To efficiency and beyond: What does a national retrofit strategy mean for the Irish construction industry?

by | Apr 4, 2022

The National Retrofitting Scheme launched February this year contains a suite of supports for homeowners to access home
energy upgrades, for warmer, healthier and more comfortable homes, with lower energy bills. The National Retrofit Plan, which the scheme supports, identified a need to upgrade half a million homes to a Building Energy Rating of B2 by the decade’s end. This in support of the Climate Action Plan which indicated the need to reduce residential emissions by up to 50 per cent of 2018 levels.

However, the figures from 2020 fall far short of meeting the Government’s objectives. That year 18,400 home retrofits were carried out although only 4,000 of those were to a B2 standard, less than one per cent of the final target. Furthermore, only 1,600 heat pumps were installed. That represents only 0.4 per cent of the 400,000 heat pump installations needed before the end of 2030. There is reason for some confidence that those figures should improve – the scheme launched this year significantly increases funding available to homeowners for retrofit projects.

Steps towards climate targets

Dr Ciaran Byrne, Director of National Retrofit at Sustainable Energy Authority of Ireland (SEAI), says: “The new National Home Energy Upgrade Scheme represents a step change in the Government’s ambition in achieving the targets outlined in the Climate Act 2021.” He is optimistic of the Government’s commitments to retrofitting Ireland’s homes with the investment coming from Government to back it up saying: “In this regard the National Development Plan hasallocated €8billion to domestic retrofitting up to 2030.”

The scheme increases grants funding for homeowners to cover up to 50 per cent of the costs typical of a deep retrofit, this is up from 30 per cent previously. The scheme also works to provide “an unprecedented opportunity” for homeowners to access retrofitting works for their homes, setting up ‘One Stop Shops’ to carry out all aspects of the retrofit including “surveying the home, designing the upgrades, managing the grant process, helping with access to finance, engaging contractors to deliver the work and quality assuring the work.”

A key pillar of the Government’s approach is to drive demand for retrofits, which in turn creates the environment for a sustainable business plan for the industry to carry out the work.

Confidence to invest

The Government’s funding and communication strategy, “will give the construction sector the confidence it needs to invest in staff and equipment in order to do this work,” says Dr Byrne. This sentiment is echoed by the Government saying the scheme will, “will stimulate the creation of high-quality jobs throughout the country.”

The benefits to the industry will be to generate interest in, and demonstrate the viability of, entering the workforce to carry out retrofits. Indeed, the Government has set a high priority on improving supply chain, skills and standards. The Government writes in the National Retrofit Plan: “There is little point in driving demand when the supply chain is not sufficiently developed to satisfy this demand. The importance of this cannot be overstated – bottlenecks could otherwise emerge hampering progress and exacerbating the existing imbalances within the retrofit sector.”

The plan expects the need to be able to deliver roughly 75,000 home renovation projects per year. Government focus aims to address industry certainty, worker and skills shortages, supplier red tape, and fragmentation.

SEAI’s Dr Byrne notes: “Detailed engagement with the construction industry over the last 18 months has taken place.” The Expert Group on Future Skills Needs (EGFSN) published a report examining the industry retrofit needs, among other zero carbon initiatives.

‘There is an opportunity to promote the retrofit sector as a high quality, stable, secure sector within the overall construction industry, as long-term decarbonisation targets are set in law’, the report states. The report’s labour forecast found that the industry workforce will need to double from 2020 levels to reach 80,000 by the later part of this decade.

“This sends out a strong signal to workers and school leavers that there will be steady work in this sector over the coming decade,” says Dr Byrne. “The industry asked for certainty so they can invest in skills and capacity.” The EGFSN report makes the recommendation to ‘improve the availability and flexibility of retrofit programmes in order to incentivise and facilitate employers in releasing staff for training.’

The report notes that some blended approaches to the theoretical work of retrofitting could assist businesses in releasing workers for training. It further recommends integrating retrofit training as part of core apprenticeships that are relevant, citing heat pump installation and plumbing apprenticeships as appropriate. The report believes the benefits to the industry and employers will become increasingly apparent as the retrofit sector grows, as is anticipated with the levels of support for the sector provided by the Government.

