the right thing to do. At a time when we want to be a part of tackling climate change, this is the home front and the front on which we can win. At a time when it is difficult for many people to get a home, a critical and significant crisis, could we not retrofit some of our older vacant buildings that are not being used and in doing so bring them back to life? Part of the town centres first plan is the restoration of old buildings that are underutilised. We can do both at the same time. For so many reasons, this is the key, brilliant project that we can all own. It belongs to every party. We need to get our constituents, and others, to fill in the form, go to the Sustainable Energy Authority of Ireland's website, look at and pick whichever options are right for them and make it happen.
I want to address the reasons as to why this retrofitting programme is so important. Why do we want to do this? There are many reasons. We want Irish people to live in warmer, healthier and more comfortable homes. In the context of health, asthma symptoms are reduced in warmer homes. Mould conditions increase the severity of asthma and retrofitting, particularly the ventilation aspect, reduces the conditions for mould to grow. Retrofitting results in less outdoor pollution and, therefore, fewer hospitalisations caused by strokes and heart attacks. The WHO says that improving indoor air temperature decreases mortality rates. More than €109 million of the Department's €267 million budget this year, is allocated to the warmer home scheme, which provides free energy upgrades to people who are in receipt of a social welfare payment, such as the fuel allowance, carers allowance, or working family payment. Some €84 million is dedicated to retrofitting 2,400 social housing homes this year, 50% grants are available for deep retrofits and 80% of the costs can be recovered on individual energy upgrades such as attic and cavity wall insulation, as the Minister said.
Another primary reason we should undertake this ambitious plan is because we want to reduce our dependence on imported energy. At present, 88% of our energy is imported and much of this is used to heat our homes. Reliance on imported energy leaves Irish people vulnerable to the vagaries of international energy markets, to geopolitical events over which we have no control. We are seeing that happen now on the other side of the European continent in the Ukrainian crisis. This escalation of military activity is driving the cost of natural gas to levels never seen before, and Irish people are paying these costs when heating their homes. We need to protect Irish people from this price volatility, not just this year with the €200 payment relating to electricity costs and the increased fuel allowance but we want to reduce the costs forever and for everyone, including the elderly, families, homeowners, and people in rented accommodation.
We must do this for critical environmental reasons. The planet is burning. Global temperatures are rising to levels never seen before and this will continue. Climate change is happening right now and it is causing catastrophic impacts throughout our world. It is set to get worse. It is set to threaten all life on this planet in the coming decades, within the lifetimes of our children and grandchildren. Climate change is caused by the burning of fossil fuels, such as natural gas and oil, to heat our homes and our buildings. The by-product of burning these fuels is the release of vast amounts of carbon dioxide into the atmosphere and trapping heat within it, thus causing the planet to heat up. In Ireland, about 7.5 million tonnes of carbon dioxide are released every year in this way. We must reduce that amount by half within this decade and bring it to nought by 2050.
Retrofitting is fundamentally about reducing and removing, in as far as possible, the need for energy to heat our homes. Homes that are built now are required to be built to the near zero energy building, NZEB, standard. Many new homes have gone further than this and have been built to the passive house standard. These standards for new homes are not enough to achieve what we need to achieve. We have to look at the existing housing stock and address energy dependence within it. That is what retrofitting is about. By reducing imported fossil fuel energy, we will take real and substantial action on climate, improve people's lives, reduce costs to our people and our country and we will protect ourselves from external shocks. It is a win-win-win situation.
There are 1.2 million homes in the State that need to be retrofitted. This plan will kick-start that enormous task. We will retrofit 500,000 homes this decade to B2 standard or higher. When a home is retrofitted, in most cases there will still be a requirement for energy, although the need will be greatly reduced. This residual energy demand in homes will be provided by renewable electricity, some of it through microgeneration such as solar panels on the roofs of homes, but most of it through our national grid as Ireland harnesses its vast renewable energy resources.
Home heating in new and existing homes will be electric, renewable and clean. The immense retrofitting challenge brings immense opportunity. We will need about 17,000 workers in this sector. Young people leaving school should think seriously about this path. We will need engineers, tradespeople and other construction workers. Those already in the workforce contemplating a change in career should consider this new, rapidly evolving sector. There is opportunity everywhere.
Retrofitting is about addressing the demand side of energy; the other side of the coin is the supply side. To fully address the challenge of climate change we should be and are looking at both. There are vast opportunities on both sides. Everybody in this House should understand that and the message should go across society. Ireland has shown itself to be a world leader in renewable electricity development. We will be world leaders in all aspects of energy, including retrofitting. This is an exciting plan which points Ireland to a cleaner and better future.
I welcome the opportunity to speak on the recently launched national retrofit plan. The plan restates the 2019 Climate Action Plan target of 500,000 deep retrofits and 400,000 heat pumps by 2030. It directs a majority of State supports to those with private means. Delivery since 2019 has been miserably slow. The Government's new, redesigned programme recognises something we have been saying for years, that the deep retrofitting scheme is way out of the financial reach of most individuals and families. The Government refused to accept or acknowledge this, but the figures do not lie. A parliamentary reply I received last month showed that just ten private deep retrofits were completed last year, not 10,000 or 50,000 as is needed each year.
Now, the Government has recognised that its original plan was failing and has sought to change course. While some of these new changes are welcome, others are not. I welcome the fact the SEAI’s "no second visit" rule has been removed. That was an unnecessary barrier that prevented many households making incremental improvements to their homes, as their financial means allowed. I also welcome the attic and cavity wall insulation programme. This is something we had raised, albeit in a slightly different way, by saying people should be supported carrying out lesser works such as replacing windows and doors, as we recognised most people cannot afford major works.
While these two aspects are welcome, the national retrofit plan as announced has significant and major flaws. The programme, as designed, will not direct sufficient resources and support to those most in need. Instead it disproportionately advantages those with means, with cash at hand or with the ability to pay back a medium-term loan. This is a massive transfer of wealth. Working families who earn too much for the warmer homes scheme but do not earn enough to afford major improvements will have the choice of taking on considerable levels of debt or continuing to live in a cold house. The plan is silent on renters, both on improving the energy efficiency of their homes to try to reduce their bills, and on the protections needed to ensure they are not evicted by unscrupulous landlords using retrofitting as a cover. It fails to address how the huge backlog on the warmer homes scheme will be tackled with appropriate haste.
In terms of the transfer of wealth, it is very clear that this plan significantly benefits those with means and prioritises ability to pay over need. Those who have the means can now get €50,000 worth of work done to their home and only have to pay half of that, with the taxpayer coughing up €25,000. Is it equitable that the taxpayer should be funding the retrofitting of a millionaire’s home, for example? I do not think so. Taxpayer-funded grants should be targeted to provide financial assistance to those who really need help paying for energy upgrades. There is no income cap or sliding scale, and for what return? What reduction in emissions? With the one-stop shop scheme we have a very likely scenario that much of our better housing stock will be retrofitted first. Retrofitting will not take place in order of need, BER or income. An income cap and a sliding scale of grants would have been more appropriate. They would target financial support at those who need it. A parliamentary reply I received yesterday stated that "imposing new additional income limits and means testing were not considered as part of the design of the new upgrade scheme." They were not even considered. The Minister might clarify if and why this was the case.
For most working families who do not have €10,000, €20,000 or €25,000 available to them to carry out a deep retrofit under the 50% scheme, they have three choices. They can take on considerable debt via the new loan scheme, although many are simply not in a position to do this. They can tip-toe along on the up to 80% scheme but this is limited. We will have a scenario where Mary and Tom living in number 25, working hard on a low income and can only get shallow work done on their BER G rated house. Around the corner in number 30 Máire and Tomás, working hard on a middle or high income, have a BER C rating and a warmer home, and they can afford to get a deep retrofit. The third option is to continue living in cold, damp houses.
The level of funding for the plan is welcome. It does not match Sinn Féin’s commitment but with it, the Government had options. If it had opted for a sliding scale of grants, less money would be granted to those who do not need the same financial help, freeing up additional resources that could be allocated for working families on lower incomes. In a time of rising energy costs, it is a major disappointment that this plan is so weak in this regard. It does not sufficiently direct the resource to areas of most need. It fails those on lower incomes. It fails the equity test. There is no other way to say it. Social Justice Ireland agrees with me in this regard.
It fails renters, too. Some 25% of the population are renting. Most are paying high rents, often for substandard accommodation. I was very disappointed but not surprised to see they were forgotten about entirely. Many tenants are living in poor quality homes and apartments. Despite charging exorbitant rents, many landlords will not invest in energy efficiency, leaving tenants with massive heating bills each month. They talk about the so-called split incentive; the landlord does not pay the ESB bill and does not get the benefit of retrofitting, so why would he or she retrofit? The split incentive is a red-herring, a misnomer. Government has the means to push or entice landlords to retrofit. It can introduce mandatory standards, for example, but it will not and will only hint that something might be done after 2025, when Fianna Fáil, Fine Gael and the Green Party may be out of government.
In respect of those landlords who want to use retrofitting or home improvement works as a means to change tenants, there is no additional protection for renters from eviction. When I look at the scheme presented by the Government, I predict most renters will go on living in cold homes while others face the prospect of their landlord using retrofitting as an excuse to evict them. The national retrofit plan can be added to long list of ways this Government has failed renters. The new plan also seeks to continue the warmer homes scheme, now the free energy upgrade scheme. This scheme provides full retrofits for those on the lowest incomes and elderly homeowners. The eligibility criteria have been slightly expanded to those on disability allowance. However, the scheme is being massively restricted on the other hand from pre-2006 builds to pre-1993 builds. This is a massive restriction. It has not received much attention but it surely will when people go to apply for these supports. In addition, there is an incredible 26-month average waiting time from application date to works completed. That is the average; it is far longer in many areas. There are over 7,000 on the list. The Government says it will complete in the region of 5,000 this year. That is a big commitment far beyond anything that has ever been achieved, but it still leaves 2,000 waiting as well as anyone who applies this year. I hope many will apply but perhaps the 1993 restriction will put paid to that prospect.
How the Government intends to address these backlogs and long waiting times is not at all clear. We do not have enough tradesmen and women and we have even fewer who are suitably trained. There is the real prospect that the expansion of other schemes such as the one-stop shop scheme will only increase competition for contractors and could result in these waits getting even longer.
Those who are eligible for the warmer homes or free energy upgrade scheme are the most vulnerable to energy poverty. These are people on the lowest incomes, elderly people living in cold homes, people on social welfare payments who have to choose between food and fuel. These people should have been prioritised, but it seems they could actually fall down the queue due to the structure of this plan.
The national retrofit plan aims to invest €8 billion of taxpayer’s money. For a plan with such a massive budget, the Government has provided very little background information for critical analysis. There are very serious questions that need to be answered.
Are we getting bang for our buck? What emissions reductions will we achieve? Are we targeting State resources in the best way?
Important information examining the assessment of this policy and other climate policies is not being published or shared with Members. For example, in 2021 the Department of the Environment, Climate and Communications spent €924,525 of public money on reports, economic analysis and modelling from McKinsey. I believe McKinsey is driving Government thinking on climate policy - even more so than the Climate Change Advisory Council - but, unlike the council, its proposals are hidden. I believe that to be the case for climate action plans for both 2019 and 2021. We have asked to see the content of those reports but the Government is refusing to share it with us. There is a host of unanswered questions in this area. It is simply not good enough.
We need a national retrofitting programme. We need it to improve the fabric of people’s homes and the quality of their health and lives and to reduce their dependency on fossil fuels for heat. The scale of the Government’s ambition is significant, even if it does not match Sinn Féin’s. We differ - it is a significant difference - on how we fund it and how the programme is targeted. The Government’s programme fails the equity test in its funding and design. It will fail the equity test in its delivery.
The Government’s track record on retrofitting has left Irish homes behind when it comes to energy efficiency. Its plan repackages commitments made years ago and little progress has been made in the meantime. Retrofitting 500,000 homes by 2030 was committed to by the previous Government in 2019. Three years on, we are still looking at the same press releases with the same numbers.
The scheme falls well short of what is required. Sinn Féin has been raising the cost-of-living crisis for months, and the Government had to be dragged kicking and screaming to admit, in the past couple of weeks, that there is an issue. Then the Government announced a scheme whereby one needs to have to up to €25,000 lying around or take on more debt. On the one hand, the Government is saying it understands people are struggling to make ends meet and heat their homes, but on the other it is asking people to fork out thousands. These people cannot afford to heat their homes or retrofit. Therefore, the scheme is going to leave people behind.
The Government is increasing the carbon tax on 1 May. This will force more people into fuel poverty. People do not have the money to heat their homes. The Minister thinks they have the money to afford a retrofit or take on extra debt. None of this is making any sense in the real world.
The plan is silent on renters. Some renters live in cold, poorly insulated homes and are paying huge bills. There are landlords who will not invest in retrofitting, leaving renters paying huge bills. Yet again, we are leaving renters behind.
Linking the scheme to the ability to pay is simply not fair. As my colleague, Deputy O’Rourke, said last week, this could end up being regressive. I hope this is not the case but the Deputy may be right.
Everybody welcomes the package of supports as part of the delivery of Ireland’s residential retrofit programme but I suppose the devil is in the detail. As Deputy O’Rourke mentioned, the 80% scheme is very limited. We are effectively funding the well off in that we are giving wealthy people, in particular, 50% of their upgrade cost.
Just like homeowners, those renting from Dublin City Council would love the opportunity to have their homes insulated. Commitments were made years ago to insulate the flats at Glover Court but that never happened. As Members know, flats such as those at Glover Court and Rathmines Avenue, in addition to those in the vast majority of Dublin City Council flat complexes, are in desperate need of regeneration. After years of neglect, it is vital that residents living in public housing have a decent home to live in. Residents living in council-owned flats have been neglected for long enough. They have effectively been abandoned by the State. Residents in council-owned houses and flats have long dreamt of having their homes insulated to a modern standard. With the new scheme, they have been left behind once again. I have not heard any of the previous contributors mention flat complexes. The tenants are sceptical, which is understandable. The council’s long track record speaks for itself: it will not spend money to get rid of the rats and infestation and clean up the bin areas, nor will it spend money to remedy the dampness, water and sewage leaks, and broken windows and doors. Bin storage areas in flat complexes are mostly unacceptable and only encourage the gathering of rats and seagulls. To residents, having their homes insulated by the same landlord that has neglected them for years seems like a distant aspiration. The council has plans for insulation but it also had plans to fix the defects and dampness, but this never happened. Therefore, it is easy to understand why residents in flat complexes would be cynical and sceptical.
