Low-cost loan scheme for home retrofits faces delays

The Department of the Environment is still finalising the details of a low-cost loan scheme for home retrofitting that was originally slated to come on stream last year.

Aimed at allowing households to offset some of the cost of upgrading their home’s energy standards, the Government said 12 months ago that the initiative would be in place in the summer of last year. It would allow households to borrow to fund part of their project costs at reduced rates of interest.

As part of Budget 2023 the Government subsequently announced last September that “just over €500 million” has been made available to the Department of the Environment to go towards “energy transformation, including the national retrofitting and home energy upgrade programmes”. However, the roll-out was pushed back to “early next year”, Minister for the Environment Eamon Ryan’s department told The Irish Times after the budget announcement.

In response to questions this week, spokespersons for the Department of the Environment, Climate and Communications could not say when homeowners will be able to avail of the scheme. They said that “intensive engagement is under way” between various stakeholders, including the department, the Strategic Banking Corporation of Ireland and the European Investment Bank.

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“The development of this innovative scheme is a complex process,” they said. “All stakeholders are committed to finalising the complex details of this scheme so that consumers can access them in the coming months. Further details on the scheme will be available in due course, but it is anticipated that unsecured loans of up to €50,000 will be available.”

The spokespersons added that “significant progress has been made to date” with two open calls for expressions of interest to participate in the scheme completed. “A number of banks and credit unions submitting formal expressions of interest to provide loans under the scheme,” they said.

Mr Ryan told the Irish Sun last month that he had hoped the scheme would be in place in the first quarter of the year but that it will “more likely slightly later now but it will be this year”.

As part of its Climate Action Plan the Government unveiled its ambitious National Retrofitting Scheme last February, aimed at delivering 75,000 home upgrades a year from 2026-2030 to achieve its overall target of 500,000 by 2030. The €8 billion scheme will allow homeowners to avail of Government grants of between 45 and 51 per cent of a project cost.

A key component of the plan was a proposal for a low-cost loan guarantee scheme allowing households to fund the non-grant part of their project costs at reduced rates of interest between 3 and 3.5 per cent.

The Government said at the time that the scheme would be partly funded by the exchequer and partly by the European Investment Bank under Ireland’s National Recovery and Resilience Plan.