Paul Murphy Calls for State-Run Retrofit Scheme, Questions Slow Rollout

Thanks a lot and thanks for the presentation. I might go back and forth if that's okay. Just to start with a kind of big picture question. Would it not make more sense to go about this an entirely different way? That instead of providing grants which introduce certainly an element of regressiveness to it, so those who can afford to match funding and so on get the benefit, and instead of relying on private companies getting involved, we know only two so far in the one-stop shop. Would it not be better to go about this an entirely different way and to say that this is a priority, a crucial priority, we have to retrofit all of these homes, all of the over a million homes which are identified as being poorly insulated and we're going to establish a state-run company to do it, we're going to create tens of thousands of green jobs and we're going to do it at upfront zero cost to homeowners because the state will be able to borrow at a lower rate than any homeowner will be able to borrow and then we share out the costs over a period of 15-20 years shared out between the state and the homeowner. Would that not be a simpler, more direct way of doing it and more in line with the scale of the crisis that we have primarily in terms of climate but also in terms of the cost of living issues that people are experiencing? I'm sorry to be slightly uninformed of you but really I don't think we're in a position to really comment on that, I think it's a very fine view but really it's government policy, we've been working with our parent department, I know there was a retrofit working group at the Secretary General level, they've made proposals and they were accepted by government and this is the route we're on at the moment so I think you'd appreciate from our position, we're not really in position to comment directly on your suggestion. I think as well Deputy Murphy, thank you very much for that question and from our perspective as Ciarán mentioned the National Retrofit Task Force commissioned a body of work and that body of work looked at different models that have happened elsewhere in the world and came to the conclusion that and indeed engaged internally in Ireland Inc with the construction industry federation and a whole host of stakeholders and this model was adopted, this is the model that was adopted there. I would caution one thing and it is in relation to Deputy Whitmore, we haven't any time to lose here, so stopping and thinking about what we can do, it's crucially important that this retrofit plan drives forward and we believe we've ensured in so far as possible that this is absolutely effective and efficient and a value for money perspective in terms of exchequer funding and carbon tax funding and that. But it's taken us probably four years to get ourselves into the space we are now registering one-stop shops, very comprehensive scheme, the private sector on board, the funding available in the NDP. Things don't move fast, those wheels don't move fast, but we're in a good space now to spring forward and to deliver the homes that we need to deliver the carbon savings that we're committed to under our climate bill and our sectoral emissions as well. I think what's powerful about this 3.5 million tonnes is it's down to a citizen level, it's individuals, it's what people understand, it's asking the citizens of Ireland to do something. I think from that perspective it's very much asking people to do their piece and control what's controllable within their environment. Thank you. I see where you're coming from and I think that's precisely the problem is that it's asking individuals to do it as opposed to saying this as a society we need to do it and if I as an individual can't afford 25,000 euros but aren't on any social welfare payments so don't qualify for the warm home scheme that I'm able to benefit I'm able to participate in this transformative change that we need to happen rapidly. Just to follow up though, the point Mr Walsh raised about there's no time to lose, I couldn't agree more, but in that case why is the 8 billion allocated so dramatically backloaded? I mean when you look at it I can understand a certain lead in time, I presume that's the explanation to get it up and running and so on, but it takes a long time to hit the high rates. I mean of the 8 billion over 5 billion is due to be spent in the last three years and it ramps up very slowly 2023 less than 300 million, 2024 less than 400 million, 2025 less than 500 million. Why is it so slow to reach the levels of the 2 billion a year which is hit by 2030? Mr Walsh, thanks, that's a very good question. It kind of leans back into the point William made earlier in terms of the precursor to this was the report done by the National Retrofit Task Force. We had significant work looking not just domestically and consulting domestically with a whole range of sectors, but internationally at a whole range of different examples of what might or might not work. It is on that basis that you are building targets and measures that we think are achievable in terms of looking at the capacity of the supply chain, looking at the labour market availability, looking at time inflation and how that moves in, and the ability to generate demand. So, you know, that was kind of the basis on which the targets are built up slowly and experience has shown that where you kind of build them up maybe slower, maybe too slow potentially possibly, but in a way that they are sustainable and deliverable and give people time to actually build up and you end up in a much more sustainable market. The other issue as well is retrofit is, it's important that we're going into people's homes and it's kind of, as I mentioned earlier in the presentation, you can't retrofit or retrofit. So, it's important that we build that quality piece and get the kind of systems and processes right because one of the real things we don't want to do is go gangbusters at it and find out you're doing the wrong thing or you're not doing it in the right way or you end up with issues. So, that's why there's some degree of caution to building up and getting it right for the first time because we're building the building blocks up to 2030 and in reality we're building the blocks from beyond that as well, really aiming at 2050. Thanks a lot for just one final question just in relation to there's very little here for private renters and in fact for some private renters this is going to mean they're going to get evicted and because the landlords will say, okay I can take advantage of this I get a scheme great get to upgrade the home and then I get to say that that's a renovation and on that basis I can do what's known as a rent eviction for people and then presumably even if the people get to stay hike up the rents. Because they don't get the benefit of the reduced eating costs so they'll presumably take it back in rent if they're going to even engage in it at all. Is there anything planned to give more here to benefit private rented accommodation? I mean again it seems to me a more simple way of going about it is to say okay by x date 2030 or whatever that's