Painfully slow progress means plan to retrofit 500,000 homes needs a rethink

According to the National Residential Retrofit Plan, which was announced in 2021 as part of the Climate Action Plan, the Government’s aim is to retrofit 500,000 homes to a building energy rating of B2.

That’s an ambitious undertaking. According to Census 2022 figures we have some 2,125,000 permanent dwellings, so we are talking about retrofitting just under a quarter of the State’s housing stock in a decade. The plan also aims to install 400,000 heat pumps in existing premises to replace older, less efficient heating systems by the end of the decade.

How is it progressing? According to the Sustainable Energy Authority of Ireland (SEAI), 15,246 property upgrades were carried out in 2021, some 27,199 last year while the target for this year is 37,000. If that comes to pass, the total for the first three years will be just under 80,000 or 16 per cent of the 500,000 target. Of course, the quantity of property upgrades is one measure, the quality is another.

Given that 70 per cent of Ireland’s housing stock is at least 40 years old, it’s clear most properties will require deep retrofits; hence the target to achieve a BER of B2 or equivalent. The SEAI says that of the 27,199 upgrades last year, just 8,481 were up to B2 standard. Based on those figures, only around 5 per cent of the 500,000 B2 target will be reached by the end of the year. Whatever metric you use, it’s clear the National Retrofit Plan requires emergency life support if it is to have any hope of achieving its carbon reduction targets. At this juncture, the most appropriate slogan might be: “little done, a massive amount to do”.

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Why are the numbers so low?

The prospect of moving out of your home to facilitate works can be daunting at the best of times, but the lack of rental properties makes the process even more unappealing

Taking on a retrofit, in the current environment is not for the faint-hearted. A deep retrofit can involve multiple energy upgrade measures: wall and attic insulation, replacing windows and doors, addressing air tightness and ventilation while also installing renewable heating and energy sources such as heat pumps and solar panels.

[ The retrofitting race: Demand is rising for cost-effective and environmentally-friendly living spaces ]

It also typically means moving out of your home for several weeks and putting your possessions in storage. The prospect of moving out of your home to facilitate works can be daunting at the best of times, but the lack of rental properties makes the process even more unappealing. Remaining in situ clearly brings its own challenges.

And of course, there are the costs. Depending on the work required, a deep retrofit can cost anywhere between €50,000 to €80,000. Even if your home was built post-2000 and requires less work, the costs will still run to circa €25,000. Given that consumers are contending with high inflation and interest rate increases, it’s clear many people – even if availing of substantial SEAI grants for 50 per cent of the total – are not going to be in a position to take on these kinds of projects.

Main barriers

That was borne out in a recent survey carried out by the Society of Chartered Surveyors Ireland (SCSI), which aimed to uncover what the main barriers were to achieving our retrofit targets.

Some 44 per cent of respondents said they believed the availability of finance/lack of sufficient grant funding were negatively impacting the ability to reach the targets, while 41 per cent claimed labour supply shortages were the main barrier. Rising construction costs were also clearly a factor.

Feedback from the survey indicated that the current retrofitting support grant is not sufficient to ease the costs involved. It also highlighted that the gap between the cost of retrofitting and the market value on completion could be challenging.

In terms of potential solutions, nearly half of respondents said grant funding needed to be improved and simplified, while 22 per cent listed “increased capital allowances/reduction in VAT” as another viable solution to bridge the gap in costs.

While SEAI grants are available to cover up to half the costs of a retrofit, it is clear that many homeowners do not have access to the upfront sums required to undertake them. Many will attempt to do it piecemeal. Jennifer Whitmore TD for Wicklow was one of these, who lived in her house while retrofitting it over a two-year period. While very pleased with the results, she described it variously as “way too expensive”, “a bureaucratic nightmare” and most colourfully as a “pain in the arse”.

Homeowners are already struggling to find tradespeople to take on these projects and as the numbers ramp up, this will become more of an issue

The SCSI supports increasing grants, promoting them more and reducing the red tape around them. The SCSI would also support the introduction of long-term, low interest green loans. This would be a way of overcoming the problem of people not having the cash up front to take on these projects while enabling them to finance the loan repayments from the energy savings they make. This is a model often used to retrofit business premises.

[ Why we can’t afford to let the national retrofit plan fail ]

While there are clearly issues with the plan’s performance to date, we shouldn’t lose sight of the prize and the huge benefits that will accrue to society and homeowners from its successful implementation. That’s why it’s so important to get right.

Of course, the Government also needs to address the supply side of the equation. Homeowners are already struggling to find tradespeople to take on these projects and as the numbers ramp up, this will become more of an issue. Increased funding for the training of retrofit professionals is needed.

Inspection regime

Putting an effective inspection regime in place is also important. At present, the contractor who carries out the work gives a declaration that the works are satisfactory. As we know from bitter experience, self-certification can very often be a recipe for poor quality work.

It’s vital there is professional oversight, not just on planning the work but also in terms of monitoring and signing off on completion. Retrofitting the retrofitting is not a place anyone wants to be.

Noel Larkin is a fellow of the Society of Chartered Surveyors Ireland.