Homeowners will be entitled to apply for low-interest retrofitting loans worth up to €75,000 from early next year, under plans approved by Cabinet.
Minister for Environment Eamon Ryan has received approval from Government for the establishment of a long-awaited €500 million residential retrofit loan guarantee scheme which will be underpinned by resources from the European Investment Bank Group.
Homeowners will be able to borrow €5,000-€75,000 on an unsecured basis for a term of up to 10 years. The Government has said the interest rates would be “significantly lower” than those currently available in the market as a result of the combination of the EIB Group loan guarantee and a Government-funded interest rate subsidy.
The loan guarantee will be signed by Minister for Finance Michael McGrath and officials from the European Investment Bank and the European Investment Fund this week.
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An open call inviting lenders to participate in the scheme will take place and homeowners will be able to apply for the loans from early next year.
The scheme will encourage homeowners to invest in energy efficiency. The exact interest rate that will be offered to homeowners has not yet been revealed. Banks will have to apply to take part, and it is understood work has been ongoing in the background in relation to this. Ministers expect the final offering to be significantly lower than the interest rate available on the market at present for an equivalent loan.
Speaking last weekend, Mr Ryan outlined some of the reasons for the delay in rolling out this scheme, which has been promised since last year. He said the European Investment Bank had not previously engaged in a loan system directly to consumers. Late in the process they found it was not “something they were able to deliver on, so we had to change the approach, using other financing mechanisms”, Mr Ryan said, adding: “we have done that”.
He said it would assist “those households who don’t have the cash to be able to do the scale of the job that they might want to do” and that “the savings you make in the house in the bills help cover the cost of that loan”.
There have been nearly 22,000 home energy upgrades in the first half of 2023, up 150 per cent on last year, according to figures from the Sustainable Energy Authority of Ireland (SEAI). During the same period, the SEAI processed more than 31,500 grant applications across all schemes.
