What’s the deal with retrofitting?
15 February 2022
If you’re a climate news hawk, you probably saw the myriad of coverage last week around the announcement of the National Retrofitting Scheme.
There were lots of great pieces on how the scheme itself is going to work and initial reactions – and with those bases covered, we wanted to dig a bit deeper.
What exactly is a retrofit? How does it happen? What are the benefits, and what are the challenges?
We reached out to people who had all sorts of expertise to find out – and as you’ll come to see, this is a cross-sector issue that affects housing, health, employment and climate.
First thing’s first: what exactly is a retrofit?
Anyone who has a retrofit carried out on their home essentially improves the energy efficiency of the building, meaning it retains heat better. It will ultimately boost your Building Energy Rating – also known as your BER. The rating follows an A to G scale, like the grades you would get in school.
There are two main ways to do a retrofit – you could opt for a shallow one or a deep one.
As you might guess from the name, a shallow retrofit is less comprehensive than its counterpart and is carried out by filling cavities in your home and having insulation work done on the attic. A deep retrofit is a whole other kettle of fish: you’re talking about insulating the walls, the floors, the roof and bringing in a new heating and ventilation system, according to Irish Green Building Council (IGBC) CEO Pat Barry.
“One is a holistic renovation and the other is little staged interventions over time,” Mr. Barry said.
The longer your house can hold heat, the less fuel you’ll need to be using in order to keep it warm. So while it improves your day-to-day comfort – it also helps address the climate crisis by lowering residential emissions, which currently account for 11 per cent of Ireland’s total emissions’ pie.
And speaking of residential emissions – turns out we’re a bit of an EU outlier when it comes to emissions from our homes, according to Energy Policy Officer at Friends of the Earth Clare O’Connor, who highlighted that Irish households “currently emit 60 per cent more carbon dioxide than the EU average”.
On top of climate benefits, living in a retrofitted home would also lead to better health outcomes, according to Consultant Geriatrician and General Physician Dr. Colm Byrne.
If your home is better insulated through retrofitting, there’s less need to burn solid fuels and would drive down air pollution, particularly in winter.
The particulate matter inhaled from burnt solid fuels pose a number of risks to our health and increases the chance of heart attacks, strokes, heart arrhythmias, dementia and Parkinson’s disease.
Right – so retrofitting is good for the climate and our health. And there’s a scheme to roll it out now?
Yes, it was announced last week and its goals are in line with the Government’s Climate Action Plan – which aims to see half a million homes up to a B2 BER rating by the end of the decade.
This is a massive undertaking by any measure. According to data from the Central Statistics Office (CSO), from 2009 onwards, 843,614 homes across the country were classified as having a BER rating below that above-mentioned B2 rating. Those houses make up over 80 per cent of total BER certificates given out in that same time period. So there’s a long, long way to go.
The Government wants to make that 500,000 household-strong dent into the problem through a combined grant-and-loan set-up. The Sustainable Energy Authority of Ireland (SEAI) would cover up to 50 per cent of the retrofit cost with a grant, and they’re proposing a low-interest rate loan will cover the remaining cost.
To get our heads around that a bit better, take a look at an example provided by the Department of Climate, the Environment and Communication. Let’s say you bring up a D2 detached bungalow to a B2 rating – you’re looking at a total cost of about €49,500, so an SEAI grant would cover €24,600 of that.
According to the Department, you could then opt for a loan that covers a couple of different time frames, but let’s suppose you pick a ten-year loan at 3 per cent interest to cover the rest. Factoring in savings on energy bills, their projections say you’re looking at a total bill of €140 a month for ten years to finance the retrofit.
Still with us? Good.
We reached out to the Department to find out more about the loan system, and a spokesperson said that they are engaging with the Department of Finance, the Strategic Banking Corporation of Ireland and the European Investment Bank in relation to “the development of a residential retrofit loan guarantee scheme” that will enable credit institutions to offer low-interest loans to private homeowners and non-corporate landlords. They added that the target for introducing that loan guarantee scheme is the middle of this year.
According to Paul Goldrick-Kelly, an economist at the Nevin Economic Research Institute, there’s a number of ways these loans could be done. The Government could opt to tender or group them together as one option, but the exact working of this financing is something he’d like to see ironed out.
If the Government can do this right, the scheme would be “an investment more than a cost” and it should pay for itself in direct fuel costs ultimately, according to Mr. Goldrick-Kelly.
Okay, I’m with you. What are some challenges and concerns around the scheme itself?
Experts have highlighted a number of issues over the past few days – and many of them come back to issues of housing, employment, and social justice.
The scheme therefore is a “major step” in addressing emissions from our households, but there is a real risk that without further tailored support for social housing and renters, households will be left “locked-into paying for expensive fossil fuel heating while those we can afford the upgrade reap the savings,” Clare O’Connor of Friends of the Earth said.
Over the summer we reported on the potential issue retrofitting poses to tenants – namely that retrofitting could lead to sharp hikes in monthly rents.
