New Loan Scheme Makes It Even Easier to Go Green

In late April, Minister for the Environment, Eamon Ryan, and his colleagues from the Finance Ministry, Michael McGrath and Neale Richmond, launched a €500 million Home Energy Upgrade Loan Scheme backed by the European Investment Bank.

Under the new scheme , homeowners will be able to borrow from €5,000 to €75,000 on an unsecured basis for a term of up to 10 years. The interest rates will be significantly lower than those currently available in the Irish market. The loan scheme is the first of its kind for Ireland or the European Investment Bank.

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…"

The launch fulfils a promise made back in October 2023. The loans are specifically targeted at homeowners financing home energy improvements that are being grant-aided by the Sustainable Energy Authority of Ireland (SEAI). That means that to avail of the loan you also have to have qualified for a grant. Combined with the grant aid, the loans will eliminate the financial burden of “doing the right thing”.

Conditions of the Home Energy Upgrade Loan Scheme

The loans back energy upgrades – like switching to solar – making it possible for homeowners to afford to make their homes “warmer, healthier and cheaper to run” while reducing their carbon footprint.

The loans can be used to undertake a deep retrofit, involving several upgrades at the same time –? insulation, double-glazed windows, and solar together, for instance – or to carry out a single upgrade that will significantly improve the energy performance of the home. To qualify for a loan, a project must be projected to achieve a minimum 20% improvement in a home’s energy performance (BER).

Banks and credit unions have raced to enrol in the scheme. PTSB was the first financial institution to roll out loans using the fund. With interest rates starting at 3.55%, PTSB’s loans will save consumers a substantial amount of money at a time when interest on other personal loans can be up to 14%. ?

It is expected that when other lenders enter the market, rates will become even more competitive. 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 expected to start offering similar loans in the coming weeks.

Full terms and conditions and a list of participating finance providers are available on the SBCI website .

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

Other Options to the Home Energy Upgrade Loan Scheme

The new loans come at a crucial time for those looking for ways to finance the switch from fossil fuels to renewable energy. In January, the Department for the Environment began cutting the size of grants for some home energy upgrades. For 2024, the maximum grant available fell from €2,400 to €2,100 – a move which left some homeowners wondering about how they were going to make the switch.

These innovative low-interest rate loans can be the answer. Used in conjunction with the SEAI’s solar grant scheme , the cost of upgrading home energy to a climate-friendly state-of-the-art solar system will be within reach for many more families.

Those most at risk of energy poverty can continue to avail of fully-funded energy upgrades under the Warmer Homes Scheme . But these low-cost loans will make it easier for those above the eligibility threshold for the Warmer Home Scheme to make their homes warmer (and more valuable) with low-cost energy upgrades like solar.

There are still 1.3 million homes in Ireland that could benefit from solar. Looking ahead, now is the time to buy.