Having a well-insulated, warm, dry home seems like a faraway dream when there is overcrowding to the extent that it is impossible to keep dampness and condensation away. It is all very well discussing insulation when there are three or four children sharing a tiny boxroom and the mother or father is on the couch. Insulation is welcome if it happens. I have not heard a real commitment that flat complexes will be insulated properly, funded and prioritised. They have been abandoned and neglected for long enough.
Like many urban constituencies, particularly in Dublin, mine, Dublin North-West, has a mixture of modern and newly built housing in addition to old stock built decades ago. Areas such as Ballymun, Santry, Whitehall, Glasnevin and Finglas have seen a huge growth in population and corresponding growth in the number of housing estates. A substantial number of these estates were built in the period up to the 1970s and 1980s, having started in the 1950s. This was a time of great expansion in these areas. Houses of this period, which in most cases were structurally sound, are difficult to heat. Their primary heat source was a fire in the living room, which often had a back boiler linked to radiators around the house. In the past, they did not even have that; they just had fires. While this was the traditional way to heat a house, it was, and is, inefficient. These days, new housing estates are generally built to a high energy standard. It is for houses that were built decades ago that retrofitting is essential and does a lot to improve energy efficiency. In their current state, they do not retain heat. Excessive heat loss in a home is inefficient and costly to the residents.
The longer a house can hold heat, the less fuel that is needed to keep it warm. Therefore, there is an urgent need for old housing stock to be brought up to a satisfactory building energy rating of at least B2. The old houses will require a deep retrofit to bring them up to an acceptable energy standard. Many of the residents of the houses have raised families in them and are now senior citizens. They are also the people who are most in need of upgrading their houses to make them more energy-efficient. They cannot afford what it costs to deeply retrofit an old house. That is why a national retrofit plan is so important. However, to be successful it needs to target those most in need. While I welcome the national retrofit plan, I regard it not as a solution to our current energy-rating problems but as another step in the process of bringing our old housing stock up to an appropriate energy rating. Unfortunately, the national retrofit plan is constructed in such a way that it does not go far enough to include those who are most in need of a deep retrofit of their homes but who can least afford it.
It does not go far enough to include those who are most in need of a deep retrofit on their homes and who can least afford it. Dublin City Council's retrofit programme for its tenants is working very well. It is magnificent. I have seen the results of it in Finglas south and across the constituency, but it needs to be accelerated. It is quite clear that the council does not have enough money. That is something that needs to be urgently addressed with the local authorities. The SEAI has stated that new forms are coming out. They must be made available as quickly as possible. For people who were applying for a second fit, the time will not be taken into account to look at those. That is unfortunate because over many years a lot of people had applied to get other works done. Some got an attic done or otherwise. The second fit will be done and instructions have been given, because the Minister told me this the other day, but I worry that they will not be dealt with quick enough.
I am glad to have the opportunity to speak on the national retrofitting scheme and to very much welcome it. I think there is a broad welcome for the scheme. It is undoubtedly a win-win to see a national retrofitting programme. Many of us on the Opposition benches had indeed been looking for this to be rolled out for some time, so it is most welcome. I thank the Minister and his officials for the briefing last week with Opposition spokespersons, which I certainly found very useful. Clearly, there are enormous benefits and opportunities in a national retrofitting scheme. There are environmental benefits, without a doubt, and also social and economic benefits. I was struck by something the Minister said about the scheme on retrofitting which was that perhaps the biggest benefit is that of public health and the health of individuals and families. That is a crucial point, too. In the context of the dual crises of climate change and the cost of living, clearly, retrofitting can offer a long-term opportunity to ensure that both can be tackled and that we will see environmental benefits and economic and financial benefits for those who are experiencing real fuel and energy poverty. Indeed, I know all Members will have received harrowing emails and contacts from constituents across the country who are experiencing that real fuel poverty. Energy efficiency and measures to increase energy efficiency are clearly very important to address the root causes of energy poverty. Therefore, I very much welcome it.
However, I must say that having just come back from canvassing around Sandymount and Irishtown, I have heard the local residents express intense frustration about the cost of living and, in particular, the cost of home rental and home ownership, the lack of any homes to rent or own in the local area, and a scepticism about Government capacity to deliver real change on that big cost of living issue and, in particular, on delivering on homes. I mention that because I think it is at the core of this debate about retrofitting. What I am hearing from many is a concern, if not a scepticism, about whether this will make that real difference in tackling both cost of living and climate change for many households. For the Labour Party, there is a real concern about inequality and a lack of targeted funding. It is clear, from my reading of it, that households that can afford a deep retrofit and have savings of €25,000 or that can pay for 50% of the cost will reap greater benefits than households that can only afford the more minor works and do not have that upfront money. I am aware that the Minister has stated that there will be a financing package. Indeed, it sounds really positive. We have heard that it will be available this year, and that in the meantime there is an anticipation that households that have accumulated savings during Covid, and some have, undoubtedly, will be able to commence work on the retrofit. However, there is a difficulty in that those households that may have accumulated savings may need a greater incentive to spend that money upfront. I was interested to hear at the briefing that research shows that people need to see at least a 50% subsidy or injection of funds from Government in order to incentivise retrofit. I think it is more than that. People also need to know, for example, that they are going to be living in a house long enough to be able to gain the benefit of the savings on fuel bills over a period of time. That may simply not be the case for many households. It is not just that financial incentive; I think we also need to look at how we incentivise people to take the step to engage in the sort of deep retrofit that this plan wants to encourage. There may be more radical ways to do it. Providing upfront grants of two thirds of the cost, combined with low-cost loans, might offer a more attractive solution to many households. We need to be very creative about how we look at incentivising households and families to take this step.
The lack of targeting is also a problem. We need to better support households that do not have savings and those that, even once the financing scheme comes in later this year, simply cannot afford to borrow. We know the gap in an energy bill for a house with a rating of G or F, relative to a house with a B2 rating, is approximately €3,500 per year. We know that energy prices are increasing, so that figure is sure to increase. We really need to target Government subsidies and supports in retrofitting for households that are most in need of that upgrade to bring them up to the B2 rating.
As we introduce retrofitting measures that are crucial to ensuring households are being taken out of fuel poverty on a long-term basis, rather than just through temporary stop-gap measures, we need to ensure that money goes to all low-income households and not just to those dependent on social protection funding or in social housing. The nature of the housing crisis - and we are all hearing about it everywhere - means that many families outside of the net of State assistance are really floundering. Again, just today, I heard from a household where somebody getting a new job means that they are going to be removed from the social protection net. We are all very aware of these real circumstances. For many people, they will be left behind by this scheme. The Labour Party alternative budget referred to a targeted retrofitting programme limited to households with incomes of less than €50,000. In addition, it was stated that houses would have to have a building energy rating, BER, of less than B2. What we sought, therefore, was a targeted scheme that was targeted not just on income but also on those who are more at risk of fuel poverty. I ask the Minister to look at a more targeted and equitable approach to funding the scheme, and indeed at more radical measures like the idea of upfront funding to a greater extent than the 50% that is generally anticipated.
There are also concerns around equity for renters. The issue has been raised already in the debate. Indeed, I raised it with the Minister at the briefing last week. There is a real concern, which I have expressed, as has the Labour Party housing spokesperson, Senator Moynihan, that there is a lack of protections for renters in situations where their landlord may seek to engage of a deep retrofit or a retrofitting of a type that will necessitate the renter moving out of the home. What we do not want to see is the retrofitting process being used as an excuse to raise rents or evict tenants. We must ensure that there are strong protections for renters and that renters will also be able to reap the benefits of retrofitting. To reiterate, retrofitting offers immense benefits for anyone whose home is currently cold, badly-insulated or damp. However, we want to see stronger protections for renters.
I wish to raise an issue in regard to the warmer homes scheme with the Minister, which I raised with him last week at the briefing. I also previously submitted a parliamentary question to the Minister to ask about amending the SEAI rules on the one home-one visit restriction in the warmer homes scheme to allow homeowners to reapply for works that were no supported by grants in the 2014 scheme, such as external wall insulation on houses on which the walls are solid, and to consider loosening the problematic ten-year limit. In his reply, the Minister stated that there are no plans to ease the burden on lower-income households which are particularly vulnerable to energy poverty, but my understanding of this new scheme is that an applicant with a BER of E or below can now reapply with some scope for certain homes with a D rating. I see the Minister nodding. That is a very welcome development. I am glad that the position has been reversed. There is still the concern about the warmer homes scheme and delays in the process. I know that others have pointed out that there is a 26-month national average delay between application and completion.
That brings me to a final point that has been expressed to me by many constituents and others. There is a frustration or scepticism about the possibility or capacity to deliver in a situation where there are insufficient numbers of people with the necessary skills in construction. We need to see a significant ramping-up of apprenticeship programmes for young women and men in construction skills. We need to see Government committing to fund great programmes like the St. Andrew's programme that is run by the resource centre on Pearse Street.
It runs a really positive construction skills course. Those sorts of courses need to be significantly funded because, otherwise, even the homeowners who have the funding and wish to proceed with a deep retrofit, are really incentivised to do so and are going through the one-stop shop may find it very difficult to do so in practice because of that serious skills shortage. We need to see joined-up thinking in the context of the retrofitting scheme, with a much greater commitment to enhancing the numbers of apprenticeships. I have also raised this issue with the Minister's colleague, the Minister for Further and Higher Education, Research, Innovation and Science, Deputy Harris.
I have been contacted by a constituent whose property has a G building energy rating, BER, and who was delighted at the announcement of the scheme but then discovered he was not eligible for the scheme as it pertains to windows and floor heating as those grant amounts can only be drawn down through the one-stop shop scheme. I ask the Minister to examine the matter to ensure that people will be eligible to apply through the one-stop shop for those sorts of measures. I refer to people who live in older and draftier homes and wish to engage in retrofitting, but perhaps not the deeper retrofitting model that is most incentivised.
There is great interest in and enthusiasm for a national retrofitting scheme. The challenge for all of us, as legislators, is to ensure the scheme is sufficiently targeted to bring people out of poverty and to address both the climate and cost of living crises.
I thank the Minister for being in the Chamber and facilitating this debate. The recently announced national retrofitting scheme is, thankfully, at a level of significance to make a real impact in modernising Ireland's housing stock. It is an incredible investment with the potential to bring the energy rating of thousands of older homes up to a much more pertinent BER of B2, leading to significant energy cost savings. For instance, the new national home energy upgrade scheme and the 2030 target encompass 30% of the housing stock, which is very welcome. This is among the most ambitious retrofit programmes worldwide in terms of underpinning climate policy, the scale of ambition and the of commitment of Government funding, which I understand will come from ring-fenced carbon taxation.
The benefit for upgraded households will be increasingly important, given the spike in energy prices. Coming from a rural constituency on the Wild Atlantic Way, I expect the literary musings of the many writers living in the Clew Bay area will shift from references to whistling howls in their homes to descriptions of a warm and cosy surrounding. That should be put on record. The reality is this retrofitting scheme is the type of targeted funding that protects those who are spending most heavily on energy costs. The significant increase in the number of free energy upgrades for those at risk of energy poverty is the smart thing to do in this instance. I would like to see more than 400 homes per month being retrofitted but I recognise it is up from an average of 177 per month in 2021.
I would appreciate clarity from the Minister in respect of the one-stop shops. The one-stop-shop model is key to ensuring people considering the scheme have access to a hassle-free start-to-finish project management service, including access to financing. Will these one-stop shops be pop-up arrangements or will they be online? I believe the in-person element will be required, particularly for older people who may have a high interest in availing of funding under the scheme but may not be willing to pursue it online. I ask the Minister to send me a note on that issue, if possible.
I welcome the opportunity to discuss this scheme. Contrary to its name, retrofitting is a modern and progressive move for us, as a Government, to be making. In light of constraints relating to energy and electricity, along with a growing need to address the climate emergency, this scheme is so welcome. Nationally, we are seeing a culture change with regard to energy efficiency and our desire to be climate conscious in all the decisions that we make. Whether it is buying an electric car or a hybrid vehicle or retrofitting one's home, the appetite for measures such as this has never been greater and that is a really welcome change.
However, as all present are aware, making the effort to reduce one's carbon footprint, be more energy efficient or have a climate-conscious home does not come for free. Far from it. If we want to make the changes necessary to address the climate emergency, we certainly need to bring everyone - people of all financial means - along with us. We need to make it a viable decision for everyone to introduce climate change mitigation measures. The measures in the national retrofitting scheme will help to address the barriers in undertaking energy upgrades that so many homeowners experience, as well as the barriers experienced by those working in the industry. They also reflect the step-change needed in pace and scale of delivery in order to achieve that target of 500,000 home energy upgrades by 2030.
I really welcome the range of measures the scheme will seek to introduce. These are measures aimed at driving demand for retrofitting, expanding the size and capacity of the supply chain and making retrofits more affordable, which is crucial. It is important that people understand the return they can get from retrofitting their home and how quickly they will begin to see those returns. In the context of the 80% grant for attic and cavity wall insulation, I understand people will make their money back and begin to save on their investment within two years, which is really great.
A criticism I have heard from various constituents relates to the vast cost difference between the shallow and deep retrofits. I have heard many arguments for an extra scheme somewhere in the middle of the two which might provide for a greater level of retrofitting than the shallow retrofit but be less expensive than the deep retrofit. I do understand that in some cases there is little merit in updating the windows in a home, as such, if the walls are letting out a large amount of heat, for example. For many people, however, doing all of this in one go is simply not possible, so I very much advocate for individual window grants under the national retrofitting scheme as windows are an issue about which I am contacted a lot in my office.
