Pa Daly (Kerry, Sinn Fein)
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79. To ask the Minister for Environment, Community and Local Government the steps he is taking to ensure the 2026 to 2030 retrofitting and heat pump targets are reached; if he anticipates capital allocation for 2026 will be sufficient; and if he will make a statement on the matter. [60267/25]

Pa Daly (Kerry, Sinn Fein)
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In the last question the Minister mentioned the retrofitting and heat pump targets but the target to retrofit 500,000 homes to B2 standard and install 400,000 heat pumps by 2030 seems to be far behind. The Government has delivered just 12% and 3% of those targets. The Government has often said that investment and delivery will rapidly increase year on year, but the budget for 2026 tells a different story. The Minister said it was a record increase but it has the same capital allocation for retrofitting as the Revised Estimate for 2025 so it is actually a decrease on the promised capital investment of €641 million. Are the targets now null and void? Is the Minister going to accept that?

Alan Dillon (Mayo, Fine Gael)
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The Government and our Department are fully committed to making homes warmer, reducing energy bills and cutting emissions. We will do this through the retrofitting and heat pump initiatives set out in the climate action plan and delivered via the national retrofit plan, which is built on the four key pillars of demand, supply, financing and governance.

Since 2019 we have made significant progress. To date there has been over €1.5 billion in support to homeowners to enable over 228,000 home energy upgrades, including over 30,000 fully funded upgrades for households at risk of energy poverty. Local authorities have delivered a further 14,300 upgrades, including over 7,250 heat pump installations. These are real measures, real upgrades and real savings for households. In parallel, delivery quality is rising. Over 76,000 B2 level upgrades have been supported to date. For 2025 we have allocated over €550 million for SEAI residential and community energy upgrades, including solar PV. This is the highest ever. Budget 2026 provides €558 million from carbon tax receipts and an €89 million increase is expected to be further supplemented through the European Regional Development Fund to keep delivery moving at pace.

We are on track to stay within the residential sectoral emission ceiling for the first carbon budget period to the end of 2025 based on the most recent SEAI assessment. Targets and allocations for 2026 will be set out in the Revised Estimates later this year. Our focus is very much on sustained investment, strong governance and steady expansion of capacity in the supply chain. The Department is very focused on continuing to fund these upgrades and prioritising those who are most in need and we are building on the pipeline for 2026.

Pa Daly (Kerry, Sinn Fein)
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I am not sure the priority has been proven to be those who are most in need. It is not just me questioning the Minister of State’s statement that significant progress has been made. Social Justice Ireland has said the retrofitting scheme constitutes little more than a wealth transfer. The programme for Government made a number of promises to focus on lower income homes to have retrofits each year from 2026 to 2030 but since then there have been zero changes to how the grant scheme is administered and zero effort to tier the grants so that they can be directed at those who need it most because the upfront cost to a home is an astronomical €60,000 to €70,000 which is unacceptable and unaffordable to most people. Most people on lower incomes, especially those who use solid fuel, often in rural, older homes, are locked out of the scheme. It is a bit like the EV scheme where richer people in Dublin and Cork are availing of it more and not those who need it most.

Alan Dillon (Mayo, Fine Gael)
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Budget 2026 has provided increased funding. That demonstrates the level of intent in regard to a €89 million increase and we do expect additional European funding through the ERDF. This funding is very much needed now to make homes warmer, healthier and cheaper to heat. We are also matching that funding with capacity. We are enhancing the grants. We know we need to simplify the application process. We need more one-stop shops. We now have around 26. We have increased the deeper, warmer home supports. We have also looked at new area-based projects. The new home energy upgrade loan scheme has been provided at a rate of close to 3%. These are all initiatives that will build the pipeline we want to see in the coming years. Through the NDP review, we have provided a substantial allocation to support this.

Pa Daly (Kerry, Sinn Fein)
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I accept there is a need to simplify the process because it seems to me there was a lack of planning in that some news reports said householders were told to roll back or change their retrofitting efforts on the basis that they were in breach of planning permission. Only 355 loans have been approved over the last year. If the average loan is about €48,000 that is only €17 million which is far from the game-changing results we were promised. Again, the high concentration of loans going towards the east coast has led to far less uptake in the rest of the country when that is factored into it.

The Minister of State also mentioned solar. The lowest income homes seem to be locked out of the solar revolution. Will the Minister of State take any steps to try and make the retrofitting more affordable, to tier it and to target specifically people in rural areas, older people who use more solid fuel rather than, as Social Justice Ireland said, a wealth transfer?

Alan Dillon (Mayo, Fine Gael)
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Again, we are in the process of simplifying the application process. We understand we need to do more to drive down wait times. We want to continue to deliver deeper, more complex upgrades at an unprecedented scale. The target for next year is over 60,000 upgrades and we are very much looking at accelerating that further. We have looked at cost inflation around much deeper upgrades. They have substantially increased from €2,600 ten years ago to over €29,000 now. There has been a surge in demand and we cannot ignore that but we have action under way in relation to increased budgets, extra SEAI staff, which is really important, and also a stronger contractor management system. I am very much focused on trying to get the target number of applications through to approval stage and allow many homes which deeply require these upgrades to get them in a more efficient manner.