PERSONAL FINANCE: Boosting your insulation and retro-fitting your home with other energy-saving measures can mean big savings in the long run – CONOR POPEshows that there are loans and grants out there to help make it happen

A BANK allowing people to top up their mortgages? An Irish bank? For home improvements What is this parallel universe we’ve entered? Is it 2006 all over again?

In recent years, our most venerable financial institutions have been tighter than Rod Stewart’s unfortunate trousers, so you could almost hear jaws dropping last week when Bank of Ireland announced it was giving people the chance to release equity in their homes at a very competitive rate of 3 per cent.

There must be a catch? Well, there is, but it’s not one that most people should be overly concerned about. The money is available as long as it is used to invest in energy efficient home improvements.

The Green Equity Release loan allows homeowners with grant approval from the Sustainable Energy Association of Ireland (SEAI) to borrow the entire cost of their green home improvements and not just the portion of the SEAI grant.

People can borrow from €5,000 up to 90 per cent of the value of their property to fund the energy efficiency improvements and can also opt for repayment terms of between five and 30 years, keeping their monthly amounts at a lower, more manageable level. It should remove an obstacle for many people who would like to, but cannot afford to retro-fit their homes.

The head of the bank’s mortgage division Jonathan Byrne said the move reflected a “nationwide growth in desire to be energy efficient at home, but also the imperative to protect our environment by reducing carbon emissions and our dependence on fossil fuels”.

The Green Equity Release can be used to cover work such as roof and cavity wall insulation, internal wall dry lining and external wall insulation, installation of high efficiency boilers and heating controls upgrades.

Customers can also use their grants and loans to install renewable energy heating systems such as solar heating systems, heat pumps or wood chip or pellet boilers.

Making energy efficient home improvements makes sense. Someone with an average four-bedroom house, built in the early 1970s and with high energy bills, could reduce their total energy costs by 40 per cent by investing €18,000 in home improvements.

This is an average saving of €111 each month which is a significant saving for any household. A spend of €18,000 could include roof insulation, external wall insulation and a new high-efficiency oil fired boiler with heating controls upgrade.

The retro-fit market is growing. SEAI approve on average 1,200 applications for grants every week or over 50,000 a year. Grants of up to €4,500 are available for roof insulation, wall insulation (which includes either cavity wall, internal dry lining or external insulation), the installation of a high-efficiency gas- or oil-fired boiler and an upgrade of heating controls or the installation of a thermostat.

Roof insulation, which can be completed in less than a day and costs around €800, is worth €250 in grants, while cavity-wall insulation, which costs in the region of €1,000, will get you €400.

External wall insulation is a significantly more labour-intensive and time-consuming process and will take more than three weeks to complete for an average-sized house. It costs around €15,000 for a three-bedroom semi, but a grant of €4,000 is available.

Speaking at a conference on fuel poverty recently, the chief executive of the SEAI, Prof Owen Lewis said the three central issues to fuel poverty were income, energy prices and efficiency of dwelling

“We in the SEAI can’t tackle the issue of income, and energy prices are not something we have control over, but we do have a significant role to play in making homes more efficient.

“There is a lot of discussion about alternative energies here but that may be missing the point,” says Lewis. “If we have a bucket that is leaking we don’t look for new sources of water before you first fix the leaks. This is a no-brainer. We have to improve the energy efficiency of our housing stock.”

He says that there are tangible returns to insulation both in terms of reduced energy usage but also health and social benefits.

One of the things that would help people understand the importance of energy efficient homes would be the smart meters that would allow people to see, at a glance, how much electricity they were using. The Commission for Energy Regulation (CER) is currently co-ordinating a national pilot scheme with SEAI, the Department of the Environment, Bord Gáis and ESB.

The aim of the project is to facilitate the full scale national smart metering roll-out. The trial started with the installation of smart meters in 5,600 homes and 600 small businesses by June 2009. For six months, the usage was analysed to establish a standard point for “normal” customer behaviour.

On the basis of this “standard”, a further trial was carried out last year. The SEAI is now collecting all the data from the trials and the ESRI will then publish a cost benefit analysis of the various options. This will form part of a public consultation exercise aimed at helping the CER to present a recommendation to government on the full-scale national rollout of smart meter trialling

While this process many be necessary to make sure smart meters don’t go the way of our electronic voting booths, it does not suggest that people will soon be in a position to see at a glance how much electricity they are using and how to best cut back.

There are, however, alternatives to the State-sponsored energy monitor. The increasingly popular Dr Wattson energy monitor is a sleek looking device that costs not much more than €100. It can be very easily connected to a electricity meter – an electrician is not needed – and will allow you see immediately how much power you are using.

By making simple changes, big savings can be made. By switching to energy efficient light bulbs you will see your lighting bills fall by a staggering 80 per cent. While the bulbs in the past were weak and anaemic, they have improved dramatically in recent years.

Washing clothes at 40 degrees instead of 60 uses 40 per cent less power and the clothes are, generally speaking, equally clean. Reducing your heating by a single degree will knock as much as €120 off your annual heating bill. The simple act of insulating your attic will mean your heating bill will fall by 25 per cent. Lagging the hot water tank saves the average house €2.50 a week – if you live for the next 50 years lagging today will save you €6,500. And then there is standby power. Leaving the TV and stereo on standby and the mobile phone charger plugged in will cost you around €100 in wasted electricity every year.