Your finance options for retrofitting

The Government wants everyone to use less energy to help meet our climate targets, but reducing your energy consumption is easier said than done, especially considering most of the country is still working from home.

That’s why retrofitting has become such a hot topic. Improving your home’s energy efficiency not only helps you to reduce your carbon footprint, it also means you can save big on your energy bills, especially if you live in an older, poorly insulated home.

Figures from the Central Statistics Office show that the Building Energy Rating (BER) of domestic homes constructed during the 70s, all the way up to the early 00s, have a C1 energy rating or lower. This is far below the A rating all new homes today must have.

And while it’s not always as expensive as you might think, some retrofit measures can cost a fair few bob. However the good news is that there are a number of financing options available should you be considering making one improvement or maybe more.

1. Get a grant from the SEAI

The Sustainable Energy Authority of Ireland (SEAI) offers homeowners considering a retrofit a range of grants. They are as follows:

• Insulation grant
• Solar water heating (Solar Thermal) grant 
• Solar electricity grant (Solar PV) grant
• Heating controls grant
• Heat pump grant

Insulation

Some of the most straightforward grants on offer from the SEAI are those paid toward the cost of internal and/or external insulation.

With grants from €800 to €1,500 available for attic insulation, all the way up to €4,500 for internal wall insulation and €8,000 for external wall insulation, there are plenty of options to choose from. Naturally, the amount you can apply for will depend on the work being done and the type of property you live in.

The energy authority has said in the past that properly insulated walls can save a home up to €600 per year on heating bills, which is no small amount.

Solar panels

Another grant available from the SEAI is for the installation of solar electricity panels, or solar PV cells, commonly seen on the roofs of houses passed by on your Sunday drive no doubt.

Solar thermal

Solar thermal systems transform energy from the sun into hot water for your home. According to the SEAI, they are designed to meet 50 - 60% of your annual hot water needs.

The SEAI offers grants of up to €1,200 for the installation of solar water heating systems.

Solar PV modules

Unlike solar thermal panels, which are designed to heat water only, solar PV modules generate electricity for use around the home.

Grants available start from €900 per kWp up to a maximum of 2kWp, so €1,800 for 2kWp solar panels. This equates to around six to seven panels - enough for the average-sized home.

You'll also receive €300 for every additional kWp up to 4kWp if you get a battery. With a battery storage unit, any excess electricity generated during the day by your solar panels can be stored for use later. 

By far the greatest positive of having solar panels is the reduction in the amount of electricity you'll need to purchase from your supplier, which has a direct impact on the cost of your bills each year.

The SEAI estimates savings on your domestic electricity bill to be approximately €200-€300 per year with a solar PV system installed. 

Take a look at our guide on why you should consider installing solar panels for more information on the benefits.

While retrofitting is clearly a long-term investment with a cash investment required at the start, by insulating your walls and having solar panels installed you could save close to €1,000 on the cost of your energy in year one - not to be sniffed at!

You can find out more about each grant with our in-depth piece on the full range of grants available.

2. Take out a green loan with AIB, BOI, or An Post

The next option available to consumers considering a retrofit, big or small, is to take out what’s now commonly known as a green loan, which often come with attractive interest rates.

Customers who go for a green home loan must use it for a specific purpose though, such as for wall, attic or floor insulation, boiler upgrades or the installation of home charger units for Electric Vehicles. Each lender may have different requirements so make sure to check eligibility criteria before applying.

At the moment, AIB, Bank of Ireland, and An Post all have competitive green loan offerings for customers who are looking to retrofit.

To begin with, let’s take a look at AIB’s green loan.

AIB - Green personal loan

With AIB’s green personal loan, customers can avail of a green rate of 6.40% APR, the lowest personal loan rate currently available from the bank. For context, its current standard rate for personal loans is 8.95% so this is significantly lower.

With this loan it’s possible to borrow between €3,000 and €60,000 for up to ten years and you’ll need to spend at least 50% of the loan on a green initiative (this can include the purchase of an electric car).

AIB doesn’t charge penalties should you decide to make extra repayments or if you’d like to repay your loan early, which can be a real help.

And you don't need to be an existing customer of AIB to apply for this loan.

An Post - Green home improvement loan

Customers can also retrofit their homes with a green loan from An Post. It's possible to borrow from €5,000 to €75,000 and for a term of up to ten years. 

Rates from An Post start from as low as 4.9% APR. However, customers must be availing of an energy efficiency grant from the SEAI in order to apply.