I know many people who are vulnerable or on lower incomes have benefited from the Better Energy, Warmer Homes Scheme and, indeed, the one-off exceptional needs payment when heating is an issue. I welcome the free energy upgrades the scheme will provide for those at risk of energy poverty. However, these schemes do not necessarily help the squeezed middle. I refer to the people who are earning average or very good wages but finding it difficult to make ends meet because of the rising cost of living. More needs to be done to help these people to invest in their homes and proof them against climate change. More needs to be done beyond attic and wall insulation. As I stated, I really welcome the scheme and the range of provisions in it, but I would like to see more in the way of specific window grants and more for middle-income earners. I hope this is something the Minister and his Department will consider going forward.
I welcome the Minister for this discussion of what is one of the most positive schemes this Government will do in the coming years. I laud the scheme. There are so many positives in it, despite the negativity that initially greeted the Minister after he spoke. We should be discussing the positives here, which far outweigh the negatives, but it is not surprising to hear that at this stage.
This retrofit scheme will provide multiple benefits. People will have warmer and more comfortable homes that are cheaper to run. It will help alleviate energy poverty in the medium to long term and improve the health and well-being of citizens, particularly elderly people. It will improve the asset values of properties across the country and create economic activity and high-quality jobs. It will give everybody the ability to heat their home using electricity generated through renewable energy projects. There is a lot to be positive about in the scheme and I look forward to seeing it rolled out in the coming years.
The scheme will produce the one-stop-shop model that will provide an end-to-end service for homeowners. This includes surveying the home, designing upgrades, managing the grant process, helping with access to finance, engaging contractors to deliver the work and quality assuring the work at the end. It will also provide grant support under the Better Energy Homes scheme for homeowners who want to take a step-by-step approach to upgrading their home.
The grant for heat pumps, for instance, has increased from €3,500 to €6,500 and the rate for external wall insulation will increase from €6,000 to €8,000. Up to now, many people were excluded from the SEAI’s schemes if they had previously availed of one. That will now also be removed.
The budget that the Minister is providing for this will support an increase in the number of free home upgrades from an average of 177 per month in 2021 to 400 per month this year. As previous speakers have said here, there is concern about lower-income and middle-income families and how they will access the scheme and this is something we need to be conscious of as the scheme is rolled out.
In his closing comments, I ask the Minister to clarify the flexibility and responsiveness of the scheme. I am assuming there will be some kind of review undertaken periodically on aspects of the scheme and the process that perhaps are not working to the optimum and which might be amended over time. Such a review, and the ability of the Minister to review the process as we go would be welcome.
We also need to consider the added implications that growing inflation will pose. Will the terms of the scheme be reviewed as the programme is rolled out to take those factors into consideration? It is well documented that cost of living inflation is causing a significant problem at the moment. If many of the jobs that are to be costed in the coming years are far in excess of that €50,000 limit, I wonder will there be flexibility for the scheme to possibly grow with inflation, if that continues to be a considerable problem.
My main concern is around the apprenticeships and whether we will get the volume of qualified apprentices we need to do these jobs and undertake these schemes. That is where I see there might be a significant pinch. My other concern is on the SEAI’s capacity to deal with what is coming down the tracks in terms of the workload it will have. This undoubtedly will be a very significant undertaking and I hope the authority will be provided with the resources it will require to ensure that this scheme is administered appropriately and is used to the maximum benefit of all of our people.
I welcome the opportunity to have this discussion today about the Government's retrofitting programme. As I listened to the Minister's speech, there was a great deal on which I would agree with both him and with Deputy Leddin in what he said about the fundamental need for an ambitious retrofitting scheme and the improvements it could potentially mean for people's homes, health and finances, as well as the need from a climate, environmental and energy security perspective. We have seen the increasing importance of that over the past number of weeks. I also agree that this will come down to winning over the public because much of the time, people cannot visualise what it would be like to live in a warm, comfortable home that does not cost you money to keep running. The question for us here today is whether the retrofitting scheme as proposed is sufficient or ambitious enough. Unfortunately, I do not believe that it is. There are some fundamental flaws with the scheme in how it was designed and developed and I will go through them now.
I have previously spoken to the Minister about the Government's ability to meet the retrofitting targets that have been put in place. I understand that over the past number of years and previous to that there has never been a target that has actually been met. The issue which has been raised by participants is timelines, with a 26-month average waiting time. I have spoken to the Minister before about a constituent of mine who was waiting for two and half years for an inspector to come in. I understand that Covid-19 was an issue and caused delays but these were very significant delays and I do not believe that they could all have been put down to Covid-19 reasons.
My other concerns relates to the capacity of the scheme to meet the targets due to the particular market model that is being employed in this programme and in respect of the quality and availability of labour required. The Irish housing stock uses 7% more energy than the average European home and pumps out 60% more carbon dioxide. We are already starting at a particularly low base. It makes the scheme automatically costlier, requiring greater numbers of deeper retrofits just to bring us in line with other European housing stocks.
The scheme provides a grant of 50% of the cost of retrofitting a home to a B2 energy rating and requires homeowners to provide 50% of the funding for a deep retrofit, or 80% to any homeowners for a simple retrofit of attics and walls. Unfortunately, with the rising cost of living, inflation and rising energy prices, people are already pinned to their collar, paying for mortgages and high childcare costs along with everything else. Fewer people will want to take on another loan, regardless of how low the interest rate will be and few people will be in a position to take on a loan of that type.
The significant amount of feedback from the public about which the Minister has spoken shows there is a great deal of interest and that many people want to do this. The feedback I am receiving is that many people will not be able to afford to do it unless they are particularly wealthy or financially comfortable. People feel that to do this, they will have to take on yet another unaffordable loan or live with rising heating costs. They feel that they are being stuck in the middle with this and are worrying that they will continue to suffer as the cost of living puts many of these choices out of reach.
Rising inflation will also mean that the cost of materials to facilitate retrofitting on this scale will continue to rise as well. When asked how the Government will ensure the scheme will remain affordable for people and for the State, trickle-down economics is referred to. I have been hearing the phrase from Government circles that these measures reflect the step change needed to deliver on the retrofitting target of half a million homes by 2030. The general principle is that once the private sector engages in the scheme, over time the cost of retrofitting will go down. In the meantime, this scheme is primarily targeting those who can afford to deep-retrofit their home.
Once again, these measures are not targeted at those who need retrofitting but rather it is targeted at those who can already afford it, to attract more investment from the private sector while the Government hedges its bets that prices will go down enough in order that everybody at some stage will be able to afford a deep retrofit in future.
Meanwhile, low-income households are waiting up to 24 months to get their home retrofitted through the SEAI better warmer homes scheme. I understand the Minister has announced an expansion of the scheme and proposes to deliver 400 units a month. Last year, in 2021, 177 homes a month were retrofitted under this scheme. The target was actually 5,500 and only 2,126 were retrofitted. That means about 4,800 homes will be retrofitted in 2022, which is nearly 1,000 less than last year’s target. If I have those figures wrong I would appreciate an email to that effect but that is my reading of the figures that we are receiving through the replies to parliamentary questions.
When we look at this scheme it seems to us that the Government is targeting the wrong cohort of people. We need to target those who have a greater need to reduce their energy costs and who cannot afford to take on another loan.
What is the solution and the alternative? The Social Democrats have cited a pay-as-you-save scheme instead of a national retrofitting loan scheme. This would enable homeowners to get the finance up front and then pay off the costs as they save on electricity bills over time. This was a policy mooted by other, previous Governments since 2011 but has never really formed any serious policy. It is something that is, however, possible and that the Social Democrats believe should have formed the basis of this retrofitting scheme.
Berlin has been a front runner of success in this model. It began its Berlin Energy Saving Partnerships with the Berlin Energy Agency in 1996. One key to the success of the programme has been its financing, which relieved the owners of investment costs. Renovations have been paid for via loans, after calculations by accredited energy systems companies of the possible energy cost returns. The investments in Berlin have paid for themselves within ten years. In the 2000s these so-called energy performance contracts have become an established model for financing around the world and there is no reason why a similar model could be done here. The Social Democrats believe that this is the preferable model.
When it comes to the cost of this, I will refer quickly to the matter of the carbon tax, as I know it has been a matter of a great deal of discussion lately. There is much misinformation about this tax and unfortunately it is being used by some parties to create an environmental bogeyman. The Social Democrats believe that the entirety of the carbon tax should be ring-fenced and applied to this retrofitting programme and not just the tax increase. I find it interesting that there are many Ministers and Deputies who, when talking about the carbon tax, continually say that the carbon tax goes towards retrofitting.
It does not. It is the increases we have seen over the last number of budgets that have been ring-fenced and go towards retrofitting, but the bulk of the carbon tax does not. We believe that if the Government had taken the entirety of the carbon tax and put it into this retrofitting scheme, to provide an upfront payment so householders can get the retrofitting done and not have to worry about taking out loans but pay it back over the following years, it would have been a much more appropriate, urgent and ambitious way to deal with the retrofitting programme. It is unfortunate that the discussion is now coming down to the carbon tax being at fault for all our ills at present. That will not do us any favours at all and it certainly will not do any favours for any of our climate actions or ambitions for meeting our targets.
I have some concerns about the quality and availability of labour for the retrofitting scheme. The Minister referred to the scheme as a signal for the construction industry to ramp up the number of workers skilled in retrofitting. However, there is such a dearth of skilled workers in the construction industry at present that we will face serious challenges in getting a sufficient number of skilled workers into the sector. There was already a need for an extra 27,000 construction workers before the retrofit plan was announced. There will have to be significant ramping up of these numbers to keep the scheme sustainable in terms of quality and availability. Furthermore, the Minister for Further and Higher Education, Research, Innovation and Science promises a range of options will be made available from short courses to full-time or part-time courses, but those schemes have not been ramped up sufficiently either. There are only 104 students enrolled on nearly zero energy building, NZEB, schemes in 2022, so there has to be a great deal more focus on that. In fact, I have been doing a deep retrofit on my home in the last year, which is still not finished, and we have had serious problems getting workers on-site. We found that we might have a team of workers in to do the insulation or whatever, they could be there for half an hour and then they get a text message and go off to a different site. We could be left for days not knowing when they would return. Construction workers is a major issue that has to be examined.
We also must examine the issue of quality control. I am running out of time, but we cannot run the risk of being in a position where we will have to retrofit retrofits. If there was some quality assurance or quality control put in place as part of this programme, it would be very welcome.
While the plan to retrofit more homes is welcome, we have been in this position previously. The Government, of course, has prioritised the ability to pay over need, which means that those who need it most will get it last or not get it at all. Sinn Féin in government would have grants based on income and people's ability to pay. We would introduce a dedicated scheme for households with children living in energy poverty. Under the Government's plan, people who have a spare €25,000 lying around will be able to get up to €25,000 in grants. These grants will be funded by ever-increasing carbon taxes. Basically, ordinary workers and families who have been hit the most by the increase in the cost of living will be paying to retrofit the homes of those lucky enough to be able to put up the initial €25,000. The Government's solution for ordinary working families is for these families to go even more into debt. On Leaders' Questions today, my colleague, Deputy Doherty, offered the Minister a solution, which the Minister ignored in his response.
At a time when home heating has increased in price by 50%, gas by over 20% and ordinary workers and families are being crucified daily at the petrol pumps, the Government is going to increase these prices by introducing an increase in the carbon tax. We have implored it not to do this. The €32 million that it expects to raise with the carbon tax could be raised in different ways. For example, as Deputy Doherty outlined, the Government cut the bankers' levy this year at a cost of €63 million. That was a political choice. The Minister said we are running out of time with regard to climate change. I agree that we must act, but we must act in a fair and just way. I put it to the Minister that the Government is running out of time and out of ideas, and measures such as this show how out of touch it is.
Sinn Féin would target those who are most in need earliest, including those in social housing. Current energy saving criteria and measures for public homes have to be examined. I will discuss an issue in my area. I have been contacted by numerous residents from a public private partnership development in the area. The development is beautiful, shiny and new and one can see solar panels on the roofs of the homes. The residents who contacted me have disclosed that the solar panels are connected to a converter but no batteries for the converters have been provided. In real terms, this means no energy is being stored. As the energy is not stored it is therefore wasted. The system also provides for instant hot water when the residents run their hot taps, but because no energy is stored the water from the hot taps is automatically heated by gas. As we know, gas prices are going through the roof, so this is resulting in even higher than normal gas bills. We now have the bizarre situation in my area where an energy saving scheme is actually using more energy and hitting the residents hard in their pockets. Residents have reported to me that they feel the solar panels have been placed just for show and in order that the development can achieve its BER rating.
There is public housing in the Foxdene and Balgaddy areas in my constituency. The architectural plans for Foxdene Avenue, Méile An Rí, Tór An Rí and Buirg An Rí in Balgaddy won major awards, but the plans did not match the reality on the ground. Four years after a damning European ruling on the state of the local authority housing in Balgaddy, little progress has been made on improving conditions. Ireland has been found to be in breach of human rights by the European Committee on Social Rights because of the development in Balgaddy. The estate is just 15 years old, but residents contact me daily about damp, mould, leaks and rotten windows. I first became a public representative in 2016 and there has been no let-up in telephone calls from the residents, who are absolutely desperate. The council has tried to carry out some works in the area, but it is done in a piecemeal way as its budget allows.
The Minister talks about a national retrofit plan, but the people in Balgaddy feel they have been left behind again. The basic environment a person has is his or her home. A home is one of the basic needs we have as humans. If the Minister wants to make environmental changes to homes, I suggest he start with housing schemes such as Balgaddy where people are living in substandard homes. These are substandard homes that have been provided by the local authority on behalf of the Government, so the Minister owes the people an explanation and a chance to get them fixed.
Much as I respect my fellow county man, Deputy O'Rourke, there is a strong smell of cynicism when I hear Sinn Féin saying that this measure fails the equity test. It meets the equity test on two very strong standards. It provides free retrofitting for all the families who live in local authority homes, the low paid at work, carers, people on disability allowance with young children, people on jobseeker's allowance with young children and people on the fuel scheme. This is very targeted at people who are at risk of being in fuel poverty. It also meets the equity test in that it is linking the polluter-pays principle, namely, people pay a carbon price for the damage that carbon does to their home, to the long-term transformation, starting with those who are least well-off. That is what this is doing. It absolutely meets the equity test. It is helping to transform this country for a better future, not only for today's generation but also for future generations.
