Why home renovations will be difficult for low-income households

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Opinion: are we doing enough to support low-income households in the transition to energy efficiency?

Through Olivier mccarthy & Ashley amato, UCC

Budget 2022 committed 202 million euros in carbon tax revenue to finance Irish Sustainable Energy Authority (SEAI) residential and community renovation programs. Of this amount, € 109 million will be used to provide free energy efficiency improvements to households that are experiencing or are at risk of suffering, energy poverty. The government has also pledged to introduce a new low-cost home renovation loan program. But are these measures sufficient to support low-income households in the transition to greater energy efficiency and, ultimately, reduce the cost of domestic energy?

In Ireland, fuel poverty arises due to insufficient household resources to cover the costs of living and low energy houses. The people most vulnerable to fuel poverty are the elderly, people with disabilities, young children and single parents, with low-income households being the most affected. According to TASC, carbon taxes, based on the consumption of carbon-emitting fuels such as coal, peat, oil and gas, has a direct impact on those living in fuel poverty and in inefficient housing. The Government program states that the Irish carbon tax will continue to increase each year by € 7.50 per tonne until 2030.

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According to Claire Byrne Live of RTÉ One, would you spend € 26,000 to renovate your home if it reduced your energy bills by 35%?

To ensure that these increases do not further exacerbate energy poverty, € 3 billion will be spent on social protection and energy poverty initiatives and € 5 billion will partly finance a socially progressive national renovation program focused on social and low income rentals. Although this approach is informed by a ESRI study 2020, the TASC argues that the data necessary to ensure that the design of the carbon tax does not further exacerbate energy poverty is lacking and calls for an update of Ireland’s National Energy Poverty Strategy 2016-2019.

Lack of access to finance is seen as a major obstacle for low-income households to invest in energy efficiency measures. This, in turn, prevents a reduction in energy bills which could increase disposable income. The availability of tailor-made grants and loans is seen as a way to help low-income households engage in energy upgrades.

In Ireland, energy efficiency grants and loans are offered to households to encourage homeowners to renovate. Upgrades include insulation, new windows and doors, heating controls and installation of solar panels. Free energy upgrades through SEAI are available to those receiving certain social benefits. About a third of the cost of an energy upgrade is subsidized for everyone else. Green energy home improvement loans are offered to homeowners by many Irish banks and credit unions. These loans are often used to supplement SEAI grants, as the money is required for the work in advance and the actual grant is received after the work is completed.

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From RTÉ Radio 1’s Morning Ireland, Cian McCormack examines whether 500,000 homes can be renovated by 2030

Our research examined the perspectives of 120 low-disposable income households who are active clients of North Dublin. Financial Advisory and Budgeting Service (MABS). Insufficient disposable income appears to be a major obstacle to engaging in renovation programs for these households. Just under two-thirds of those surveyed qualified for free upgrades, but just 8% had taken advantage of the supports, mostly in the form of delay vests, low-wattage bulbs and attic insulation. More than a third of those surveyed were not eligible for free upgrades and were already strapped for cash and had no opportunity to commit to upgrades. These households were either unable or unwilling to access credit to modernize their homes.

Less than a third of all low-income disposable households were aware of the availability of home improvement grants. Almost 90% said the cost of the works was a big or very important factor in households’ decision to embark on energy upgrades, while half of all households were little or very unlikely to invest in it. any type of renovation. Promisingly, almost all households had changed some aspect of their household energy consumption behavior, such as turning off heat, turning off lights, taking shorter showers and turning off unused appliances, showing a strong awareness of reduction strategies. energy consumption and a willingness to engage.

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Home improvement should be a key part of the government’s new climate action plan, according to RTÉ Six One News

Our results strongly suggest that financial incentives alone, or indeed free modernization, as budgeted for 2022, will not be enough. A wider range of tailored measures that complement what is proposed in the budget will be needed to reach and help low disposable income households make the transition to energy upgrades.

Although the provision of financial supports is fundamentally important, individual counseling will be essential to provide more information on how to save energy and the benefits that households can derive from it. The introduction of community energy advisers, as recommended by the UDC in its submission to the 2021 Climate Action Plan, will greatly contribute to reaching the households least likely to benefit from existing mechanisms.

According to Nevin Institute, a just transition requires social interventions to prevent the poorest households from bearing the burden of the transition to a low-carbon economy. A more holistic approach to providing support, taking into account individual circumstances and capacities, is now needed.

This research is funded by the Irish Research Council.

Dr Olive McCarthy is a lecturer and director of the Center for Cooperative Studies of the University of Cork School of Business To UCC, and co-director of MSc in Cooperatives, Agribusiness and Sustainable Development. Ashley amato is a research assistant at the Center for Cooperative Studies of the University of Cork School of Business To UCC.


The opinions expressed here are those of the author and do not represent or reflect the views of RTÉ




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