The Government’s Climate Action Plan aims to retrofit the equivalent of half a million homes to a building energy rating standard of B2 or higher and install 400,000 heat pumps in existing homes to replace those run on oil or gas by the end of 2030.
After a slow start, momentum is building, both in demand and supply. Last year around 47,9000 home energy upgrades were supported through Sustainable Energy Authority of Ireland (SEAI) grant schemes.
Overall 2023 saw an increase of 76 per cent in upgrades compared to 2022. The target set for 2023 was 37,000, which the almost 48,000 retrofits completed exceeded by 30 per cent.
“Applications were up 35 per cent on 2022 suggesting a growing appreciation by homeowners of the benefits of retrofitting their homes, not only in terms of the warmth and comfort and reduced running costs but also how it significantly increases the value of the home,” says Ciaran Byrne, director of national retrofit at SEAI.
“All of this was achieved against a challenging backdrop. While inflation decreased gradually through the year, the combined impact of 10 ECB interest rate hikes undoubtedly impacted on disposable funds available to homeowner to invest in areas like retrofitting.
“There were also some supply side challenges, where the shortage of retrofit labour, particularly in specialist areas such as plumbing and heat-pump installation, impacted some companies’ ability to scale.”
The standout performance last year came from the residential solar panel scheme, he adds, attributing it to the range of incentives available, the ease of installation and use, and the immediate benefits to homeowners both in terms of reduced energy costs and the self-generation of renewable, sustainable electricity.
At the same time, while heat pumps were up 65 per cent last year, even faster uptake of those is needed in the coming years, he points out.
Heat pumps are a more challenging technology to deploy than solar panels because home insulation and air tightness levels must be above adequate for efficient operation.
“However, as heat pumps become the norm in new-build homes, more people are experiencing the increased warmth and comfort a heat pump gives,” says Byrne. “This year we will focus considerable attention on homeowner awareness and education as well as supply chain development to build towards the ambitious Climate Action Plan targets.”
Any day now a Government-backed low-cost loan scheme is set to be launched for retrofits which, the SEAI predicts, will significantly address the affordability challenge its surveys have identified as one of the biggest barriers for homeowners to undertake a retrofit.
Though details are as yet scant, the new scheme will provide access to an unsecured loan of up to €75,000 for a term of up to 10 years, which will help nudge a number of people over the retrofitting line.
The launch of the SEAI’s One Stop Shop service, in 2022, has already helped “to move the dial” on retrofits, says Stephen Prendiville, sustainable infrastructure leader at Deloitte Ireland.
This is a panel of preapproved retrofitters that can provide a seamless service, project managing a retrofit from start to finish, from conducting home energy assessments to organising grant applications to project managing the contract works.
But while momentum has been building in relation to retrofits, significant challenges remain.
“If you look at our housing stock, we still have a mountain to climb,” says Prendiville, who points to the prevalence around the country of single-use family dwellings, most of which still have oil or coal as their primary heat source.
“The industry is scaling and meeting the volume retrofit opportunity – apartments, social housing, big estates – the places where they can go in and do 40 homes at a time. But that is still a way away from people actually being able to get a contractor for a single dwelling.”
Concern over the availability of skilled labour is flagged in the recent SEAI report as the biggest risk to meeting national targets.
“The grants are there, however, and are pretty healthy, and the One Stop Shops are there, but to actually do these things is more difficult, particularly as, with a retrofit, people very often need to vacate their home for a few weeks. So these are the remaining barriers,” says Prendiville.
“But just as with electric vehicles, the more people go and do it, and talk about how their bills have come down, and how their home is so much warmer, the more word-of-mouth there is about it, the more people will sign up to it because all of the right components are in place.”
As sales manager for Mitsubishi Electric Ireland, a market leader in residential heat pumps, David McConnell’s experience bears this out. Currently the bulk of its sales is into group schemes, including housing associations and local authorities, as opposed to one-off retrofits.
“Usually a heat pump goes in as part of a deep retrofit, which includes upgrading the insulation and changing the windows so not every house is heat-pump ready,” he explains.
SEAI research indicates that homeowners are willing to replace fossil fuel boilers with heat pumps but only when their current system needs replacing. The new low-cost loans will help with this, says McConnell.
Simplifying the grants process and making it easier to complete the paperwork required to get one will also be important, he adds.
The focus on skills is also intensifying, says McConnell, adding: “We need to try and attract installers away from oil and gas to move into heat pump technology, so there’s a whole learning curve for these guys too.”