As with much of the climate agenda, this is asking people to change the habits of a lifetime. Many of us are used to the open fire and poor insulation. People are living in poor conditions in some ways and they are going to have to change. It is unfamiliar. One of the things we will have to do is win the hearts and minds of people to recognise that this is a patriotic call to make changes in the building stock we have inherited, so that there will be a better life for people today, particularly older people who need that comfort, and for people in the future by having a better climate and better environment. We have to use trusted advocates to demonstrate that this is something we need.
It is not just we, as politicians, who should be advocating but the many people who recognise that we are building the environmental assets of the future by making this type of transformation. We must embed this in both personal and collective initiative. The sustainable energy communities, of which there are now 600, can be at the heart of helping people to make this change because a lot of it does not come easily to people. It is asking people to disrupt their homes. We can enlist volunteers within communities to do it on an area-by-area basis.
This should start with the oldest homes where the greatest risk of fuel poverty and bad energy conditions exist. The Minister should invite people to sign up and give them a year or 18 months to do so with supports that can be put in place. We should really tap into making it area-based and use communities. We need to make it easy and the one-stop shop is a great step forward. We should also have other measures. In the UK, when an attic clearance service was added to the installation package, there was a dramatically bigger uptake. People had been thinking about the disruption that would be caused. A very simple measure transformed the take-up. We need to be innovative in how we help people to do this. We should be rewarding the sustainable energy communities that perform best so we champion, recognise and reward people making the effort to transform their communities and make them climate resilient for the long term.
We should continuously trial new approaches. I know the officials are very committed to doing this. Many initiatives have been taken in this area. An example is the VAT rebate during the depths of the economic crisis. It got a lot of people to do work that otherwise would not have been done. This could be very attractive for people. It helps to have the Revenue Commissioners also on the side of making these changes. We need to step up the obligations on the energy sector and on producers of energy products in order that they will also participate in what is a national mobilisation.
I wish the Minister well. I thank him for the effort that has gone into bringing it to this point. The low-interest loan element with the one-stop shop all in one piece is vital. We need to see institutions such as An Post and the credit unions that are trusted in our communities driving this initiative. It is of enormous importance to the communities we seek to serve.
I commend the scheme. I also commend the Minister and the Department on the work they have put into it. There is so much within it that is extremely positive and it is quite disheartening to hear Members opposite decry it and predict its failure before it has even begun. We have to recognise in addition to what Deputy Bruton has said that the scheme has a huge element of work that will see homes at risk of fuel poverty or in fuel poverty retrofitted in the coming years. These will be in addition to the 150,000 homes that have already been retrofitted under the free home energy upgrade scheme. In addition, the level of work that will be undertaken on homes at risk of fuel poverty will increase from 120 last year to 400 per annum, which is extremely welcome.
For those who find it difficult or impossible to borrow there are interim measures they can take. For instance, the 80% grant for those who wish to address their attic space or their cavity walls. This will almost pay for itself in one year. This is pretty fantastic when we consider the 25% saving in energy costs associated with the work that will be undertaken. It will leave a bill of approximately €500 for the homeowner to pay. If homeowners go through the one-stop shop that is to be established shortly, they will not have upfront costs. This is an excellent initiative which I commend.
We have an enormous amount of work to do to properly address the more than 1 million homes in the State that are not efficient in terms of the heat they retain or the manner in which they were built. It is incredibly important for us to recognise that targeting 500,000 homes in the next five years is extremely ambitious. There are funds being provided by the Department with responsibility for further and higher education to support the work of the education and training boards throughout the country. I have just come from a meeting with representatives from the education and training boards who referred to approximately €70 million capital funding per annum to invest in every county throughout the country to bolster the training courses available. This is to ensure the additional funds from the Department of approximately €31 million are provided to the sector for the near zero buildings of the future and all of the associated training courses. This will enlarge the number of individual builders who are capable of carrying out the work towards the 17,000 mark over the course of the next nine years.
In further recognition that it costs a lot of money to deep retrofit a home the State is stumping up 50%. In saying this, approximately €25,000 is a lot of money. This is why the delivery of the low-cost State-backed loan due to come on stream in the third quarter of this year cannot come soon enough. It is imperative the SEAI, as Deputy Bruton mentioned, is tasked with selling this. There are opportunities throughout the State to show great examples to people who might be sceptical about what it is like to live in a home that has near-zero heating bills. They have to cough up the money and find it somehow. Of course there are those for whom this might not be possible in the short term, but that might change in the near future. This is a nine-year plan. We will not be able to retrofit all of the homes in Ireland over the course of the next nine years. Clearly, there will be some who will be unable to avail of the deep retrofit. As has been mentioned, they can look at the other options available.
Oversight of the works that will be completed in this 500,000 home project over the next nine years is incredibly important to me. I have mentioned this to the Minister and he mentioned it in his opening contribution to the debate. Will all of the additional 50 staff he mentioned whom the SEAI will hire in the coming years be charged with delivering on the project or will they be inspecting? It is imperative we have confidence given the unfortunate legacy of the previous boom. The legacy on building standards must not find its way into scepticism about near-zero energy buildings, heat pumps and the like. I very much look forward to seeing the project being delivered. I commend the Minister and the Department.
I fully support the very ambitious programme the Minister has launched. There will be major challenges in delivering it. We are speaking about more than 500,000 homes benefiting over a period. It is important that we look at the existing structures and the defects that exist to make sure we can deliver in a timely manner. Recently, I spoke to someone who applied to the SEAI more than two years ago to get approval for work they wanted to do in the house. It was not until two years later that the house was inspected and they could start the work. There is a need to have a review every six months on what progress is made on inspections and the delivery of projects. If there is a need for changing some aspects of the programme we should not be afraid to do that to meet the challenges that will be posed by it.
We have a challenge with the workforce and the availability of people to deal with it. This morning I had a call from someone trying to get a wheelchair ramp put into a house. I know this is a slightly different area. I have gone through quite a number of contractors and no one is available. The individual has approval for a grant but no one is prepared to do the work at present because of the schedules they have. This is a problem we need to address. How can we bring more people in to carry out this work?
There is also an issue with houses built prior to 1970. They do not have cavity walls but cavity blocks. This is a huge problem. They were built between 1959 and 1970. There is a big challenge in trying to provide heat insulation. Work must be done on the outside and some work can be done on the inside. It is a challenge. I have come across estates where all of the houses have been built in that way.
As a result there is no heat retention whatsoever.
I also wish to raise with the Minister the issue of houses that were built by housing agencies 25 or 30 years ago. I have come across a number of cases where elderly people are living in these houses. Very little retrofitting work has been done to them by the housing agencies involved. I ask that the Department engage with those housing agencies to see what can be done around getting work done, especially where there are elderly people involved.
While the plan to retrofit homes is of course welcome, this plan will predominantly benefit people with means. Struggling working families will be encouraged to take on more debt if they want warm homes. There are aspects of the scheme that are very welcome, such as the SEAI no-second-visit rule being removed and a step-by-step scheme of small works will be supported.
There are, however, serious concerns that it will result in a three-tier programme. On the first tier, there will be grants and immediate work for those who are able to pay. On the second tier it could be delayed works for those in local authority housing or those on the warmer homes scheme. Under third tier there would be minor works or no works at all for renters and those on low incomes. This has the potential to be deeply regressive.
Under this plan, people who have €25,000 on hand, for example, will be able to get up to €25,000 in grants, funded by the ever-increasing carbon taxes. Meanwhile, for working families who are struggling to get by, the Government's answer is to take on more debt. Those on low incomes are once again being left behind. The plan is prioritising an ability to pay over need. The plan could have been more equitable. It could have included graduated grants based on income and ability to pay, targeting those most in need earliest in the delivery, and including those in social housing. The Government could have incorporated a dedicated scheme for households with children who are living in energy poverty.
The warmer homes scheme is under-resourced. There are currently approximately 7,000 houses awaiting work on the scheme work programme. The local authority scheme is also under-resourced. It is expected to deliver only 2,400 retrofits out of an estimated 27,000 energy-efficiency upgrades this year. Private tenants have been forgotten in the plan. Many tenants are living in cold and poorly insulated homes. There is nothing in this plan to address this. There are no incentives for landlords to make energy-efficient changes. It will leave renters having to continue to pay huge and rising heating bills.
Taxpayer funded grants should be targeted to provide financial assistance to those who really need help paying for energy upgrades: those least well off in the coldest houses. Sinn Féin allocated €75 million more than the Government in our alternative budget in 2022 to achieve just that.
As my colleague just stated, it is always welcome when there is any scheme put into place that will improve the situation for people out there. It is very welcome that there is a scheme. It is making an effort. All of us recognise, however, that when we have a scheme such as this, there is an opportunity to try to get the most in need dealt with first. This is the criticism all of us have of this scheme. We are not here to be critical, we are here to be constructive. This is a missed opportunity on the part of the Government to try to reach those people most in need, who have the most hardship, and who have the most difficulty in that regard. It could have been done in the way that many other grant schemes are done such as grant schemes for older people that are run through the local authorities. This is where one gets a larger grant if one is on a lower income, and as the income bracket goes up then the level of the grant would fall. It would make sense to most people. This is what should have and what could have been done. That is one of the big issues with the scheme.
A number of people have also come to me on another issue, and perhaps the Minister would clarify this at some point. It concerns those people who have homes that they may have inherited. I know one man who inherited an old house from his uncle ten or 15 years ago. Nobody has lived in it in years. It is sitting there, out in a rural area and he wants to know will this grant will work for him or will it not, or will he have to wait for some other grant to come later.
Of course it is not good to be getting people into debt in these circumstances, but a new loan scheme is proposed - it will hopefully involve low-interest loans - for people to avail of. We have the grant coming now and then the loan later on. Many people will have to wait to see if they will be able to apply for or even qualify for loans. People already have mortgages, car loans and other commitments. One of the things that seems to be missing in all of this is an understanding that the people who need this most are those who are already under pressure and who find that the cost-of-living crisis is biting hard. To say to them that they would have to go out and borrow another €25,000 or more just does not work. They will say that they just cannot afford to do that. They are not in a position to do it.
I raised with the Minister earlier the case of a man who has cancer and who cannot afford to get health insurance. He said to me that he would get health insurance after he had paid off his mortgage, which will be in another ten or 12 years. That was when he could afford to do so but, unfortunately, cancer got to him sooner. It is the same with people who need to get their homes retrofitted. They would love to get their homes retrofitted but cannot afford to do it. They cannot afford to take more loans until their mortgages are paid. These are the people that the scheme could have targeted much better.
There is always time to make adjustments and changes. I encourage the Minister to take on the criticism, if he wants to call it that, or the constructive message that the Opposition is giving to him to the effect that there is an opportunity to make changes. As the Minister moves forward to finalise the scheme, there is an opportunity to put measures in place that will target those who are most in need.
I put it to the Minister and Minister of State that there is no debate about the importance of the retrofitting programme. It is a key step to Ireland reducing its emissions in the dramatic and radical way required. The technical possibility exists for us to have huge cuts in emissions caused by home heating. Like the possibility of free public transport, for example, there are other huge benefits to society and to ordinary people, not least the warmer and energy-efficient homes that can also reduce the prevalence of respiratory illnesses and the deaths associated with those. We can improve air quality dramatically, and we can improve good quality and decent-paying jobs and apprenticeships for decades to come. Most importantly, we can cut the need to use oil, gas and coal.
It can also help us to change the debate around climate change for once and for all, from one where ordinary people are consistently asked "What are you prepared to sacrifice? What are you as an individual prepared to do to change your behaviour and change your lifestyle?", to one where we offer a vision to people for a fossil fuel-free future that is better, healthier, and more equitable, and a more compassionate place to live than where we are now. Nobody could have a problem with the Government's big effort around a retrofit programme. We have known this for the last few years, as the crisis is accelerating, and we know that the need to cut fossil fuel use is more and more urgent.
The Green Party and the Minister entered office on the basis that only with the Green Party in government could we deliver the radical change that is needed to stop the worsening of the crisis. Yet, what do we see with this retrofitting programme and with practically every other practical policy? This is not a huge ambition or a huge step forward. In 2019, the Minister's predecessor, Deputy Bruton, announced, in a PR flurry, a retrofit plan for 500,000 retrofits of homes and the installation of 400,000 heat pumps. This current scheme is not a dramatic improvement in what has already been announced, and which is now being regurgitated three years later.
Moreover, my issue with structural problems around the scheme remain the same as those echoed by Deputies here. If a person is not included in the group that qualifies for the warmer homes scheme, not on fuel allowance or living in poverty and social welfare, not in the group that has the capacity to borrow €20,000 or €30,000, then that person remains in the same that he or she will always be in. Let us be clear, that this is the vast majority of ordinary working people in the State. Most of them will face the same issue of not being able to take steps they need to reduce their emissions, and to improve the efficiency of their homes.
Like other Deputies, I could cite example after example of people coming to my clinic who are just a few euro above the threshold relating to the fuel allowance. They do not fall into the pretty inadequate category the Government has set in the context of energy poverty and, hence, do not qualify for the allowance. That is not good enough. The matter needs to be reviewed and we need to take in a bigger cohort of people who cannot afford to borrow but who do not fall into the category of being poor enough to be supplied by the State.
Before I hand over to my colleague I want to deal with one other issue. I received a reply to a parliamentary question yesterday on issues to do with this retrofitting scheme. The much-lauded spending of €1 billion per year between now and 2028 turns out to be no such thing. Like the carbon budgets and the targets relating to reducing emissions on an annual basis, the figures are totally backloaded to a time when neither the Minister nor the Green Party were in government.
We do not know what is going to happen after 2025, but it is not until 2027, 2028, 2029 or 2030 that the billions will start being spent. It is very frugal up the point. We are backloading the responsibility of reducing emissions and reaching the targets required of us by the Paris Agreement, our own climate legislation and the programme for Government. Everything is being backloaded to a time when the Minister may not be sitting here at all. Who will be held accountable? Where is the responsibility?
The Act may do that but this is one Government passing to the next the legacy of the backloading of targets. Let us be honest with people. This is not €1 billion per year. Rather, it is an average of €1 billion per year over the next eight years. It is nothing like that between now and 2027.
