Energy retrofitting: damned if you do, damned if you don't Brenda McNally
Home heating bills have long been a worry for the elderly and those on low incomes. But the recent gas price hikes, which will inevitably be followed by ESB price increases, are going to force all of us to reconsider our 'on again, off again' commitment to energy efficiency.
In fact, given the depressing fall in house prices, your home's energy efficiency is set to become the most talked-about aspect of property for some time. Even when the market does get going again, the new Building Energy Regulations (BER) will force buyers and sellers to rethink how they value property. From 2009 on the old property mantra 'location, location, location' will have to make way for 'A1, A2, A3', as cost-conscious buyers will focus on properties with the highest energy rating. Despite our dire economic position, the government has gone some way to meeting its commitments to energy efficiency. Funding for the Home Energy Saving Scheme (HES) was quadrupled from €5 million to €20 million in the 2009 budget. The scheme offers householders grants of up to 30% towards the cost of retrofitting homes to improve energy efficiency. In addition, the Warmer Homes Scheme, which provides insulation for households in receipt of social welfare, will receive €5 million. But are these measures enough to help the huge numbers who are living in poorly insulated and energy inefficient homes?As was to be expected, opposition parties didn't think so. They pointed out that despite the increase in HES funding, the schemes clearly favour the better off. "They have pumped the majority of the money into schemes that are subsidising retrofitting where the householder pays 70%. That will clearly favour richer people," said Fine Gael's Simon Coveney.
Meanwhile, commentators such as Jeff Colley, Construct magazine, question whether grants can ever really achieve their objectives. The problem with offering grants, according to Colley, is that they almost always lead to price inflation which negates the initial benefits.
More importantly however, are critics' claims that much of the housing built during the boom doesn't even meet the energy standards required at the time. As a result, they believe that many more homeowners than estimated will need to think about retrofitting in the future.
According to the Renewable Energy Skills Skillnet (RESS) for example, two thirds of Irish homes are poorly insulated and €50 billion is required to make Irish homes energy efficient by 2018. RESS also warns that Ireland will struggle to achieve building efficiency ratings of 60% within 10 years, as envisaged by the EU.
Despite the introduction of environmentally sound construction methods and materials in the building of new homes, Dick Whelan, RESS Project Leader, believes that approximately one million, or two thirds of Irish homes built before 1997 are poorly insulated and energy inefficient and nowhere near meeting national energy efficiency targets. Self-regulation in the construction industry, as with many other areas of the property sector, is now being seen as a major cause of the problem.
For homeowners and investors, poor energy efficiency means they will have to consider retrofitting which is always a more expensive approach than building energy efficient homes in the first place. It will also have an impact when homeowners try to sell their property as houses and apartments with higher energy rating will command a premium when the new BER regulations for all homes for sale or rent kick in 2009.
Fortunately, there are plenty of information resources such as Sustainable Energy Ireland (SEI) and the Power of One project to help homeowners address the problem. SEI estimates that retrofitting to current standards would cost the average home around €25,000 while the Construction Industry Federation believes the figure would be around €10,000. Up to now homeowners have questioned the value of the payback on this level of investment. If your annual bill is €1,500 per year, they say, then that's a 15- 20 year wait for a return.
BER ratings will change that mindset. Ted Laferty of Onlinetradesmen.ie expects upgrading homes for BER to become a strong performer in the future. "In a slower market a good BER will make the difference between selling and not selling. Very few tradesmen currently have the experience with energy efficiency projects like cavity filling and insulation. But as demand for these services grows, they are likely to command higher charges."
The picture for homeowners is bleak. Whatever way you look at energy efficiency, it's going to cost you. The most energy-efficient homes are going to command premium prices; retrofitting is going to be costly; the grants are likely to be swallowed up in price inflation and energy bills will keep on rising.
The only choice is to take the pain now and invest in energy efficient upgrades, or face the pain later by paying more in ever increasing energy charges.