The loan applicant's homes must have been built prior to 2006. They must also submit an SEAI 'Declaration of Works' document with the loan application.

With An Post the interest rate you pay is determined by your loan amount and credit profile. Take a look at the table below for further details.

Bank of Ireland - Green home improvement loan

With Bank of Ireland’s green home improvement loan customers can obtain a variable rate of 6.50% APR. Loan amounts start from €2,000 and go all the way up to €65,000.

Some of the advantages of choosing BOI’s green loan include flexible repayment options, the ability to defer the first three months’ repayments, as well as not needing to hold any savings against your loan.

Similar to the other green loans available above, the work being undertaken must include a retrofitting activity such as installation of solar panels, insulation of any kind, and so on.

You can find out more about this loan here.

3. Equity release  

A big issue many older homeowners face is that they're asset-rich but cash poor. In other words, they may be living in a home worth well over half a million, but don't have the €60,000 or €70,000 needed to carry out a retrofit.  

That's where a lifetime loan, also known as an equity release loan might work.

Spry Finance specialises in equity release products. And its green lifetime loan offers a slightly discounted rate of 6.25% (as well as a set-up fee). 

Borrowers will need to have an energy efficiency rating of B3 or higher, or be undertaking improvements that will bring their home to B3 within 12 months. There is a minimum loan amount of €20,000 and a maximum loan limit of €500,000 irrespective of your age or the value of your home.

And you must be over 60 to apply. 

The loan is either paid off when you sell the property or die.

You can apply for a lifetime loan with bonkers.ie. However, it's important to remember that an equity release isn't for everyone and can work out expensive in the end.

So before you start your application journey make sure to read our lifetime loan guide series and reach out to our team for advice. 

4. Chat to your local Credit Union 

The Credit Union, Energia and Irish-owned retrofit company House2Home have all recently teamed up to launch the CU Greener Homes Scheme, a one-stop shop for those looking to finance a retrofit.

Grants of up to 40% are available as part of the scheme and are discounted upfront by House2Home.

The SEAI provides a grant of 35% for homeowners who complete a deep retrofit project. The remaining 5% is provided as additional support by Energia while participating Credit Unions are offering discounted loan rates from as low as 4.9% APR depending on the size of the work you're getting done. 

There are also a number of grants available for shallow retrofits. So whether you are considering just a new boiler or a deep retrofit, the CU Greener Homes Scheme can help. 

Head over to the CU Greener Homes Scheme website to learn more.

5. Consider using your savings

Last but not least, and it may come as obvious, but another financing option when it comes to a retrofit is using your own savings that you’ve built up.

Irish household deposits are close to record highs. A vast amount of that is potentially being considered for home improvements. 

While we’re in no way suggesting that you use your rainy day fund to finance a deep retrofit of your home, if you have built up excess savings over the past few years, a retrofit is a good use for them.

And remember, with deposit rates still close to all-time lows, the savings you make through the retrofit are likely to be higher than any money you'll earn on your savings.

Weigh up your options

Each person’s circumstances are different so it's important to weigh up your options before making a decision. Some important questions to consider are:

1. When do I want to see a return on my spend? Many retrofit options are quite expensive meaning it could take years to see a return on your spend.
2. What can I realistically afford?
3. Would I be better to pay off outstanding debt rather than take on another loan to try make savings on my energy bills?

Remember, depending on the finance options available to you, you can always consider a partial, 'shallow' retrofit over a more extensive one and save for the other works in the meantime, as any measure, no matter how small, will help to reduce your energy bills and lower your carbon footprint.

Find a cheaper energy provider

In the meantime, if you’re looking for a quicker way to save money on your bills, why not consider switching energy provider? You can find the cheapest deals on the market and start saving today with our energy comparison tool. 

With inflation currently on the rise, you might want to save money on other bills too. Make sure you check out our broadband, banking, and insurance comparison tools as well.

As well, here are a few articles that can help you reduce your monthly expenses.

• Easily save money by changing your everyday habits around the home with our list of 15 ways to use less electricity and save money. 
• Working from home can significantly impact your monthly bills. Here are 12 ways for you to cut back on costs while working from home.
• If you’re interested in making changes to become more environmentally friendly, make sure you check out this article on 12 ways to reduce your carbon footprint and save money.

Get in touch!

If you have any questions for us regarding your financing options for retrofitting and energy efficiency in general why not get in touch in the comments below?

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