We all know the urgency of retrofitting homes that are badly insulated to protect the climate and lift the financial burden being imposed on families by rising energy costs. As usual with Fianna Fáil, Fine Gael and, most sadly, the Green Party, the way the scheme is designed means it is, once again, a scheme where the suffering of the poor will subsidise improvements in the lifestyles of the rich. That is what is going to happen.
What I mean by that? The financing for all of this is dependent on regressive taxes being imposed on people who are absolutely crucified at the moment by rising energy costs. In 2020, we collected €494 million. I understand an additional €148 million, or in that realm, was collected as a result of the increase in 2021. As Deputy Bríd Smith found out this week, we raised €481 million in VAT on energy last year. Over €1 billion in regressive forms of tax that disproportionately hit the least well-off have been raised, and next year the Government will give us €267 million, a fraction of which is for retrofitting. However, the people who will be most able to access it are rich and can afford to make up the gap between the maximum amount for retrofitting, which is €25,000, and the actual cost of a deep retrofit, which is, in reality, €50,000 or more in many cases.
This is the reverse of Robin Hood. It is the working people subsidising a grand scheme that will mostly benefit the better off and which they will not be able to access. The idea that the just transition to a better climate future is about impoverishing even more the poor and least well-off is, frankly, sickening. That is what is going on. If anything is going to turn people away from the climate agenda, it is that sort of policy that will do it.
Given that we are talking about energy, I cannot help but comment on the mantra being used by the Government to justify the increase in energy costs that is happening, namely that it is all to do with the international market and we have no control over it. The Government has control over carbon tax, VAT and PSO levies, which is why our energy costs are 15% to 20% higher than the rest of Europe. That is the fault of the Government.
Something else that has not been injected into the debate is the fact that most of our gas comes not from international sources but from a private company in Corrib because the State gave it away. Most of our electricity, up to 85% on many days, comes from wind produced on land in the country. All of the prices are charged at international market rates, which is an important reminder of something we have often said. Even if we develop loads of renewable energy privately and for profit, it will not make a damn bit of difference to ordinary people in terms of the cost of energy they are being crucified with. That will continue unless the sector is under public control.
Obviously, we need to retrofit people's homes with funds raised, not by crucifying the least well-off and subsidising the well-off, but by putting that investment into retrofitting social housing and the homes of tenants and the least well-off and actually providing grants and supports which are genuinely affordable. That could easily be done by taxing some of the profits made by energy companies in this country.
I welcome the scheme. It is a smart scheme. Despite the usual missed opportunity rhetoric that comes from the Opposition pensions no matter what the Government does, this scheme will provide across all demographics and for everybody that can afford it.
As usual, Deputy Boyd Barrett is never clear about what he wants. It would seem that what he wants is to depend on fossil fuels because he does not want to harness the offshore renewable energy electricity that is out there in abundance and which this Government has taken measures to harness. I never quite understand the logic that gets applied.
I did not interrupt you. I sat and listened to your rhetoric and I ask you to allow me to lay down some facts.
I have acknowledged the part Mr. Paul Kenny has played in this. I do not think there is anybody better out there to recommend and advise the Minister on this scheme, which ticks all of the boxes of sustainability and sustainable development. The three pillars of sustainability are economy, community and environment. I will try to outline why I believe that to be so.
In terms of economy, this scheme will create thousands of jobs, and we all know that. We are recruiting people, setting up centres of excellence and increasing the number of apprenticeships available. My nephew recently started an electrical apprenticeship with a solar company and asked me for advice as someone who served an apprenticeship many years ago. I told him to be careful on the rooftops installing solar panels and that he had decades of good, well-paid and clean work ahead of him. That is also the case for the thousands of plumbers, electricians, carpenters, plasterers and general builders we will need not just to build 33,000 homes per year but to retrofit the 500,000 homes that the Government will fit.
A range of schemes will be applicable to everybody. Nobody will be left behind, because that is key to the Government's message on climate action. This is climate action. We will leave nobody behind. A range of measures are available. The Department has significantly increased the number of homes that will be addressed under the warmer homes scheme. Deputy O'Rourke did not get those facts right.
Economically, this scheme stands up in terms of the work that will be created. We will harness offshore electricity from our wind power. There are steps in place to do that, and the Government is firmly committed to that and will meet our targets. We will electrify our heating systems and transport in this country, and we will create thousands of other jobs in those areas, apart from the retrofitting scheme.
In terms of community, this scheme stands up. Many people across the country are living in cold, damp and draughty houses. Our standards in building were not great for many years. Ventilation in houses was provided by draughty poor workmanship for many years. We need to tighten that up and ensure that those people are looked after first, including those in fuel poverty and whose health is being damaged year after year by living in cold, damp and draughty houses. We will address that.
There is a 100% grant in place for people in receipt of certain social welfare protections.
We will meet that target and make those houses fit, habitable and comfortable for people to live in. That is the community aspect of this. The environmental aspect is clear to everybody. We rely so much on imported fossil fuels in this country. We see the geopolitical situation which is driving energy prices through the roof. The smartest thing that any Government can do is to think beyond the five-year electoral cycle and to think ten, 20 or 30 years ahead, and about what we can provide for the children who are coming after us. We should provide a housing stock so that those children grow up in healthy, warm, comfortable housing, where the bills are not so high that parents cannot afford other things for their children. The Government is laying out a long-term sustainable plan, which is what the Greens do. We think ahead. We do not think about the next two or three years and what is popular or not. We think long-term. We think about sustainable energy and retrofitting, which is exactly what we are doing with this scheme. Despite all the criticism, it is a good scheme, which will work and will deliver. It is backed by finance. It will offer low interest loans for people who wish to avail of them. There is a range of opportunities for every household to avail of warm, energy-efficient, cost-efficient, comfortable, healthy housing for themselves, their children and future generations.
I often think when I am here about The Frames' song, "Star Star" and this lyric:
Cause I don't understand these people
Who say the hill's too steep
Well they talk and talk forever
But they just never climb
The hill is steep. The targeted emissions reduction that we have is as steep a hill as anyone has ever faced. This retrofit scheme is part of us climbing that hill. Rather than moving around the Opposition fridge magnets of missed opportunity or such, this is us getting on with the exceptionally important job in front of us. It is one that provides huge opportunities. We are funding this retrofitting scheme into the future in an ambitious way. We are leveraging some private wealth to do it, which Deputy Boyd Barrett should welcome, since we are unlocking that wealth and putting it to work productively in our communities. We are providing certainty for the future, so that jobs and structures can be created. I am thinking of regional structures such as the Waterford Energy Bureau. It knows the job that it has in front of it for the next decade. I am also thinking of small businesses, because this is not work that can be outsourced to the Far East. They include small businesses in Waterford such as Enerpower, Sunstream, which is a solar energy company, and Redfoot Roofing. These are all small businesses that employ people in the community. They put the skills that Deputy Matthews outlined to work in the community.
I am thinking of regional training centres, such as the Waterford Wexford Education and Training Board. It led on the centre of excellence for retrofitting. There is a regeneration opportunity in the centres of our towns and villages for older building stock. I am thinking of places in Waterford like Ballybricken or Mount Sion Avenue, where my mother grew up. Housing there dates to the mid-1800s. We can bring that up to a modern standard. I think of places where I went to school, including Lisduggan and Larchville. There is 1970s social housing that would be brought up to the modern, liveable standard, to provide a better standard of living for the people in it.
Deputy Whitmore highlighted the challenge with the number of workers. It is absolutely a challenge, but it is also an opportunity. This is good, clean work with solid jobs that will exist into the future. I was speaking with the Minister, Deputy O'Brien, at the Joint Committee on Social Protection, Community and Rural Development and the Islands. He raised the possibility of people on community employment schemes or the rural social scheme being involved, for example. Not all of these jobs need to be carried out by highly-trained individuals. The 80% energy grants could be for attic insulation. A person can be trained to provide attic insulation in a short time. That is a good job. Somebody who is maybe distanced from the labour market could move into that area.
Deputy Ward said that this scheme will reach those who need it most last. That is patently untrue. Deputy Bruton put paid to that. The warmer homes scheme will be expanded. It will be targeted at people who most need it, who live in lower-performing houses. They will have access to this retrofit scheme free of charge. We know there is a fuel poverty dividend for people who are at the lowest end of the socioeconomic spectrum. There is a health dividend too. Generally, the housing stock for people who live in these communities performs poorly. If one walks through those areas on a still evening, one can feel it in the air. People get cleaner, healthier environments both inside and outside their homes. It is tiered. It provides for those people who can afford to pay for it out of pocket. It leverages that private wealth and puts it to work. It also provides for full grants for people who cannot afford it. There are steppingstones in between, with the State-backed low interest loan, which is extremely important, and the 80% grants for people who might not be able to face into taking the full job on.
I agree that there are some issues with rented accommodation. We need to make sure that we are not creating intergenerational issues by pulling up the ladder behind us. There is a commitment in the Housing for All programme to implement minimum building energy rating standards where feasible. We need to follow up on that and be ambitious with the timeline. Putting that concern to one side, this is very ambitious. It gives certainty to a sector to allow it to scale up with confidence. It creates local jobs. It capitalises on our renewable energy resources. The Greens are in government and we are walking the walk, delivering the manifesto that we presented to people and the type of climate action that we promised in a meaningful and ambitious way. I welcome it.
I cannot let this opportunity pass without again mentioning the long delay and the countless announcements about the microgeneration scheme. It must be delivered immediately and it must be meaningful. There has been enough talk and gestures. People in my constituency have spent their hard-earned money and, in some areas, have taken out loans to buy solar panels in anticipation of this much-heralded scheme. It must be introduced without delay. The updated wind energy guidelines are long overdue. The current guidelines are 16 years old. Since being elected two years ago, I have asked three times when the guidelines will be updated, and each time I have been told that the public consultation ended in February 2020, and that the new guidelines were being prepared. A previous Deputy spoke about the hill being too steep to climb. It must be steep for him as well because this is not good enough. How can councillors who are working on county development plans plan for ordinary development in the absence of these guidelines? The Government must get the finger out, ensure that our scenic areas are protected and that industrial-sized wind turbines are kept a safe distance from family homes.
The retrofit plan announced by this Government is inequitable. It is an inequitable use of taxpayers' money and it leaves renters and those on low incomes behind. It channels money to people who already have the means to carry out work. Sinn Féin has called on the Government to consider the eligibility income cap to try to make this more equitable and allow more money to be directed to those on lower incomes or who are living in energy poverty. Many people come to my office whose fuel allowance is wiped out by inflation and carbon taxes. They isolate themselves in one room to conserve heat and cut down on food shopping in an effort to balance the household budget. Imagine having to do that. More must be done to help these people. People come to me who were awarded grants under the warmer homes scheme over two years ago and they are still waiting for a contractor to be assigned. I do not know what is going on. Maybe the Minister does.
Sinn Féin provided €30 million more to do this than the Government in its alternative budget for 2022. We provided for graduated grants based on income and ability to pay, prioritising those most in need. The Government retrofit plans are funded by the highly regressive, punitive and unfair carbon tax, whereas Sinn Féin has more ambitious plans that are funded fairly. There is a fairer way. The Government must listen to it or stand aside and let others do it.
I welcome the changes regarding the SEAI, getting rid of the no second chance rule, and minor works on attic and cavity walls. Unfortunately, this is a plan that could have done so much good and it is actually just more of the same old thing. I acknowledge that it will reduce carbon emissions, but for whom will it reduce them? The retrofitting scheme as planned is a bit like the SSIA scheme of old, where the more one has, the more one will be able to make out of this scheme.
If you can put your hands on €25,000, you will be able to get an extra €25,000 in grants. If you cannot, the Government recommends you take on more debt. In that sense the scheme is truly a transfer of wealth geared at the governing parties' voter base, people of means, while people who are barely getting by are effectively passed by. This is particularly so in the case of people who are renting and already paying heart attack-inducing rents, often for properties that are damp, cold, draughty or mouldy. An Teachta Leddin mentioned mould in his contribution. In my constituency office in north Kildare we are experts on mould. We see so much of it in photographs from homes on which taxpayers are lashing out money in the housing assistance payment, HAP, to landlords who, in theory, are supposed to rent decent properties but, in practice, do anything but. That is another transfer of wealth. There is no incentive in this scheme for landlords to do the decent thing by their renters. As my colleague, an Teachta O'Rourke, pointed out, the plan reheats the 2019 target of 500,000 deep retrofits and 400,000 heat pumps by 2030. Sinn Féin allocated €75 million more than the Government in our costed alternative budget to do just that. The Government's scheme directs a majority of publicly-funded supports to people with private means, just like in health, where fast access is decided according to what you can pay, not what you need. The retrofitting scheme is the same.
We need to retrofit the whole housing system. I could not get up to speak without mentioning the heartbroken mother in north Kildare whose children could not sleep last night. They were sleeping in a caravan and were terrified it would topple over and be blown away. They are desperate for a home but have nowhere else to go. The mother's little boy could not go to school today because he was up all night petrified that his mammy and the rest of his family would be blown away in the caravan. They could not sleep last night for raw fear. How does the Government sleep at night?
The vast majority of people do not underestimate the urgency and the necessity to address climate change. Protecting the earth for future generations is not just something we choose to do; it is something we are obligated to do as responsible citizens.
The concept of the national retrofitting scheme is smart and ambitious. The positive impact of a reduction in emissions if up to 70,000 households were to avail of the retrofitting scheme between now and 2030 would be something Ireland could be justifiably proud of on the world's climate stage. The potential for this scheme is enormous in many ways. It is, however, a double-edge sword in crucial areas, and we have to be realistic about it. The scheme has a vision to bring about great benefits on one side but its capacity to deliver is stymied by major obstacles that will prove difficult, if not impossible, to overcome.
One significant obstacle is that availing of this much-needed cost-saving opportunity may not be a possibility for many families. The initial outlay would push their household budget to its limit. For many, that limit is already stretched. It is a time of financial struggle and a time of trepidation and fear about family budgets. The message I am getting from Tipperary households is that very few have surplus money. While they need and want to retrofit their home, the chances of that actually happening are slim. It is highly unlikely they will be able to afford 50% of the cost of carrying out this work, even though they are acutely aware of the long-term benefits of it. Lending institutions will not entertain them, and low-interest loans at 3.5% from the Government still involve regular repayments, a commitment many cannot undertake. The promise of future energy savings will not feed a family in the intervening weeks and months.