part of the standards to have private rented accommodation is that you have to meet the standards of of a B or of B1 or higher or something like that but is there anything more planned in terms of private renters? Thanks a lot. I might answer the first part and then lean into my colleague Brian O'Mahony. Just in terms of the private rental market the scheme is open to non-commercial landlords in terms of rent to upgrade their properties. We haven't direct evidence of people being evicted on foot of doing a retrofit and as we confirmed later on in the hearing it is possible to do the significant level of retrofit without having somebody to move out. That doesn't mean it's not going to happen but we do have other agencies and the residential tenancies board have kind of statutory powers in that regard. Just on the rental sector I understand from the housing for all plan it is planned to introduce a minimum BER standard by 2025 and that of course will generate activity in this area. I might ask maybe Brian if he wants to comment further on the rental sector and possibly the split incentive issue. Yeah the deputy is correct like the rental sector is a very difficult centre. A sector in which to address because everybody talks about the split incentive. The landlord owns the property and gets the benefit of the capital acquisition or the capital improvement but the homeowner bears the operational cost right. So just on the decanting we typically don't see that happening at large volume in our schemes to date and I would recognise okay we want to scale the numbers through this decade and that's because we need to build the supply chain with us as my colleague just mentioned right. But the state is looking at minimum energy performance requirements for rental properties and also for all properties and this is a proposal that's contained in the Fit for 55 package that has been reviewed at the moment. So that direction of travel is actually already I suppose being discussed at policy level both nationally and within Europe okay. The one thing I would say as I go back to as well as like and this would apply to all I suppose homeowners or people you know we are trying to support retrofit the homes okay. But every one of these homes has a person in it whether that is they own the property or they're renting the property and we're very much aware of that. And over the last decade we've got lots of experience but the schemes that we have at the moment that we're deploying in 2022 and going forward we spent a lot of work actually where we do voice the customer surveys. We asked people before what they understand from SEAI, what their experience was going through with SEAI. We tried to profile the type of people that do upgrades like traditionally people would have said solar PV would be younger people possibly in newer homes. And what we found actually no it's older people who are more concerned about their energy bills who've been installing solar PV and then people are using it in you know homes that are actually already improved. They've come through one of our schemes so we learn a lot like that but last year like we carried out a number of focus groups surveys being into people's houses individually when retrofit works were happening. And like homeowners agreed that they need to do something but they believe government needs the help. And when we were developing the new schemes both for the better energy homes, the kind of shallower measures, the one stop shop and looking at the warmer home scheme. Homeowners are saying to us is that it's too expensive, we need more support here. And that's where we came up with the recommended supports that are now in place that are about half of the cost for deep retrofit, 80% for more shallower ones. And they're targeted right so we're trying to address the upfront cost right through those grants. They also say things like, I'd like if there was a low cost financing packaging available, I would consider doing it now, I would be interested. So we all know these things but homeowners are coming back and telling this to us, right? They also say things to us like, I'd be interested in the heat pump. So last year the heat pump grant was €3,500 and we've nearly doubled it this year to €6,500. And what they said was, I'd be interested in the heat pump but it's too expensive. I'd be interested in the heat pump if it was equivalent to a boiler, like an oil or a gas boiler. And so that's what we did this year is we said, OK, we rearranged how the grant offering is presented to them. So they're left with a decision, if I want to put in, if I upgrade my house, I want to put insulation in, I'm then left with a situation where the heat pump actually, if you leave it behind, it's kind of like, you don't want to leave it behind because it costs the same price as putting in a replacement oil or gas boiler. So we're trying to drive people in this direction or support them. They're coming back saying this to us. They also say to us is, we like the approach where a one-stop shop brings me from start to finish. And I'd like that approach if I have to do it in a stepped approach rather than doing it all in one go. I need to do my walls this year. I need my heating system next year. And they see the benefits of the one-stop shop. So I think what I'm trying to say is, I suppose we've listened to what people are doing, both in our schemes and outside our schemes. And we've also tried to structure the schemes to build for the future. But I will go back to another point that my colleague Margie mentioned is, the heat study is another piece of work that was carried out. And it tells us that there are other ways in which we can help people reduce the carbon footprint to their home and also help the state as well, right? And that's why we don't foresee that the supports that we have today, that they are fixed for the next decade. We foresee that we're going to be introducing new technologies, ramping down other technologies. and finding solutions that meet homeowner's needs. So we're going to react into what the homeowner wants. And that's why the heat study is really important, because it raises these questions that challenges, I suppose, certain assumptions about heat pumps or solar PV or energy efficiency. And that's what we're going to try and do in the next year or so, is be focusing, testing, trying to learn on some of those things like the heat loss indicator. Thank you, Mr. O'Malley. Thank you, Deputy Murphy. Mr. Walsh wants to come in. Just one final piece for the Deputy. Both at PAC a number of weeks ago and today, I've heard from deputies in relation to this concern, in relation to evictions as possible. Renoviction is a new phrase to me. But from an SEI perspective, we have obviously a social justice element to us, but also we need to protect our retrofit brands. So we will keep this on our radar. And we certainly can engage with the RTB to see what's happening there and to make sure that anything that we can introduce to avoid this, that we do, but also that we kind of incentivise the landlord market in an appropriate fashion. So thank you, Deputy. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.