Thinking Deeper: Financing Options for Home Retrofit

If government plans to retrofit over one million buildings by 2020 are to be met, both the scale and depth of energy upgrades must be increased dramatically. This is a challenge which can only be met if attractive financing options can be made available to consumers. This report presents evidence of a financial barrier which prevents investment in deep retrofit from being made, and restricts the roll out of attractive financing products for consumers. Based on international best practice, five options for overcoming this barrier are presented, and these have been evaluated in conjunction with a number of industry experts, stakeholders and consumers to assess the suitability of each for Ireland. Two Pay As You Save (PAYS) options are assessed, one which attaches the loan to the property (based on a US trial) and another which attaches the loan to the energy meter (based on an upcoming UK trial). Options for encouraging investment from private savings in one’s home (such as Tax Free Savings Accounts or tax breaks) are also assessed for their suitability in Ireland, as is the option of creating a fund through which private savings could be made available to householders who wish to invest. We also assess the attractiveness of setting up a so-called Green Bank. Finally, we evaluate the prospects for traditional financing options, such as green mortgage top ups, green equity release products, and green loans.

Thinking Deeper: Financing Options for Home Retrofit

by Joseph Curtin and Josephine Maguire

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If government plans to retrofit over one million buildings by 2020 are to be met, both the scale and depth of energy upgrades must be increased dramatically. This is a challenge which can only be met if attractive financing options can be made available to consumers.

This report presents evidence of a financial barrier which prevents investment in deep retrofit from being made, and restricts the roll out of attractive financing products for consumers. Based on international best practice, five options for overcoming this barrier are presented, and these have been evaluated in conjunction with a number of industry experts, stakeholders and consumers to assess the suitability of each for Ireland.

Two Pay As You Save (PAYS) options are assessed, one which attaches the loan to the property (based on a US trial) and another which attaches the loan to the energy meter (based on an upcoming UK trial). Options for encouraging investment from private savings in one’s home (such as Tax Free Savings Accounts or tax breaks) are also assessed for their suitability in Ireland, as is the option of creating a fund through which private savings could be made available to householders who wish to invest. We also assess the attractiveness of setting up a so-called Green Bank. Finally, we evaluate the prospects for traditional financing options, such as green mortgage top ups, green equity release products, and green loans.