Another major issue of concern is the serious shortage of skilled workers in Tipperary and across the country. Thousands of skilled workers of all ages left Ireland during the recession. Some have returned but a large majority have settled in other countries and may never return within their working lives. A retrofitting scheme with a duration of eight years will not entice those workers to uproot again to come back to Ireland. We have lost those invaluable skills as other countries scrambled to employ our carpenters, electricians, scaffolders and plumbers. At present it is impossible to engage skilled trades.
There is also the unprecedented need to provide housing at this time. That task requires many of the same skill sets retrofitting projects do. How will the shortage of skilled workers be met to carry out all this work? This is a glaring obstacle. The skilled workers are simply not available, and no number of ambitious plans for building or retrofitting can change that fact. During the boom times in Ireland it was possible to build 90,000 houses in one year. Irish and overseas tradesmen and workers made that possible. If we were to attract tradesmen and workers from outside of Ireland, how would we accommodate them when people already living here cannot find or afford accommodation? What realistic incentives could we offer them outside of work?
The scheme, if a sufficient number of tradespeople were found to work on it, would be a godsend to apprentices across the country. It has proven increasingly impossible for apprentices to get placements with the trades to undertake the on-the-job training that forms part of their qualifications. This scheme could encourage more to enrol for apprenticeships, resulting in a win-win situation for both the present and the future of trades in Ireland.
Overall, the concept of the retrofitting scheme is good, but important obstacles need to be thought through and overcome before it is fully fit for purpose.
As we appear to be exiting the Covid pandemic, our next challenge as a society is the rising cost of living. Everyone is aware that the cost of day-to-day living is now rising at an unprecedented level. Whether it is the cost of our grocery shops, the cost of light and heat in our homes or our transport costs, everything is on its way up. From my experience, and from dealing with my constituents in Louth, the dramatic rise in heating and energy costs is most alarming. Many of those I have spoken to have experienced massive increases in their heating bills since last year; in some cases they have doubled. This is unsustainable and will lead to fuel poverty if nothing is done about it. I welcome the recent announcement by the Government on support for homeowners to improve the energy efficiency of their homes, although I fear the devil could be in the detail when homeowners begin to access the scheme.
Before we speak about the Government support scheme, it is important we discuss why there has been such a dramatic increase in the cost of heating a home. The Government, along with its colleagues in the EU, must address the reasons energy costs have increased so dramatically and seem set to continue to rise. There is no doubt but that we have to address the issue of home energy efficiency, but we also have to address the root cause of costs rising so quickly. This affects not just heating costs but also all businesses, which now face unprecedented energy cost increases, which, unfortunately, will have to be passed on to the end consumer. That is the same consumer we are trying to help with energy supports. What would happen if a consumer were to invest in the energy upgrade but his or her other bills, such as grocery or transport bills, continued to increase and eventually wiped out the gains made? Furthermore, the cost of building materials has increased dramatically in the past 12 months, and the question must be asked, are all these increases justified? The cost of insulation and timber, in particular, has increased dramatically. Is this big rise in costs justified? As I said, we have to address the root cause of these increases.
Getting back to the recent Government announcement, I welcome any initiative that will help a homeowner to improve the energy efficiency of his or her home. It is important that a person's home is comfortable and easy to heat. The last thing we want is for someone to be afraid to turn on the heating because of its cost. We have to eliminate fuel poverty. The Government announcement stated that the Government intends to have 500,000 homes upgraded to a BER rating of B2 by 2030. The announcement stated that measures included a new national home energy upgrade scheme, providing increased grant levels of up to 50% of the cost of a typical deep retrofit to a BER B2 standard. I welcome this but I have some serious concerns about it.
The main thrust of the scheme seems to be encouraging homeowners to invest in heat pump technology. While I welcome that, we need to discuss how practical that will be. Heat pumps use electricity as their fuel. The first question I have is on how we will generate the electricity to satisfy the massive increase in demand from heat pumps. It is no secret that we are running very close to full capacity in respect of electricity generation at present. What will happen when the demand on the grid suddenly increases because of all these additional heat pumps on the system? Has anybody done a study on that to see how the grid will cope with that? This applies to electric vehicles as well. How will the grid cope with an additional 1 million electric vehicles on the road by 2030? The other question we must address is on how we will generate our electricity. What would happen if all these homes were to use increasing amounts of electricity in a more-than-efficient manner yet electricity continued to be generated in a manner that is bad for the environment and not cost-effective?
The other thing we must consider are the skilled tradesmen who will be required to carry out these works.
At present, it is almost impossible to get tradesmen to do work as they are all so busy. Where will the new tradesmen come from? We are targeting 500,000 homes to be upgraded by 2030. By my calculations, they will have to upgrade an average of 1,300 homes every week from later this year until 2030 to meet the targets. I fear this is unachievable unless we have the skilled workforce to carry out the work. I would like to hear the Government's response on this. For these schemes to work, we need to see real and verifiable results. We do not want a box-ticking exercise leading to no improvement in homes.
There are 1.4 million houses in the State in need of insulation and, according to the Construction Industry Federation, 130,000 non-residential buildings in need of same. In 2012, I detailed a costed plan that would have seen the deep retrofit of these homes. It would have cost €14 billion in 2012 to do so. It would have brought the energy efficiency up to a C1 rating. At the time, an investment of €10,000 into a home, according to IIEA, would have brought the average household a saving of €1,496 per year and have helped Ireland reach its 20% energy efficiency target by 2020. The Government plan, if extrapolated to the same level of homes, will cost the State €24 billion. That is €10 billion extra to be paid by the taxpayer because the Government refused to listen to the good advice of an Opposition Deputy.
When I launched my deep retrofit plan ten years ago, tens of thousands of construction workers were leaving Ireland for Canada and Australia. Implementation would have meant we kept those skilled workers in this State at a time when we needed to have them ready for the housing crisis that was about to come. The Government's plan is to quadruple the number of skilled workers from 4,000 to 17,000 by 2025, at a time when there are radical skills shortages and wage inflation in the construction sector. The lack of skilled workers and proper regulation will be among the biggest challenges. This country is already dealing with a crisis of mica for many people. We are paying €1 million per school because of defects in 40 schools built by one builder. Just under 200,000 houses were built during the Celtic tiger years and it is estimated that half of the apartments built have defects in fire safety and structural problems. We are in a situation where we do not have the necessary skilled workers, are seeking to ramp it up and trying to do it so as to make sure the crises of the past ten years do not happen again.
A constituent of mine gave an example. She applied for a deep retrofit grant in 2019 and moved out of her house in August 2020 for a 12-week period. She and her family are still outside of their home and dealing with a disaster of a builder who was listed on the SEAI website as a contractor to carry out deep retrofits. There are already families suffering from the inability of some to deliver what they are meant to. Everything done to her house was substandard. She has contacted the Minister, Deputy Eamon Ryan, a number of times and had meetings with the CEO of SEAI but is getting nowhere. They are at the end of their tether. I predict that under this Government we will see many people in her situation.
I support deep retrofit. It is low-hanging fruit. It saves energy and is by far the best way to reduce our carbon footprint, save money and make homes warmer and more comfortable. Saving energy is the most important thing we can do. It is better than producing new renewable energy and we could be more far more ambitious with regard to saving energy in this State. I drive past the justice building in Navan every day and it looks like Las Vegas with many blinding lights lit up through the night. The Government is glacial in rolling out the retrofit programme. My worry is the Government had a target of 50,000 homes per year and has not once hit 20,000. Even in 2020, only 18,400 were hit. The Government is making promises about what it will deliver on targets it has not met so far.
I welcome the scheme. It is a huge step forward. It is a no-brainer. We all recognise that capital expenditure of the past looks cheap, but in the future and the present it looks dear. If we delay this, it only gets dearer. I hope we have learned our lesson. I spoke last night about a pier that had planning permission in 2008 and was costed at €7 million. The budget estimate now is €20 million for the same pier with the same planning. In 14 years it has doubled, so let us get on with the job.
I welcome the scheme and think the targets are laudable. I particularly welcome the enhanced scheme for those who want to do a limited amount of work. We have to look at whether these need to be extended. There is an issue I will raise with the Minister of State and he might raise it with his senior colleague. The Minister of State will understand why I reference that colleague. It is because when that colleague was Minister previously and there were schemes on energy, etc., the islands got a higher rate of grant and had higher ceilings because the cost of doing building work on an island is higher. I ask the Minister of State to remind the Minister, as I will, of what he did before, how well it worked on the islands and the huge success of energy schemes on the islands, and ask him to put the same process in place for this scheme. That would be important.
I understand the turnover of the company doing it has to be €1 million. For island companies doing it on an island, that is unachievable. Companies need to be solvent and capable of doing the job because we do not want the kind of situation Deputy Tóibín spoke about, but small builders often deliver better. We know of all the one-off houses built around the country to high standards by small builders contracted privately. It is important that SEAI has high standards in terms of accreditation but, particularly in dispersed rural areas and most particularly on islands, turnover is not the only measure. Sometimes small is beautiful. The Green Party used to always preach that gospel.
I have seen in the last 14 years scheme after scheme announced with great fanfare, huge targets, money put aside and the whole thing but because of small rules that did not get tweaked when the scheme was not working, we did not get delivery. When there was a problem, instead of tweaking it and doing keyhole surgery, they had a big review that took a year or two and made a few hundred recommendations. By the time they got around to changing it, many opportunities were lost. This has to be kept under constant monitoring and whatever is holding it up has to be examined and quickly fixed and changed. If that is done, the targets will be achieved. I have no doubt problems will arise and small quibble clauses will be found that are making the scheme unattractive.
I welcome the one-stop shop. I think that will be a big help but if it is not delivering, change it and make sure we deliver. It can be done.
This is an ambitious plan in that the retrofitting programme aims to make at least 500,000 homes warmer, more environmentally friendly and cheaper to run over the next eight years or so. This will be the largest infrastructural investment this decade, with the State investing €8 billion and a similar amount spent by homeowners.
This programme will need to achieve 50,000 to 70,000 retrofit completions each year to reach its goal of retrofitting 500,000 homes by 2030. Last year, only 18,000 homes were retrofitted in Ireland.
Residential emissions account for about 11% of Ireland's total greenhouse gas, GHG, emissions and generate 7 million tonnes of carbon dioxide every year. Irish homes use 7% more energy than the EU average and pump out about 60% more carbon dioxide. Affordability is going to be one of the biggest stumbling blocks for the project. We must incentivise homeowners to complete the full programme of works to obtain at least a B2 BER rating. I call on the banks to provide a special package tailored to this scheme to provide low-interest term loans for homeowners who wish to invest in their homes. According to official estimates, a deep retrofit will cost a maximum of €66,000, which means that the State will invest €25,000. This leads to a net overall cost of approximately €40,000 for those going from the lowest energy BER to the highest.
The retrofitting of homes is not only to make life much better, cheaper and less damaging to our planet; it can even be a matter of life and death in respect of securing warmer homes for families and especially for older people. It can also increase the value of our homes. The ESRI has suggested that every point a house moves up the 15-point BER scale adds 1% to the value of the house. To put this another way, for every euro spent on retrofitting, two euro is added to the value of the property. People are therefore investing in their homes to make their lives more comfortable, as well as adding value to their homes.
Some concerns have been expressed to me at a local level. These include the role of the one-stop shop and its management of the entire project. It has been suggested that there will be too much bureaucracy, as there has been in past projects. Concerns have also been expressed that the entire cost of the home energy assessment is borne by the homeowner. Perhaps some of this cost could be grant aided, if a project is completed. Another possible issue is whether enough contractors with suitable workforces will be recruited. The training of staff should not be too onerous and costly.
Regarding my constituency of Clare, there are 43,348 households in the county, according to the most recent census of 2016. Of these, 40,000, or 92%, were built before 2010, which means they were constructed to a lower level of insulation and energy conservation. Some 93%, or just over 40,000, of these households in Clare live in a house or bungalow, while 5%, or 2,703, of households are living in houses rented from the local authority. If we are to achieve these ambitious targets, we must front-load the process of retrofitting these homes by providing funds to the local authorities in the next two to three years. There are 23,500 one or two-person households. Many of these people are elderly and may need further assistance to partake in this programme. More than half, or 25,640, of the homes in Clare are heated by oil-fired systems. A further 15,000 homes are heated by gas, coal, or peat-fired systems. Retrofitting these homes would lead to a dramatic reduction in Clare's carbon emissions.
To review the progress of this programme, I would like to see a monthly update being provided by the SEAI. I refer to something like what is provided in the context of the national broadband plan, NBP, in respect of the website showing information on how that project is progressing. I would like to see similar information on retrofitting being supplied for every local authority area in the country. The information should include the numbers at application, design and construction stages and those completed, as well as the BER rating achieved. The framework for change has been set out. We are now planning the work and we must endeavour to deliver on the plan. The fewer steps we take now, the more we will have to take in future to meet our targets for 2030 and 2050.
I welcome the scheme that has been presented to the House. It was a critical element of the programme for Government for Fianna Fáil and for me. It is the first real tangible link that has been made for households between the carbon tax revenue and their transition, beyond the existing warmer homes scheme, and we welcome the improvements announced to that scheme as well. I am particularly conscious of the 80% grant for works costing up to €3,000 to accommodate endeavours such as attic insulation, cavity insulation and draughtproofing of windows and doors. It is essential that an incremental option has been included for people to allow them to improve their retrofitting in a piecemeal process. This measure can allow the achievement of initial savings of 30% in heating costs and a 25% reduction in carbon emissions.
I am conscious there is provision within the initiative for a cross-party steering group to be established to monitor the progress of the scheme. I ask that it be conscious of the targets being set concerning the 50% grant, which has a maximum amount set at €25,000 for overall spending of €50,000. In the event of that measure not realising the ambitious outcome it seeks to achieve, I ask that there be an option for the increase in the 80% grant to a greater amount than €3,000. I ask that it be increased to perhaps €6,000, €7,000 or €8,000 to accommodate the replacement of windows and doors. I also ask that the Government now move to address the issue of hydrotreated vegetable oils, HVO, and for them to be classified and designated as sustainable fuels, as they are in the UK and in the North. They are also having an impact on the reduction of emissions in households, at the expense of a couple of hundred euro spent on the alteration of oil burners.
