Low-cost loan scheme for home retrofits ‘imminent’ despite another missed target

Banks have been slow to confirm involvement in much-delayed plan

Another target date for the introduction of low-cost loans for home retrofits has passed but the Government insists the scheme is “imminent”.

The Department of the Environment says loans will be on offer later this month. However, all but one of the main lenders declined to confirm their involvement.

The scheme would enable homeowners in receipt of home energy upgrade grants to cover the rest of the cost with low-interest loans and was first announced in spring 2021.

It promises loans of up to €75,000 from the main retail banks and other lenders at “significantly lower” interest rates than currently on the market.

It is intended to bridge the large gap homeowners often face when undertaking substantial retrofitting works.

Average grants may cover one-third of the cost, leaving homeowners trying to find tens of thousands of euro themselves.

Participating lenders would have a European Investment Bank guarantee and state financing cushion of €500m to cover any losses they might incur.

The idea was raised numerous times in political debates since the 2018 Citizens’ Assembly on Climate Change highlighted difficulties in accessing finance for retrofitting.

It was reannounced in the 2021 autumn budget and again the following year with numerous updates following – each with assurances that it would be finalised shortly.

The main lenders are expected to take part but AIB, An Post, the Irish League of Credit Unions, PTSB, EBS and Avant Money declined to say if they would offer the loans.

Only Bank of Ireland confirmed its involvement.

“Bank of Ireland welcomes the introduction of the Home Energy Upgrade Loan Scheme and looks forward to working with the SBCI on its rollout,” it said. The Strategic Banking Corporation of Ireland (SBCI), is working with the Department of the Environment, the Department of Finance and the Sustainable Energy Authority of Ireland (SEAI) on the scheme.

Only the Department of Environment commented.

“The development of this innovative scheme was a complex process involving multiple stakeholders, extensive due diligence with a range of financial institutions, the establishment of a robust legal framework, as well as the building of the required IT systems across a number of organisations,” the department said.

“The launch of the scheme is imminent, with loans to be available later this month.

“Details in relation to the interest rates available, participating lenders and further detail on the terms and conditions will be available at that point.”

The Government’s Climate Action Plan sets ambitious home retrofitting targets, aiming to get 500,000 homes up to a B2 energy rating by 2030, including installing 400,000 heat pumps.

The SEAI reported recently that grant applications jumped by a third to 67,000 last year but they were mostly for singleitem upgrades such as solar panels or insulation.

The number of deep retrofits, which would get homes close to zero emissions, remains low, with just 3,769 heat pumps grant-aided during the year.

“In surveys undertaken by SEAI and other groups, the cost of retrofit and affordability were cited amongst the biggest barriers for homeowners to undertake a retrofit in 2023,” it said.