New low-cost Home Energy Upgrade Loan Scheme launched

  • – Government-backed €500 million scheme will support homeowners to invest in energy efficiency
  • – From today, homeowners can borrow from €5,000 to €75,000 at significantly lower interest rates to make their homes warmer and cheaper to run

Minister for the Environment, Climate and Communications, Eamon Ryan, Minister for Finance, Michael McGrath, and Minister of State at the Department of Finance with special responsibility for financial services, credit unions and insurance, Neale Richmond, have today (Wednesday, 24 April) launched a new low-cost Home Energy Upgrade Loan Scheme. The €500 million Scheme is the first of its kind for both Ireland and the European Investment Bank (EIB) Group and will play a crucial role in helping homeowners to invest in energy efficiency, making their homes warmer, healthier and cheaper to run

This Government of Ireland Scheme is delivered by the Strategic Banking Corporation of Ireland (SBCI) on behalf of the Department of the Environment, Climate and Communications, and supported by the Sustainable Energy Authority of Ireland (SEAI) and the EIB Group.

PTSB is the first financial institution to offer loans to homeowners under the Scheme, with rates from 3.55%. AIB, Bank of Ireland, Avant Money and seven credit unions from the Irish League of Credit Unions (Clonmel, Connect, First South, Listowel, Naomh Breandan, North Midlands and Progressive) are finalising the approval process and legal requirements to provide the Scheme and are expected to commence offering loans in the coming weeks.

With more lenders and increased competition in the market, it is expected that rates will be extremely competitive, offering consumers more choice and value. Rates will be significantly lower than those currently on the market because of the combination of an EIB Group loan guarantee and a government-funded interest rate subsidy. The loans will help lower the financial barriers encountered by homeowners, making home energy upgrades more accessible and affordable.

At the moment, most green home improvement loan interest rates hover between 6% and 7%, with other personal loan rates ranging up to 14%. As an additional bonus, households could also qualify for a lower cost green mortgage in the future after they use their low-cost loan to improve their BER (Building Energy Rating) rating up to the required level.

The loans can be used by homeowners who want to undertake a deep retrofit involving several energy upgrades at the same time or to carry out one or two upgrades that will significantly improve the energy performance of the home. In order to avail of the low-cost loans, the upgrade projects musts be supported by an SEAI grant and be projected to achieve a minimum 20% improvement in the energy performance (BER) of the building.

Homeowners will apply for the loans through the participating finance providers. There will be no requirement for the loan to be secured against the property being upgraded (as is the case with a mortgage). Once approved, the loans can be drawn before works begin. This gives certainty to homeowners that they have the funds for the planned energy upgrades as well as any up-front costs or milestone payments. This is often identified by homeowners as a key barrier to upgrading their homes.

Those most at risk of energy poverty can continue to avail of fully-funded energy upgrades under the Warmer Homes Scheme. The availability of low-cost loans will make it easier for those above the eligibility threshold to upgrade their homes.

Speaking at the launch, Minister Ryan said:

“This innovative Scheme shows how the government, financial institutions and the retrofit sector are working together to deliver climate action that works for people and planet.

“We have designed the loans with the needs of homeowners in mind. Access will be simple and speedy with an emphasis on reducing the workload for homeowners accessing both loans and grants. We also anticipate that with greater competition on the market, loan rates will also become more competitive, giving people more choice and value.

“Over 48,000 home energy upgrades were supported through SEAI schemes last year — up a massive 76% on 2022 and exceeding the target by 30%. The new low-cost loans will help us to go even further in our retrofit delivery this year and in the years ahead.”

Minister McGrath welcomed the scheme. He said:

“I very much welcome this new and innovative loan scheme delivered by the Strategic Banking Corporation of Ireland, drawing together a significant number of financial institutions. It is particularly welcome that the European Investment Bank and European Investment Fund (EIB/EIF), both of whom have a mandate to make long-term finance available in support of EU policy goals, are backing the scheme – a first of its kind for the EIB/EIF.

“I am delighted that homeowners and small landlords will be able to avail of loans at very attractive rates to improve the energy efficiency of their homes. This has a double benefit in that it will both help households to reduce energy bills and also lower our CO2 emissions contributing significantly to meeting Ireland’s climate targets. The ability to combine a low-cost loan with SEAI grants adds to the attractiveness of the offering.

“I welcome PTSB’s participation as the first on-lender in the market, with more to follow in the coming weeks. I encourage anyone with an interest in availing of the scheme to contact PTSB and other participating finance providers and I believe this initiative will have a very significant positive effect in the years ahead.”

Minister Richmond said:

“I am delighted to see PTSB launch the Home Energy Upgrade Loan Scheme to market today. This Scheme is a first of its kind and will make a real difference to homeowners across the country in supporting them to improve the energy efficiency of their property, which will in turn reduce their energy bills. I am particularly glad that credit unions will be joining the Scheme in the near future, which will allow more people to access these affordable loans in their own communities and I would encourage anyone who is interested in retrofitting their home to avail of this Scheme.”