I again acknowledge the ambition contained in the programme for the electrification of heating and the provision of many household heat pumps. I am also conscious, of course, that we have an energy crisis now. Equally, I am conscious that 40% of our renewables are accounted for by land-based wind generation. When the wind does not blow, then great pressure is placed on the system. Wholesale energy prices rise severely in that context. Prices are also of course impacted because of our reliance on international gas supplies. We are aware of the pressure in that regard and the impact it is having on inflation.
The Government should now begin the process of moving urgently towards the provision of an offshore wind supply. The IDA should be directed to realise the ambition of harnessing the abundance of potential wind energy that is available off our shores to create what could be a European supergrid. Off our south and east coasts, we have the potential to generate 15 GW of energy; 1 GW provides enough energy to power 750,000 homes. We have up to 100 GW of potential energy off our west coast. Floating turbines would make up 75% of that total. There is potential here to generate an industry over the next 20 to 30 years which would be worth €300 billion, which is the size of our economy today. We could potentially be at the start of a pipeline providing energy. This would be in addition to the southern parts of Europe, which have an abundance of solar power.
This is the sort of initiative we need to ensure we will not be sending out the message that data centres, for example, are compromising this country. We cannot, on the one hand, be attracting the best in technological expertise and companies while, on the other hand, saying they cannot store their data in this country. I urge the Government and those in positions of power within it to move towards directing this country along the path of creating a European supergrid, which would have the potential to address the energy deficiencies we are witnessing now.
Some people woke up this morning in cold houses and apartments. Are they doing so because they are fundamentally opposed to the idea of making their homes warmer and more energy-efficient? Of course they are not. These are some of the many people for whom the cost of retrofitting is prohibitively expensive and out of their reach. This plan will be of particular benefit to people with the financial means to avail of it but it leaves out the working families and renters who are struggling to get by daily. The way it is designed basically facilitates the transfer of wealth. Many people in society are paying a disproportionate level of carbon tax, compared to their income, because they are unable to afford the required retrofitting.
What are they going to get in return? They will get far less than those with greater means, despite their contributions. Under the Government's plans, the people with less and who are being hit hardest with the increased cost of living and fuel costs, are going to be asked to take on more debt to make their homes energy-efficient. This is not an equitable way of rolling out this scheme. Sinn Féin has already proposed a far more accessible way of dealing with this issue by graduating grants based on income or on ability to pay. Such an approach would target those most in need, and target them at an earlier stage given their greater need, including those social housing.
As the Government's current plan stands, it will channel money from renters and those on low incomes to those with the means to pay. When it comes to the low-cost loans scheme, it will not be opening until the autumn or winter. Can the Government then really say that it has taken the welfare of families into account when putting this scheme together?
My final point is about ensuring households have recourse in cases where the work carried out is not up to standard. I have been made aware of works carried out in Tipperary that another contractor has found to be substandard. The work, which included windows and heat pumps, was signed off without the owner's consent. The SEAI reinspected the house last October and has not done anything to help since then. The family is now faced with spending at least €20,000 to rectify the problem but has been refused any assistance by the SEAI or the original contractors. I will contact the SEAI and the Department about this because it cannot be allowed to continue. This is a serious issue and there must be some recourse for homeowners who are in this situation. I would appreciate if the Minister would get in touch with us in regard to this case and to outline to the House the level of oversight that will be applied to any works carried out under this scheme in the future.
I have been interested in the significant number of over-and-back exchanges and the conversation in respect of this issue. Even from Government benches, there has been an acceptance that there is a need to look at this scheme. As is the case with every scheme, it is about seeing what works and what does not. I echo what my colleagues said in that what we wanted was a scheme that was more graduated. It seems that the serious advantages will be for those who can afford to put money on the table. That will not apply to a significant number of people at this time because people are struggling with the cost-of-living crisis -and the cost of absolutely everything - and that relates to the cost of housing and renting. Many have said that renters have been left out of this scheme. We accept that steps need to be taken in the correct direction on climate change and reducing emissions. People want to live in houses that are cheaper to heat. Everybody accepts and wants that. We welcome how people can improve their homes incrementally and that a second visit will not be required, which is a definite improvement.
I refer to the attic and insulation issue. That is something we welcome but we need to look at it further. I know a significant number of people who would have difficulty. Sometimes it comes down to windows and doors. People are coming at this from different places. I would like to think that considerable work is being done to ensure that we will have people with the necessary skill sets, that individuals are being trained, that we are considering where and when we will need them and that the actions required will be carried out.
In Dundalk, we have major housing maintenance difficulties and an insufficient budget. We need to revisit this issue. It may require communication between the Department and the Department of Housing, Local Government and Heritage. We need to look at regeneration schemes that have been shelved. We need to facilitate local authorities in carrying out more retrofitting. We must also look at where we can get the best bang for our buck and what exactly we are trying to achieve, because sometimes deep retrofits are not necessary. In some cases they are required. Dunleer Sustainable Energy Community has stated that previous works it carried out on many buildings would not fit the current criteria, although it provided substantial improvements. We need to look at and reassess these issues.
I sat in on the launch of the retrofit programme with the Minister before it was announced. Many people were there and we discussed many of the different aspects of retrofitting. I have been involved in construction my whole life. I know nothing but construction, bar politics. I want to deal with the here and now. During Leaders' Questions yesterday, I asked the Taoiseach why the cost of a barrel of oil, which was $162 in 2008 and we were paying €1.30 for a litre of petrol and €1.42 for a litre of diesel, while the cost of a barrel of oil in 2022 is $93 but we are paying €1.64 for a litre of diesel and €1.76 for a litre of petrol. He said the reason for the rising cost of fuel in this country is due to the price of a barrel of oil. I only received second level education but my second level education tells me that $162 minus $93 leaves $69 worth of a difference. It costs $69 less to buy a barrel of oil now. The problem people have is with the rising cost involved in doing the retrofitting. There is no value for money.
The SEAI gave a presentation on the same day as the launch. When the SEAI representatives brought out the programme, I asked them about the example provided of a three-bed semi-detached house. They told me that it was based on the cost of doing the house last year. They said it would cost €50,000 to carry out a retrofit on a three-bed semi-detached house. They said it would cost the householders €26,500 and they would receive a grant of €23,500. However, they forgot to mention the 17% increase in the cost of insulation since last October. The latter drives the price of the job up while the grant stays the same.
Since this was launched, contractors have been telling me that there will be a lot of work going on but that they have to sign up with the SEAI. The SEAI told me it had 1,700 people who can be contacted to retrofit houses. We asked about the type of people who would retrofit the houses, male and female, and we were told about the different trades that would be needed in certain parts of the programme. I was very concerned when the SEAI said that the lesser end of the scale would be the people who would be doing the attic insulation. Those were the words used. The most important people doing the attic insulation are those whom you would want to have considerable experience. Anyone knows that if the person doing the attic insulation does not fit it properly, it can result in the roof rotting.
I also asked how the SEAI knows the contractor retrofitting a house is capable of doing the work. I used an example of a house in County Limerick that was retrofitted. Insulation was pumped into a super-warm structure, which should not be done because it causes the house to sweat. They have tried to cover this up. They put in a ventilation unit to take condensation out of the house. It has not worked. I sat in that house and saw how the walls went black. I went to the local authority, which sent out engineer after engineer who said they were doing something wrong in the house, when, in fact, it was caused by pumping insulation into the walls of a super-warm structure during the retrofit. This was done because of the inexperience of the people and different contractors who carried it out.
We know there is a massive shortage of skilled trades people in this country. This happened since 2008, when the Celtic tiger economy crashed. Following this, people attended third level and went to other places because there was no work in the construction industry at the time. We have a ten-year gap that was caused by people not returning to the trades. When we were hit by Covid, people who were working in the trades on jobs that were closed down, went on to work in factories and different areas. People left the sector for jobs in which they can work from 9 a.m. to 5 p.m. or 8 a.m. to 6 p.m. and because they wanted to get in out of the weather. Many people left construction and now we are seeking to retrofit houses from the autumn of this year.
There is another increase in the price of insulation and labour this month. There will be one next month and the month after. The costings on retrofitting are not going to be value for money until things equalise out.
Two people in a household who are working are the worst-off people in the country at the moment. They are trying to make ends meet. They do not qualify for anything. They have to pay for everything. The worst off in this country are the working-class people. Those who are not working get something and qualify for different things. Those who are working and are €2 over the threshold get nothing, no reliefs. These are the same people who are trying to feed their children, pay a mortgage or pay rent. If they have only one person working in the house, it is the same scenario. They are the worst-off. The only people this will benefit are those who have the extra cash reserves whereby they can do this themselves or those who will get it done through their local authorities. The officials in Limerick City and County Council said they are only going to retrofit 60 this year out of 5,347. That is their target. They know they do not have the labour to deal with the issues that are going to be in front of them.
We have people being told false information that it was the price of a barrel of oil that was driving up the price of fuel. In 2008, it was $69 dearer to buy a barrel of oil; we are paying less for oil now. We are now going to tell people the truth that it is carbon tax, taxes, VAT and customs and excise that are driving the price of fuel up. It is nothing else. While we need a certain amount of it, do we need the amount the Government is taking? Since 2020, the Government has been taking in €8 billion a year of an increase on the tax on fuel because it is using a percentage model. There is the barrel of oil, the Government puts on its percentage. That is the system. I have asked why the Government cannot reduce the price of fuel and it is saying it cannot. It has just said so. It is using the money it has to do a retrofit scheme to put more pressure on a system that is all oil based, to retrofit houses.
The Government is squeezing the population and 1 million people are below the poverty line. It is squeezing them because of the way it is taxing them. I am asking this be addressed now. A barrel of oil cost $162 dollars in 2008 and costs $93 now. The Government must give the people a chance to breathe. Yes, we need to retrofit but people today need to live and feed their families. They cannot save. They are lucky to make their rent. Let us look outside the box and see that we can help everyone, not only those who are in the local authority houses. We need to help the people who are working class as well. They cannot afford to do a retrofit because the rising cost is too much. I am asking for the Government to look at all people in this country and help them now, not in the future, saying that we need to do this. I want the Government to give me a commitment that it will look at all people and if there are couples who are in a financial position that they cannot retrofit, even though both of them are working, they need to be helped more. The people who qualify; that is fine. The people who have the money to do it, well, they have the money to do it.
I think this is an energy upgrade scheme, as distinct from a retrofit scheme. I raised this in the Dáil with the Minister on 20 January. My issue at that time was the anomaly whereby someone on the free energy upgrade scheme was only entitled to apply once. Someone who might have applied prior to 2018, before double-glazed windows were part of the scheme, could not apply a second time after the windows had been included in the scheme. That has now been rectified, which I very much welcome. Now under the free energy upgrade, which was previously known as the warmer homes scheme, people who applied before 2018 can apply again to get the double-glazed windows. That is a huge factor for people.
I welcome the fact that the Government is looking at increasing the numbers who would get the free energy upgrade scheme, which I will call the warmer homes scheme, to 400 per month from 177 per month in 2021, and that it is going to look to double the number of upgrades. It needs to be looked at even more carefully on a number of levels. This particular launch states that looking at houses and upgrading them for energy is a central plank of our climate action plan. It reduces the cost for the homeowner. It clearly advances the agenda of getting our carbon footprint down and meeting our carbon targets.
I have a number of suggestions. There is a 26-month waiting time on the warmer homes scheme. While I know we are doubling the numbers we are going to deal with per month, I ask that this be looked at again to see if we can expedite it even more. I refer to what is available across all the schemes. The warmer homes scheme or free energy upgrade scheme is the free upgrade scheme and people have to be in receipt of the fuel allowance or other social welfare payments to qualify for it. Then we have the better energy homes scheme, which is a grant scheme for individual houses; and the one-stop shop scheme. The difference between them is that under the better energy homes scheme, the applicant picks a contractor and does the work, and does not necessarily have to reach a B2 rating. With the one-stop shop scheme, which is more comprehensive, the SEAI deals with it from cradle to grave. It appoints a contractor and the property reaches a B2 rating. We need to make certain across the three schemes that the same measures are available. Certainly looking at it, they are slightly different, not significantly different. It may be something to look at.
Some 80% of the cost is going to be made available for attic and cavity wall insulation. We need to find a way that we can fast-track this. That is the grant scheme. It does not place a huge burden on people. If they are going for more to get to the B2 rating, the costs involved are going to be up to about 50%. If the Government could fast-track that scheme, more people could get on it and it could make a significant difference in the context of rising energy prices when it comes to reducing costs for those who are under financial pressure.
Is there a way to fast-track the element of the scheme in question in order that the cost will not be prohibitive and people can get their attic insulation and cavity walls done? Afterwards, when they feel they can afford it, they can opt for the other measures for which they will get a grant of only 50%. That would be a practical measure.
Overall, this is a welcome scheme. It is a question of take-up and delivery. Fundamentally, we need to determine how we can get the craftsmen to do the work. That is a big challenge. A body of work is under way in this regard. For me, the anomalies are now gone from the free scheme, which is important and which means that people can apply twice. It means everyone will now get access to the double-glazed windows. An applicant before 2018 would not have been able to do so. This is very relevant. There should be consistency in respect of measures available across all schemes, including the free scheme, the two grant schemes, the one-stop-shop scheme and the warmer homes scheme.
Personnel must be in place to deliver on the scheme. I want to see the waiting times for the free scheme coming down, if possible. The Minister of State needs to find a way to fast-track the scheme for insulation and the scheme for cavity walls. I am not certain whether those with the necessary skills in this area are more available than others. I will follow up on this with the Minister.
Cuirim fáilte roimh an Aire Stáit. Ba mhaith liom aitheantas a ghabháil don Rialtas fá choinne na scéime seo. Tá gá mór léi agus tá sí práinneach agus de dhíth chun rudaí a insliú agus pumpaí teasa, fuinneoga agus doirse nua a chur i dtithe. Guím gach rath ar an Aire Stáit sa jab tábhachtach atá aige agus sa dualgas atá ar féin agus ar an Rialtas. Beidh práinn ann ó thaobh an one-stop shop. Sin an rud is mó anois.
