The dubious wisdom of relying on heroic assumptions about people renovating their homes and buying new cars to cut emissions has been cruelly exposed.
The latest domino to fall is the ludicrous prediction in the Climate Action Plan that €500 million worth of grants would lead to the “deep retrofitting” of 500,000 homes by 2030 on top of the installation of 400,000 heat pumps. These measures are supposed to account for roughly 10 per cent of our emission reductions target agreed with the EU.
According to the ESRI we had deep retrofitted just under 58,000 homes or 11.5 per cent of the target by the end of 2024. The situation for heat pumps is worse with just 3.5 per cent of the target met by the end of 2024. Anyone hoping for a big surge in retrofitting or heat pump installing should forget it. The reality, according to the ESRI, is that most of us can’t afford it and the rest don’t really care.
The ESRI runs through the figures on retrofitting. It costs over €66,000 to deep retrofit a detached house to a Building Energy Rating (BER) of B2 or greater. Even with the State grants that are being constantly advertised the owner is looking at a bill of up to €45,000. If you get a State-backed five-year retrofit loan you are looking at repayments of €770 per month, essentially another mortgage, or roughly €9,000 a year.
READ MORE
In return, you are likely to see your annual bills fall by €700. So you don’t get your money back for 64 years. You must wonder how it is responsible for any government to fund advertising suggesting this is in anyway a good deal.
When it comes to rental properties, the maths are even worse, according to the ESRI. The tenant gets the energy savings and the uplift in the value of your rental property is minimal given the extreme shortage of properties on the market.
And then there are the “behavioural and information barriers” as the ESRI refers to the reason why many of us simply could not be bothered. Almost 40 per cent of us would not retrofit or install a heat pump. The reasons are we don’t want to change our home and it’s too much hassle having the builders in – particularly if we had to move out. The ESRI calculates you would have to benefit by as much as €24,000 to compensate for the disruption of retrofitting. This explains why many low incomes households abandon retrofitting even if they are approved for full funding.
The final nail in the coffin of retrofitting would appear to be that the energy savings you are expecting from your new retrofitted home won’t materialise. One of the reasons is that you were probably under heating your home to save money but end up spending the same amount keeping your retrofitted house nice and toasty. Another reason is that your new BER rating is an estimate and there is no guarantee that your new home will be as warm as you have been led to believe.
It is obvious that most of us have intuitively arrived at the conclusion that retrofitting doesn’t make sense for us.
But if you needed anther reasons to bin retrofitting, the ESRI has one. The scheme is diverting some 15,000 construction workers away from house building. By coincidence that is close to the shortfall in building workers.
So how did we end up in this mess? The short answer is our failure to mobilise our abundant renewable energy resources, most obviously wind. It is no coincidence the EU member states that are on track to meet their binding climate action targets are the ones that focused on renewable energy.
Our plan anticipates that renewables – mainly wind – will contribute only 10 per cent of the target reductions, but even this is in doubt given that the projects in question are all snarled up in the planning process.
The more detailed explanation would seem to be that we were legally obliged to come up with a plan in 2024 for the EU. Rather than bite the bullet on tackling the impediment to developing renewable energy assets we cobbled together some magical thinking about retrofitting and electric vehicles. Amazingly, the EU bought it.
The real issue now is whether we should continue with this failed plan or just scrap it and focus on clearing the roadblocks to developing renewable energy. The good news in this regard is that both Germany and France are also going to miss their targets so a fudge on the fines is assumed and doubtless built into the Government’s financial assumptions.
But for the moment we continue to chuck good money after bad.
