Wednesday, 12 July 2023
Nithe i dtosach suíonna - Commencement Matters
I thank the Acting Chairperson and welcome the Minister to the Chamber.
I have raised this issue with the Minister previously. I am aware that it has been one of the Minister's key policy areas in terms the deep retrofit scheme and ensuring that we can make our homes more energy efficient, not only to address the climate challenge - we need to retrofit homes to meet our emissions targets - but also to address increasing fuel poverty and the challenges of heating homes.
We have set, as the Minister has said, a very ambitious target to retrofit half a million homes by 2030 to a standard of B2 or higher. It is a very ambitious plan. Currently, we have hit maybe 3% or 4% of that and we have a considerable way to go in the next seven years to meet those targets.
There appear to be some challenges, in particular, with the one-stop shops and the deep retrofit programmes, and it is important that these are addressed. What I am hearing back from industry, as the Minister will be aware, is that there is a shortage of qualified tradespeople to carry out the work. The grants available, while considerable, are only a fraction of the cost being quoted to potential customers. I had one individual approach me who wanted to install photovoltaic, PV, solar panels in his home and a heat pump. In terms of retrofitting, these are standard enough things we would like to see in most older homes. He was quoted €137,000 for those works. He was being given a grant of €21,000 and the balance was €116,000. There are very few households that can afford that level of outlay for a retrofit. We need people to install the heat pumps. We need people to install solar panels. It is out of reach, I would suggest, for many households.
It appears, and certainly some of the commentary would suggest, that there may be a lack of competition among the one-stop shops, there are not enough of them doing the work, and whatever grant is available seems to be swallowed up by the prices being quoted for individual items on the bill of works. I have seen one quotation for the installation of a heat pump just shy of €20,000 and the grant is €7,000 or €8,000. I would suggest one could probably get a heat pump installed for far less than that. That seems to be certainly on the higher end of the scale and one has to ask the question, are some of the one-stop shops inflating the prices that they are quoting to people in the knowledge that there is a grant available and they are swallowing up the grant that is available? That needs to be tackled head-on with the one-stop shop because it is the only place one can go to get a deep retrofit.
That brings me to my second issue, that is, the one-off grants. Many people will choose, because they will have no choice, to do it piece by piece and avail of the individual grants. With the one-stop shop and with the deep retrofit, one only pays the balance. The grant is applied at the start and one does not have to pay the full amount. One pays the balance, even though it seems to be astronomical amounts. With the individual grants, however, one has to pay the full amount upfront and one claims back afterward. That seems to be an inequity that those with less money unable to do the full retrofit have to find all of the money upfront and then claim the grant back afterwards. I ask the Minister to address that issue, to even it out across both options whereby one would only pay the balance for the cost of works however we can achieve that.
There are some works that are not covered under the individual grants that are covered under the deep retrofit, and that is also a deep inequality. For example, one cannot get one's home energy assessment done under the individual grants. It is costing anything from €500 to €800 just to get one's home assessed and check out its energy rating efficiency. We want all homes to have that assessment done but it is quite a lot of money and there is no grant available for somebody to do that under the individual grants. One cannot get floor insulation, windows and doors, or ventilation under the individualised grants but they are covered under the one-stop shop - the deep retrofit. The one-stop shop really is for people with significant amounts of money or access to money. There are certain grants that people who have less money - those most at risk of fuel poverty, and the ones who want to try to do their best and do it piece by piece because that it is better than it not happening at all - cannot access because they are doing it bit by bit. I ask the Minister to look at that and at least level up the two options - the one-stop shop and the individual grants - to ensure that grants that are available under one pathway under the one-stop shop are also available on an individualised basis. That would at least bring some equity to the way the grants are being applied and would hopefully assist us in increasing the numbers of homes being retrofitted to the standard that we need them to be.
I thank Senator Chambers for addressing a really important issue.
Because of our climate targets, we have to retrofit all those homes below the B2 rating. That amounts to approximately 1.5 million homes. We estimate we will do it, according to the plan, decade by decade. In this first decade, it will involve half a million homes and the installation of 400,000 heat pumps.
Heat pumps are the energy heating system of the future. They are more efficient. They are cleaner. They are more economic. They can allow us use our abundant renewable resources. It makes a lot of sense.
One-stop shops are a key component. We introduced, in February 2022, the whole new retrofitting scheme. There is a variety of different grants and initiatives building on what we were already doing. One-stop shops were one key element in that. It was to pull it together to help householders in what can often be very complex engineering and financing. It was to have an agency that would help deliver that and in the aggregation of that work, help to bring down the cost so that every job is not just a one-off bespoke job and one has agencies which have contractors which can build up scale and experience.