Kevin McKeon, Head of the EIB Group representation in Ireland, said:

“The EIB Group is pleased to support this ground-breaking €500 million loan guarantee scheme in Ireland to empower homeowners to cut energy bills, improve energy efficiency, and drive climate action. The Home Energy Upgrade Loan Scheme provides financial support through banks and credit unions across the country and gives homeowners the tools they need to make a difference in the battle against climate change, putting power in the hands of individuals. This visionary initiative sets a precedent unblocking climate action in Ireland and paves the way for other European countries to follow Ireland’s lead in the fight against climate change.”

June Butler, CEO of SBCI, said:

“We welcome this launch of the Home Energy Upgrade Loan Scheme, which is designed to address a clear gap in the market for homeowners who want to upgrade the energy efficiency of their homes. This unsecured, 10-year low-cost loan is available at a significant discount to current personal loan rates. This loan will support homeowners who want to make meaningful energy upgrades in their homes by making the financing of this investment more affordable. It is designed to address market feedback that the absence of such a product is a barrier for some homeowners to carrying out deep energy retrofits in their homes.”

William Walsh, CEO of SEAI, said:

“SEAI is delighted to support the launch of SBCI’s Home Energy Upgrade Loan Scheme. The availability of low-interest finance will make it more accessible and affordable for homeowners to increase the comfort of their homes and reduce their energy bills. We know that the upfront costs of investing in home energy upgrades can be a deterrent for those wishing to improve the energy efficiency of their homes. This new loan scheme from SBCI will work in parallel with SEAI’s home energy grant programmes, making it easier for homeowners to begin their retrofit journey and move away from fossil fuels.”

Patrick Farrell, PTSB Retail Banking Director, said:

“PTSB is delighted to partner with SBCI to offer customers low-cost loans to upgrade the energy efficiency of their home. This partnership allows us to provide competitive funding to support customers and help increase the volume of home retrofitting across the country. Our recent consumer research shows that while 1 in 5 (20%) are prepared to retrofit their homes at their own expense, the intention more than trebles to 65% if assistance is made available, so we expect this to be a welcome support among consumers. In addition, this scheme plays an important role as part of PTSB’s sustainability strategy, and helps to meet the home retrofit targets under the government’s Climate Action Plan.”

Further details on the eligibility criteria and other operational aspects of the Scheme are available on both the SBCI and SEAI websites.

Key features of the Home Energy Upgrade Loan Scheme

  • Homeowners (including small, non-corporate landlords) may borrow between €5,000 and €75,000 for up to 10 years
  • Loans are unsecured, that is, there is no charge taken over the property as is the case with a mortgage.
  • The purpose of the loan must be to carry out home energy upgrade works
  • The residential property being upgraded must be located in the Republic of Ireland
  • The home energy upgrade works must qualify for a home energy grant from the Sustainable Energy Authority of Ireland (SEAI) and must be projected to result in a minimum 20% improvement in the energy performance (Building Energy Rating – “BER”) of the property
  • The works must be carried out by an SEAI registered One Stop Shop, Energy Partner or Communities Project Coordinator. These SEAI registered contractors offer homeowners all the services required for a complete home energy upgrade and can advise whether the planned works meet the requirements for the loan scheme, as well as advising on the grants that may be available from SEAI
  • Up to 25% of the amount borrowed may be spent on non-energy efficiency works, for example, other home improvement works carried out at the same time as energy upgrade works (excluding any form of installation of fossil fuel boilers)
  • Loans will be available for drawdown up to 31 December 2026 or until the scheme has been fully subscribed (whichever is earlier)
  • Loans will be subject to the normal lending criteria, terms, and conditions of the participating finance providers

Further detail on the Home Energy Upgrade Loan Scheme including the full eligibility criteria are available on the SBCI and SEAI websites.

About the Strategic Banking Corporation of Ireland (SBCI)

The Strategic Banking Corporation of Ireland (SBCI) was set up by the Department of Finance in September 2014 to ensure that SMEs in Ireland have access to stable, lower-cost, long-term funding options. By supporting and helping to develop an effective credit market for SME finance, the SBCI ensures that it is easier for SMEs to get the finance they need to prosper and build economic activity in Ireland.

About the Sustainable Energy Authority of Ireland (SEAI)

The Sustainable Energy Authority of Ireland (SEAI) is Ireland’s national energy authority investing in, and delivering, appropriate, effective and sustainable solutions to help Ireland’s transition to a clean energy future. SEAI works with government, homeowners, businesses and communities to achieve this, through expertise, funding, educational programmes, policy advice, research and the development of new technologies. SEAI is funded by the Government of Ireland through the Department of the Environment, Climate and Communications.

About the European Investment Bank (EIB) and European Investment Fund (EIF)

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. The European Investment Fund (EIF) is part of the EIB Group.

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