I thank the Minister of State, Deputy Ossian Smyth, for the work he has put into this scheme. It has been worked on quite comprehensively in recent months. The most important thing now is to get the tendering sorted for the one-stop shop. Already our offices are receiving calls from people who were involved in previous schemes, including insulation schemes. They have the information but do not have the authority to give accurate information because they need to go through a tendering process. That is critical.
There is another element that also needs to be considered. It concerns those in receipt of domiciliary care and the carer’s allowance, who would qualify for the scheme. However, there is an issue with the BER. There is an anomaly whereby those whose houses have a C rating will not qualify; I think it has to be a D rating. The anomaly lies in the fact that many of the houses would have got their attics and walls insulated. It is important that they not be precluded from the 80% grant owing to the showing of initiative in recent years. Even though the windows and back door may be hanging off, the BER will be a key consideration if we are not to discriminate against people who find themselves in this position.
On another issue I wish to raise, could the Minister of State clarify the position? The original criterion referred to houses built before 2006 but the year has now been changed to 1993. That will affect many houses.
I presume we are ready to roll out the tender process for the one-stop shop. It must be initiated as a matter of priority.
May I raise the issue of the mica scheme, which I realise I will be raising in the next hour as a topical issue? There is a great opportunity to incorporate the retrofit scheme into the schemes for houses with mica and pyrite. Many of these houses were built in the past couple of decades. If the householders did not have a problem with mica, they would be going out to replace their windows and doors. There is a hard-to-believe argument that the Department of the Environment, Climate and Communications is trying to push for people to build houses under the old criteria, or the 2007 standards. The 50 mm of insulation required in 2007 has changed to 100 mm. Expecting homeowners who are to rebuild their houses or do the outer leaf to go back to 2007 standards does not make any construction sense or common sense. There is a way of assimilating the retrofit scheme into the mica scheme to cover circumstances where you are building a new house or replacing the outer leaf. I appreciate that the Minister of State, Deputy Malcolm Noonan, and the Minister, Deputy Darragh O’Brien, have set up a working group to investigate this issue. What needs to come out of that is that we do not impose unnecessary bureaucracy on the mica homeowners, who are going through a very difficult time dealing with the stress. We need to give them a win such that the equivalent of whatever they would get under a retrofit scheme if their house did not have mica would be made available to them, without the bureaucracy, hardship and frustration associated with having different rules for different Departments. We are looking for collaboration and cross-government support on this issue. I realise I will be getting into this in more detail in the next hour with the Minister of State, Deputy Malcolm Noonan.
Arís, gabhaim aitheantas don Rialtas fá choinne na scéime seo. Labhair an Teachta O’Donnell faoi na daoine uilig atá de dhíth chun an obair seo a dhéanamh ar na tithe. Níl siad ann. Tá siad de dhíth chun na tithe a bhogadh ar aghaidh, tithe príobháideacha a atógáil nó tithe úra a thógáil. Tá brú ollmhór ann anois mar gheall ar an éileamh do dhaoine chun bheith ag obair ar na tithe agus an obair seo. Dá mbeadh aon bhealach, aon deis nó aon smaoineamh ag aon duine chun daoine, daoine óga ina measc, a fháil tríd an tír nó taobh amuigh den tír, sin an rud is mó.
The programme for retrofitting looks great on paper. If the very ambitious targets are achieved, it will make a huge difference to energy bills and people’s health and reduce carbon emissions. However, there are serious questions as to how the target of retrofitting 50,000 to 70,000 homes per year will be met and how the target of retrofitting 500,000 homes can be met.
Despite the grant of up to 50% of the cost of a deep retrofit, there is a genuine issue with requiring homeowners on low to moderate incomes to come up with €20,000 to €25,000 from their own resources to avail of the scheme.
With regard to local authority housing, last year local authorities were given the rather modest target of upgrading 2,400 homes under the energy efficiency retrofitting programme and the midlands retrofit programme. However, just 1,500 properties were retrofitted, with the remaining 900 to be completed by the middle of this year, they hope. The latest Housing for All progress report attributed the significant delays to the pandemic, citing “reduced capacity in the construction sector and related COVID-19 protocols for surveyors and contractors, given the homes retrofitted under these programmes are occupied”. However, that is not the only reason for the hold-up. A report from Dublin City Council to its housing committee has stated that, with funding at the current rate, it will take 12 years to carry out its retrofitting programme. I am sure that is replicated across the country. The meeting was a special policy committee meeting. Those concerned were advised to have the information in writing.
The second issue is the construction industry’s ability to carry out the works to a high standard.
There are serious questions about an industry with poor regulation that is dominated by subcontracting and awash with bogus self-employment. Of 100,000 apartments, almost two out of every three built in the Celtic tiger years had serious defects, such as fire safety issues, leaking roofs and balconies. As highlighted earlier, 40 schools built by the same construction company all had serious defects which cost the State €1 million each to rectify. It seems to me that there are a lot of builders with the first name Gerry operating in the industry. Shoddy building work, a lack of qualifications, zero numbers in apprenticeships in many trades and a lack of upskilling are a consequence of the shift from direct employment to the casualisation of construction work. Construction firms are employing five subcontractors for every one tradesperson who is directly employed. The industry now claims there is a shortage of 27,000 workers to meet existing demand before the retrofit plan even gets under way. The consequences for the wet trades most relevant to retrofitting, that is, bricklaying, floor and wall tiling, painting, decorating and plastering, have been dire. Between 2012 and 2020 there were no apprentice floor and wall tilers registered in Ireland. In 2020, members of the Construction Industry Federation were employing, as tilers, zero apprentices, 50 people with full-time jobs and 693 causal subcontractors.
There was a long-established tradition of family involvement in certain building trades, such as bricklaying, plastering, carpentry, etc., but if you talk to construction workers today, very few would advocate their trade to their children. Why would they, when they are forced into self-employment with fewer rights, poor conditions and no security of employment? The Joint Oireachtas Committee on Social Protection, Community and Rural Development and the Islands produced a report on bogus self-employment, which, I must say, has received a good response from the Department of Enterprise, Trade and Employment. However, there needs to be a speedy implementation of the proposals in the report. That would be a good start towards the necessary reform of the industry required to make it fit for purpose. A failure to reform the industry could well result in the national retrofit programme becoming the pyrite and mica scandal of the future. To come back to the issue of affordability, the proposed loan fund is welcome and is a recognition that large numbers of households will struggle to avail of the scheme. The Minister, in his opening remarks, made great play of the number of inquiries from the general public in relation to the scheme. Of course, given the huge increases in energy prices and the general cost of living, people will be interested in a scheme that will cut their energy costs. However, inquiring about the scheme and having the wherewithal to avail of it are two separate things.
I welcome the statements made today by Members of the House. The changes announced by Government last week represent the most significant reform of the SEAI schemes since their establishment. However, these supports are just part of our overall national retrofit plan and I would like to take this opportunity to highlight some other aspects. As mentioned by the Minister for the Environment, Climate and Communications, the national retrofit plan was published in November 2021 and it sets out the Government strategy for meeting our 2030 retrofit targets. The plan is designed to address barriers to retrofit across four key pillars: driving demand and activity; financing and funding; supply chain skills; and standards and governance. Successful implementation of the plan depends on ensuring that effective policy action is taken and balanced progress is made under each pillar simultaneously. For instance, there is little point in driving demand when the supply chain is not sufficiently developed to satisfy this demand. For that reason, developing the retrofit supply chain and workforce will be a key priority this year. Building up capacity in the sector from the current levels to a point where it can deliver approximately 75,000 home energy upgrades per year will require the right initiatives to stimulate and support the market to invest and attract new entrants.
The national retrofit plan has already provided certainty to the sector in terms of the commitment by Government to support residential and community retrofit. The budget of €8 billion and clarity on the annual allocations to the end of the decade will provide confidence to the sector to grow due to the resulting large and stable pipeline of work that it will support. The commencement of new SEAI grant schemes and the expansion of the local authority retrofit programme will also allow year-round working. This, in itself, will greatly increase the capacity of the sector to deliver increased numbers of retrofits because it will transform a six-month industry into a year-round industry. I expect that the range of measures in the national retrofit plan will encourage new entrants to the retrofit market, as well as incentivising existing market players to grow. However, new and expanding businesses in the retrofit sector can face challenges as they expand. For that reason, the SEAI will work with these businesses to encourage them to avail of the range of supports available though the local enterprise offices, LEOs, including financial supports, training programmes and mentoring.
As the retrofit industry transforms to accommodate much higher levels of output, the quality must be maintained at a high level to sustain customer confidence and demand. Standards and the existing quality management model will need to evolve to cope with a much greater scale of activity. For that reason, new standards and guidance documents will be introduced. This includes the publication of new guidance for the retrofitting of traditional buildings, as well as a certification scheme for energy efficiency retrofit of dwellings. The network of one-stop shops will also play a central role in maintaining and enhancing the quality of retrofits delivered.
I will now turn to the issue of retrofit careers. Retrofitting homes is a highly labour-intensive sector. As such, it has the potential to produce high-quality sustainable jobs in local communities throughout the country. The report of the expert group on future skills needs, which was published at the end of last year, indicates that we need to increase the number of full-time equivalent workers in the sector from 4,000 to 17,000 by the middle of the decade. This points to the substantial number of career opportunities in the green economy and the important role that retrofit will play in our economic growth and development. Crucially, my colleague, the Minister for Further and Higher Education, Research, Innovation and Science, has provided €22 million for the green skills action programme this year, and €17 million of this budget provision relates to the retrofit and the nZEB skills expansion. That will provide for an additional 2,660 places, bringing the total number of places to 4,550 by the end of 2022. The Department of Further and Higher Education, Research, Innovation and Science is also supporting two retrofit centres of excellence, with three more to be in place later this year. This will further enhance upskilling and reskilling capacity. The Action Plan for Apprenticeship 2021 to 2025 provides a roadmap to a single apprenticeship system that will fully embed apprenticeship as a mainstream route to skills development for employers and prospective apprentices. A number of apprenticeships have also developed and transitioned elements of their programmes to include provisions for green skills. The target of doubling annual apprentice registrations to 10,000 new registrations by 2025 provides a clear opportunity to support the development of the skill sets necessary around the retrofit industry. Figures show that the apprenticeship population has increased to 24,212, with a record 8,607 new registrations in 2021. In November 2021, the Minister for Further and Higher Education, Research, Innovation and Science announced enhancements to the CAO website to include further education and apprenticeship options for school leavers. There will also be information and guidance on national apprenticeships on cao.ie, with information on how to become an apprentice, what you will learn while you learn, and the qualifications that you will achieve. These enhancements to the CAO website ensure that school leavers will have improved visibility of all their options and pathways, including further education and training and apprenticeships provided by the 16 education and training boards, ETBs.
I will now turn to the private rental sector. In line with the design principles of fairness and universality, there is a need to ensure that all housing types and consumer cohorts can participate. Specific measures to stimulate retrofit activity among households vulnerable to energy poverty, approved housing bodies and in the private rented sector were included in the package of measures announced by Government last week. The residential rental sector poses a particular challenge. 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. It is a complex problem that is seen in many countries, and is referred to as the split incentive. In order to address the issue, non-corporate landlords are eligible for the new grant supports under the national home energy upgrade scheme, the better energy homes scheme and the community energy grant scheme. It is intended that non-corporate landlords will be able to avail of the planned low-cost loan scheme for retrofit when it is announced later this year.
A further key step associated with addressing this issue will be the introduction of a minimum building energy rating requirement for rental properties. The Housing for All strategy, which is being led by the Minister for Housing, Local Government and Heritage, includes a commitment to introduce this requirement from 2025. Collectively, these measures will mean the national housing stock is upgraded and tenants get lower energy bills and a more comfortable place to live.
My Department will be working with the SEAI to separately consider the best approach to dealing with apartment buildings that are multi-unit buildings with common areas, rather than individual units. This will be investigated in 2022 to consider approaches to support whole-building solutions. I note that grants are now available to apartment dwellers on the website of the SEAI. That is another innovation in the recent announcement.
Approximately 36,500 local authority homes will be retrofitted in the next decade under the local authority retrofit programme. This programme of work will not only benefit local authorities in assisting them to upgrade and maintain their housing stock, it will also directly benefit householders with an enhanced level of comfort and lower fuel costs. In 2022, 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 to support local authorities to €85 million.
Some Deputies claimed the new plan fails to address the backlog in the Better Energy, Warmer Homes scheme. However, the number of homes being addressed under the scheme is doubling. It was 177 per month but is moving to 400 per month. This will reduce the number in the backlog. It is to be prioritised towards those with homes in categories E, F or G, but those who are already waiting will not be taken off the waiting list. The list will be shorter as a result of these actions and people will get their upgrades sooner.
It was stated by some Deputies that this is a massive transfer of wealth to richer homes and that it is unfair. In fact, 58% of the €352 million that has been allocated in the budget for this year is to go towards people who are either local authority tenants or living on welfare payments.
A Deputy claimed that only ten deep retrofits were carried out in 2021. However, the numbers I presented to the Select Committee on Environment, Climate and Communications last week are that 4,600 B2 deep retrofits were completed last year. This year, we expect to complete 8,600 deep retrofits to B2.
Deputy McHugh asked about the mica scheme. The retrofit scheme will be available to those with mica homes. The two schemes will work together. That is confirmed and the Deputy can contact my office for further information in that regard.
As outlined, the Government has set ambitious targets for Ireland for the end of this decade. These include almost halving greenhouse gas emissions from the residential sector by 2030, upgrading almost one third of the building stock to a building energy rating of B2 or a cost-optimal or carbon equivalent and installing 400,000 heat pumps in existing homes to replace older and less efficient heating systems. This represents one of the most ambitious retrofit programmes worldwide and, for that reason, the implementation of the national retrofit plan and the new measures announced by the Government last week will be grounded in robust governance, oversight and evaluation. A cross-departmental steering group will be established in the coming weeks and chaired by the Department of the Environment, Climate and Communications. This group will oversee and monitor progress against our national targets and develop new initiatives as required. I thank Members for their contributions.