The government's cuts to its Better Energy grants will cost jobs and make it extremely difficult for Ireland to meet its retrofit and energy reduction targets, green building magazine Construct Ireland has warned.
Following the budget, the Sustainable Energy Authority of Ireland reduced grants for cavity wall insulation from €350 to €320. Grants for internal and external wall insulation were also reduced — previously these were €2,000 and and €4,000 respectively, but now separate rates have been introduced for different house types, with the maximum being €1,800 for internal insulation and €3,600 for external.
This is the second reduction in grants this year. When the government re-branded its various home energy grants under the Better Energy moniker in May, it reduced grants for heating controls, boilers and most forms of insulation, and scrapped grants for heat pumps and biomass boilers.
"The government is slashing grants without introducing alternative ways to pay for the upgrade of our housing stock, much of which is poorly insulated and draughty," said Construct Ireland deputy editor Lenny Antonelli.
"When the government launched its Better Energy programme, it said it was the start of the process of introducing new ways to finance energy upgrade work, such as through pay-as-you-save schemes. But this has yet to be introduced, and now the government has cut grants for the second time this year without introducing an alternative financing mechanism."
Just last month, Construct Ireland revealed how an unpublished 2005 SEAI study found that buildings constructed between 1997 and 2002 were systematically failing to comply with fire, ventilation and energy efficiency regulations.
"This comes on the back of Priory Hall too, and now the government is slashing one of the few financial incentives available to improve Ireland's building stock, a lot of which is of questionable quality," Antonelli continued.
"What's more, this will make it extremely difficult for the government to meet its target to upgrade one million buildings by 2020. Retrofitting buildings is a job intensive activity that creates employment, reduces energy use, and if done properly, improves occupant health and comfort."
Leading retrofit contractor Durkan Ecofix has warned that the move will cost jobs.
"As a growing innovative company, we will be forced to freeze our recruitment for next year as we have already seen a marked fall off in demand which is really a fall off in consumer confidence," said the company's Patrick Durkan.
"The reduction in the Better Energy grants is a damaging blow for the industry and country as a whole," Durkan added. He also warned that cutting grants would create a "flight from quality".
"The investment in retrofit is a fully self financing option for the government and we have calculated a return on investment of 25% on the average external wall installation, this is not taking into account the reduction in welfare by taking people off the live register, accounting for the multiplier effect of funds injected into the economy or accounting for health and fuel poverty benefits," Durkan continued.
"In short, this is a poor commercial decision by the current government which lacks understanding of the basic figures, a disregard for our energy reduction targets and a clear detachment from the economic reality of where jobs can be created."