Landlords could require tenants to vacate a property for an energy upgrade, but that means there’s the opportunity for the landlord to set a higher rent or apply a rent increase with a new tenancy, according to Michelle Murphy, a Research and Policy Analyst at Social Justice Ireland.
There’s also the issue that people in rented accommodation might even be reluctant to mention the idea of retrofitting to their landlord for even smaller works, due to concern that they will be asked to vacate for a period of time and there will be a lease with a higher rent to follow, Michelle stressed.
There’s also a glaring question when it comes to this massive undertaking – who exactly is going to do these retrofits?
In a statement they provided to us, the Department of the Environment, Climate and Communications said that the number of full-time employees needed to carry out retrofits will need to “increase rapidly from approximately 4,000 in 2021 to 17,000 by the middle of the decade” – so we’re talking an over-fourfold jump.
The spokesperson said that the Plan includes “a range of initiatives under the ‘supply chain, skills and standards’ pillar” to ensure the workforce and supply chain is in place and added that the Minister for Further and Higher Education has allocated €17 million in funding to support 4,550 places on Nearly Zero Energy Building and retrofit-related courses for 2021.
Overall, the Department anticipates that the Plan will have a “significant multiplier effect, supporting the development of associated supply chains” and will help “support a Just Transition to a carbon neutral society”.
According to Irish Congress of Trade Unions Campaign Officer Macdara Doyle, the announcement of the scheme fits into a broader trend: whereby the Government “uses the term [Just Transition]” without a lot of substance to it.
Mr. Doyle points to the lack of any guarantees within the scheme as it stands to create decent work – and noted that the National Retrofit Programme would have a “huge role” to play in creating decent employment opportunities.
In transitioning to this aforementioned carbon neutral society, you “close the older carbon economy but you’ve sequenced it seamlessly as possible so people can move into the new,” he said.
“All we’ve done so far is close the old, and that’s been the problem.”
An effort needs to be made to connect workers who have lost jobs in agencies like Bord na Mona directly into the retrofit programme and the Government needs to ensure the requisite training would be available to them, according to Mr. Doyle.
The pool of workers who could carry out retrofitting also should be expanded due to the existing and expected-to-grow heavy demand on the construction industry due to the housing crisis, he told The Green News.
58 per cent of the total Government retrofit budget of €352 million is set to go to energy poverty retrofit supports and local authority retrofits. Of that amount, €118 million has been allocated to SEAI dedicated energy poverty schemes with €85 million for local authority retrofit, according to DECC.
Energy poverty – in case you aren’t familiar with the term – is a serious problem in Ireland. Definitions of it vary, but essentially it occurs when you are unable to adequately keep your home warm. About 1 in 6 households across the country experience it.
As the retrofitting scheme stands now, Social Justice Ireland’s Michelle Murphy is concerned it could become a “wealth transfer” to those who can avail of it, meaning that it ultimately won’t address energy poverty.
While the general public are contributing to the funds that subsidise retrofits through carbon and general taxation, the benefits “go to those on higher incomes because it goes to the people who have the €50,000 available to do the deep retrofit of their home in the first place”, Ms. Murphy said.
Those on lower incomes and living in energy inefficient homes are contributing to the financing of retrofitting through taxation and are set to contribute more as the carbon tax is set to increase.
“But if they remain living in energy inefficient homes, then they’re not going to get any of the benefits. So not only will they have increased costs – they won’t have moved to an alternative and they won’t have the health and economic outcomes of a warmer home with lower bills,” according to Ms. Murphy.
She proposes there is a better way of generating revenue to fund retrofitting: looking at the State’s ongoing subsidising of environmentally damaging activities. To date, Ireland subsidies fossil fuels to the tune of €2.4 billion a year, and the majority of that sum is from tax not collected on polluting activities.
The State should “examine each of those and see which are justifiable and which ones aren’t. They need to look at which ones they’ll set a sunset clause on and actually make a decision not to forgo that revenue and take it in to support activities like retrofitting,” she said.
Clodagh Daly of the Community Law & Mediation Centre also noted in her assessment of the scheme that it was “unclear to what extent the National Retrofit Plan has been equality and poverty-proofed”.
She stressed that the SEAI Warmer Homes Scheme, which provides free retrofits to those living in energy poverty, only applies to those who own their homes and stressed that the current target to retrofit 36,500 social homes over the decade amounts to approximately 20 per cent of Ireland’s social housing stock.
In order to undertake a national retrofit programme in accordance with the principles of a Just Transition, a “much higher proportion of Ireland’s social housing stock should be retrofitted this decade,” Ms. Daly told us.
There’s also the issue of how these measures will apply to the Traveller community, which was not clear in the launch of the scheme last week, she added.
Over three-quarters of the Traveller community live in energy poverty, spending on average over 26 per cent of their income on energy, according to a 2019 MABS report.
So – there’s the whistle-stop retrofitting tour you didn’t know you needed. But how will the actual delivery of this scheme go? Will these issues raised here be addressed in the process? We’ll be keeping our eyes glued to any developments that will answer that – and bring you deep dives as they come.
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