Home retrofitting scheme hit with inflation and supply chain challenges — SEAI

The national retrofitting programme is facing headwinds from inflation and supply chain constraints, an Oireachtas committee has been told.

The Oireachtas environment committee was told on Tuesday morning that while some 36,000 applications have been made across retrofit schemes so far this year, “unprecedented times” mean that the national residential retrofit plan is “experiencing many of the same challenges facing the wider economy, namely inflation and supply chain constraints in terms of labour and materials.”

Asked by committee chair Brian Leddin if labour supply from overseas should be encouraged, Sustainable Energy Authority Of Ireland (SEAI) head of retrofit Dr Ciarán Byrne said there were increasing numbers of contractors coming on to the scheme, where 328 contractors were now registered. He said the SEAI was seeking to customise apprenticeship programmes, with some targeted specifically for more compact timelines for renewable installers.

He said eastern Europe is “no longer really available” for labour supply, with Turkey, the Middle East and Uzbekistan potential sources, where visa issues may crop up.

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Margie McCarthy, SEAI director of research and policy insights said anecdotally the SEAI has been given information that suggests some supply chain constraints for materials which occurred after Covid-19 have eased in recent months.

However, she said that “many suppliers are reporting difficulties in securing appropriate labour supply” and that “the significant levels of inflation reported for some building products related to retrofit is a cause for concern”.

The committee was told that SEAI is “acutely aware of the potential to further inflate specific markets by simply increasing grant levels and have focused therefore on attracting more contractors to participate on our schemes”.

[ Retrofitting your home: ‘The heat is retained for up to three days’ ]

The SEAI has been given a budget allocation of €267.2 million in 2022, more than half its annual funding. The committee was told that 12 suppliers have registered on the one stop shop system set up for consumers to source providers for home retrofit projects, all of whom are reporting strong pipelines of work.

So far this year, 36,000 applications have been progressed, she said, equating to some 28,800 homes being retrofitted. Over 3,200 home upgrades have been made through the warmer homes scheme, targeted at less well-off households. However, only 231 were up to a B2 standard, the committee was told.

Overall, there have been 16,000 homes retrofitted this year, with strong demand across the programmes and a target of 27,000 for this year, Dr Byrne said. A target of 8,640 homes for B2 standard was in place for this year, he said, and around 7,500 will be done, Sinn Féin environment spokesman Darren O’Rourke was told.

People Before Profit TD for Dublin South Central Bríd Smith said the figures given by the SEAI suggested the State was “way short” of its retrofit targets, with 60-70,000 per year needed to hit the target of 500,000 retrofits to a B2 equivalent by the end of this decade. “We’re piling problems on top of problems,” she said, pointing out that elderly people eligible for the warmer homes scheme would be waiting more than 2 years for their works to complete.

Richard Bruton, the Fine Gael TD for Dublin Bay North and former energy minister, asked whether schemes should focus on shallow retrofits such as cavity wall programmes and installation of updated heat controls, saying at best 30,000 homes would be retrofitted with all schemes or 2 million homes in the state. He asked whether this could result in a “very early win”.

Dr Byrne said there was a near 300 per cent increase in people applying for shallow attic and cavity grants, year on year, which are now supported by a grant worth up to 80 per cent of works. Mr Bruton was told homes constructed from the early part of this century would not benefit compared to homes in the 20th century, and that about half of all homes would benefit from attic insulation and more than 100,000 from cavity wall insulations. Mr Bruton suggested there could be a greater and more visible effect from concentrating on these homes rather than the deeper retrofits, which were smaller in number and more expensive.

Jennifer Whitmore, the Social Democrats TD for Wicklow, backed Mr Bruton’s call for a focus on where works can be done quickly and efficiently. Asked how many homes were on the waiting list for the warmer homes scheme, targeted at less well-off homes, she was told 11,254 applications remained on the waiting list with 4,300 in a “work in progress” status. The average length of waiting time was 28 months, she was told, from application to completion of works. Less than 30 per cent of homes on the list are suitable for shallow works, and with priority given to E, F and G homes which needed deeper works, including new heating systems.

Low-cost loans

A low-cost loan scheme to provide funding for retrofit programmes was due to be in place this summer, but Dr Byrne told Ms Whitmore that it would now not be in place until the first quarter of next year. He said the low-cost loan would assist a “lot of people” but the SEAI had no firm indications of how many people were awaiting information on the loan before proceeding. The delay is being caused by due diligence done by the European Investment Bank, he said.

Asked how many projects had started under the one stop shop scheme which is responsible for deeper works, she was told that 637 works orders had commenced and that 1,270 home energy assessments had been done.

Sinn Féin senator Lynn Boylan also said attic insulation “fell off a cliff” in the period from 2011 to 2019, but was told there was no “significant change” in Government policy which may have driven the change. Dr Byrne suggested the recession following the financial crisis could be responsible.

“If we had have continued on the trajectory ... that’s a significant amount of emissions that would have been saved,” Ms Boylan said.

District heating

The SEAI also updated the committee on the use of district heating systems. Ireland must deliver low-carbon district heating systems at a “faster pace” than elsewhere, the Oireachtas committee was told.

The committee was told up to half of Irish heat demand could be met through large district heating systems, which use runoff heat from industrial and other producers to provide heat to homes and business.

The SEAI told the committee that energy emissions increased by 5.4 per cent and the share of renewable energy used to provide heat remains under 7 per cent.

“Heat is responsible for a quarter of our emissions, and its demand is 94 per cent derived from fossil fuels,” Ms McCarthy said. She told the committee that the SEAI “urgently need further actions and investments to support the widespread implementation of district heating”.

“This is a proven technology which offers the benefit of decarbonisation and energy resilience. In many cases, our mainland European neighbours who use district heating at scale have not experienced the price fluctuations currently in play,” Ms McCarthy told the committee, adding that Ireland’s challenges “is to deliver this at a faster pace than experienced elsewhere”.

“We cannot afford to continue to support fossil fuel heating in our homes and businesses,” Margie McCarthy, SEAI director of research and policy insights Ms McCarthy told the committee. “A clear alternative must be prioritised to support this transition.”

The Department of Environment, Climate and Communications has established a working group to report on the technology by the end of the year.

Ms McCarthy told Ms Whitmore it was “very difficult” to get information from existing data centres in relation to how their heat could be used for district heating systems, and that it would be easier if such a function was folded into the design of the data centre — citing one in Tallaght which is partaking in a district heating scheme.

Fianna Fáil TD for Dún Laoghaire Cormac Devlin asked whether district heating could be run from the waste to energy site at Poolbeg and was told it would be suitable and that discussions are ongoing regarding its use.