As Dr Byrne adds: “The industry has consistently detailed that larger companies will enter the retrofit market if the demand can be aggregated by one stop shops and there is long term certainty of the market.”

Home Energy Upgrade Grants

The SEAI is administering a government scheme aimed at making it easier and more affordable for homeowners to undertake home energy upgrades and remove barriers to retrofits as part of the delivery of the National Retrofit Plan.

Measures include:

• A new National Home Energy Upgrade Scheme will provide increased grant levels of up to 50 per cent of the cost of a typical deep retrofit to a B2 BER standard (up from 30 per cent – 35 per cent grants currently). Privately-owned homes, non-corporate landlords and Approved Housing Bodies are eligible.

• Grant supports (under the Better Energy Homes Scheme) for homeowners wanting to take a step-by-step approach to upgrading their homes have also been increased. For example, the grant for heat pumps has increased from €3,500 to €6,500 and the rate for external wall insulation has increased from €6,000 to €8,000 for a detached house.

• An increase in the number of free energy upgrades for those at risk of energy poverty (400 per month – up from an average of 177 per month in 2021).

• A special enhanced grant rate, equivalent to 80 per cent of the typical cost, for attic and cavity wall insulation for all households. For example, in the case of a semi-detached home, the attic insulation grant will increase from €400 to €1,300 and the cavity wall insulation grant will increase from €400 to €1,200. It is expected that these works will pay back in one to two years in most houses.

• The Warmer Homes Scheme offers free energy upgrades for eligible homeowners who are most at risk of energy poverty. Since 2000, over 143,000 free upgrades have been supported by the scheme. A budget allocation of €109million has been provided for this scheme this year. The scheme eligibility criteria will also be extended to include those in receipt of the Disability Allowance for over six months and have a child under seven years.

• A total of €267million (of which €202million is carbon tax receipts) has been allocated for SEAI residential and community schemes in 2022. This investment will support almost 27,000 home energy upgrades, including over 8,600 homes to a BER of B2 and 4,800 free energy upgrades for households at risk of energy poverty.

What the SEAI and Government says:

“SEAI, through Government funding, has already supported 450,000 home energy upgrades. This announcement by the Government  demonstrates its commitment to assisting homeowners by making home energy upgrades more accessible and affordable. Through these new measures we look forward to supporting homeowners to achieve a warmer, cosier home, with lower energy bills, while also helping to achieve Ireland’s ambitious climate targets.” William Walsh , CEO of SEAI

“The Government is committing to support people in making their homes warmer and less expensive to heat, while also tackling our climate change crisis. The Irish people responded collectively, and with a sense of purpose, to the pandemic by helping protect the most vulnerable in our society. The climate crisis is just as critical for our children and future generations, as well as people at risk of fuel poverty now. This Government’s commitment to reaching our climate ambitions is clear, and today is another step along that journey.” Micheál Martin, Taoiseach

“This scheme will create thousands of jobs in every county in the country making homes warmer, more comfortable and healthier. I’m glad to see the move towards a much more streamlined, customer focused model, with the One Stop Shops making it much easier for people to see what they need to do and how they can get funding. The long term commitment of government funding and our investment in apprenticeships and skills training will allow the industry to build capacity, as well as all other aspects of the supply chain.” Leo Varadkar, Tánaiste and Minister for Enterprise, Trade and Employment

“The urgent nature of the climate crisis and the energy price crisis means that we must act to reduce our energy use and to reduce the cost of heating our homes. The unprecedented commitment from the Government, and indeed all politicians in Ireland, to focus on improving our homes as a centre-piece of climate action is demonstrated here today. We have a 30-year task of transforming our homes. This launch is the one of the key steps we need to take to insulate ourselves from international price volatility and the geopolitics of international energy markets.” Eamon Ryan, Minister for the Environment, Climate and Communications and Transport

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