That one-stop scheme is only starting but it is working.Some 900 homes are already upgraded. We are starting to see scale coming. About 16 different one-stop shops are registered and more are coming, so there is competition. If a person is unhappy with the price quoted - from what I have heard recently from others, that one seems very expensive - the best advice would be to get a second quote to see is that consistent.
On a number of points raised, we have to be careful about moving towards one-off grants for such things as doors and windows. We want an integrated approach; that is right. For affordability, some people may go for the one-off grants because they cannot afford the wider package. We will introduce a new loan scheme towards the end of this year that will help to close the gap. Those people who cannot afford the capital or cash to be able to avail of the grants will have a mechanism to do so. We will continue to review and assess the schemes as we go.
The main point I want to make is that this scheme is working. Last year, we had 50,000 applications to the scheme. That was 150% up on the previous year. We upgraded 27,200 homes which is a 79% increase on the previous year. Of those, 8,481 were upgraded to a BER of B2 or better. That is the real, deep retrofit, which is where we want to go. That doubled from the previous year. We had 4,438 homes upgraded under the energy poverty schemes which is up 85% on previous year. We use the carbon tax to fund people, particularly those on lower incomes who could not afford to do some of the retrofitting. That is a key component of this. We have to have a just transition. We have to make sure that those at most risk of fuel poverty are the ones who can benefit most. The benefit of the carbon tax system we have is we know each year that the allocation for that purpose will keep going up. We had a record capital budget of €356 million for this year. That is going to be spent and it will increase further next year.
On the statistics, for context, we set a target for 37,000 home energy upgrades this year. Already in the first half of the year, we have done 21,700. We are ahead of target and the figure is growing. The applications last year show a record 150% increase. They have grown a further 40% this yea. The scheme is working. It is ahead of target, ahead of schedule and making a real difference to people's everyday lives. There has been a 200% increase in deep retrofits so far this year compared with the previous year. The system is working. We will continue to review and revise it. The climate emissions figures will come out tomorrow. I do not expect to see huge progress in some of the other areas but in domestic energy use we are starting to see real reductions. The system is starting to work.
I am aware of some of the statistics the Minister has quoted. We were coming from quite a low base so when we see a 150% increase or a doubling in numbers from 4,000 to 8,000, it is positive and going in the right direction. However, genuinely from my experience of applying through the one-stop shops, I know that shopping around brings back the same quotes. There are issues. Making an application is required in order to get a quote. I ask the Minister to have his Department check how many of those applications resulted in people actually commencing works. I guarantee that the quotes coming back are astronomical. They are unaffordable. The word on the ground, talking to tradespeople, is that people now dismiss the retrofit scheme saying that people are creaming it, they are charging huge money and it is not the way to go. It is better applying for individualised grants and doing it yourself because you are not going to save anything. That is the feedback given to us by builders on the ground. If that is not the case, then that attitude needs to be addressed because the message filtering out throughout the country is that going through the one-stop shops is not value for money.
I appreciate there will be a loan scheme, but with a loan comes interest and a cost of borrowing. That cost of borrowing is being put on somebody who does not have the money in the first place. This will deter people from choosing to do the retrofit, particularly those in their 50s or 60s and those in retirement. They will just say "That is not for me." I genuinely believe there are issues with the scheme. People want to do the right thing but the figures being quoted, not just by one one-stop shop but across the board, are too high. If I have one message to the Minister, it is to check how many applications resulted in work being commenced.
I do not disagree with what the Senator has said. We will continue to revise and review, as I said. I have two points to make. The reason we are seeing the numbers of completed works grow dramatically is that the cost of fuel remains very high by historical comparisons. The advantage of investing in the home is that it brings down fuel bills and improves the value of the house. Houses with a low BER sell for a higher value. In the interim, while living in the house, the experience is incredibly different. It is much more comfortable and there are huge health benefits and so on.
I forgot to mention one other area. There are so many different areas we are working on but one of them is social housing. That is really important. As I said, the first key target is to spend the majority of the money the State has on those on lowest incomes. One further development I expect to see is that if we go into an estate, where there may be a mix of social housing and private housing, we start to do both at the same time. The one-stop shops were always going to take time to scale up but where the savings must, will and should come is when work can be aggregated and ten houses can be done rather than one. We expect to see prices coming down there. If, in the interim, as the Senator says, the price is very high, the householder has the option of doing it on an item-by-item basis. We are not restricting that. However, the one-stop shop is designed to get aggregation to bring the cost down. I will continue to review, exactly as Senator Chambers said, the number of applications converting into construction. Mechanisms that show flexibility and help the one-stop shops and householders to aggregate are the key next step.