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Press release

Low-cost just got lower with two more banks offering loans under the Home Energy Upgrade Loan Scheme

With interest rates as low as 3%, homeowners can borrow from €5,000 to €75,000 to make their homes warmer and more energy efficient.

The Minister for the Environment, Climate and Communications, Eamon Ryan, and the Minister for Finance, Michael McGrath, today welcome the participation by AIB and Bank of Ireland in the government-backed, €500 million, Home Energy Upgrade Loan Scheme.

The scheme was launched in April 2024 and is delivered by the Strategic Banking Corporation of Ireland (SBCI) on behalf of the Department of the Environment, Climate and Communications, and supported by the Sustainable Energy Authority of Ireland (SEAI) and the European Investment Bank (EIB) Group.

AIB and Bank of Ireland are the latest financial institutions to offer loans under the scheme, with rates starting from as low as 3% (pricing varies depending on the finance provider). The participation of these two pillar banks, along with PTSB, who currently offer loans under the scheme, significantly increases competition in the market, providing homeowners with more choice and giving them the opportunity to avail of rates that are significantly lower than what is currently available on the market.

In addition to the three pillar banks, it is expected that a number of credit unions from the Irish League of Credit Unions will join the scheme in the coming weeks, which will allow more people to access these affordable loans in their own communities. Additional finance providers are expected to commence offering loans later this year.

The scheme works hand in hand with SEAI grant programmes, and loans can be used for a broad range of home energy upgrades. Homeowners can apply for the loans directly through the participating finance providers.

Minister Ryan said:

"I am delighted that AIB and Bank of Ireland are now participating in the scheme. This means that all three pillar banks are now offering low-cost loans to homeowners who want to upgrade the energy efficiency of their homes. The increased competition in the market means that homeowners will now have more choice and greater value. Low-cost just got lower, which is good news for householders.

"I very much welcome the extremely competitive rates starting from 3%, which are the best green loan rates available on the market. I hope that more homeowners are encouraged to take advantage of this opportunity to upgrade their home to one that is warmer and healthier, with lower energy bills and emissions, supporting Ireland in our transition to a greener future."

Minister Michael McGrath said:

"I am pleased to welcome AIB and Bank of Ireland as lenders under the €500 million Home Energy Upgrade Loan Scheme. This scheme, operated by the SBCI and backed by the European Investment Bank and European Investment Fund (EIB/EIF), unlocks significant funding at very attractive rates – on top of SEAI grants – to enable homeowners and small landlords to improve the energy efficiency of their homes.

"With AIB and Bank of Ireland joining PTSB under this scheme, and more lenders, including credit unions to join soon, its benefits will spread even wider, helping households to reduce energy bills and also lower our CO2 emissions, contributing significantly to meeting Ireland’s climate targets.

"I encourage anyone with an interest in availing of the scheme to contact participating finance providers. I believe this initiative will have a very significant, positive effect in the years ahead."

June Butler, CEO of SBCI, said:

"I welcome both AIB and Bank of Ireland's participation in the government-backed Home Energy Upgrade Loan Scheme, which is designed to make home energy upgrades more accessible and affordable for homeowners. Their participation broadens the financial options available to homeowners looking to invest in energy-saving improvements. This unsecured, 10-year, low-cost loan is available at a significant discount to current personal loan rates. By reducing the financial barriers to home energy upgrades, the Home Energy Upgrade Loan Scheme will enable more homeowners to improve the comfort of their homes while also supporting long-term energy savings and enhancing the country’s efforts towards a more sustainable and energy-efficient future."

William Walsh, CEO of SEAI, said:

"SEAI welcomes today’s announcement that further providers will now be offering competitive loans under the SBCI’s Home Energy Upgrade Loan Scheme. The availability of low-interest finance will make it more accessible and affordable for homeowners to increase the comfort of their homes and reduce their energy bills. We know that the upfront costs of investing in home energy upgrades can be a deterrent for those wishing to improve the energy efficiency of their homes. This low-interest loan scheme from SBCI will work in parallel with SEAI’s home energy grant programmes, making it easier for homeowners to begin their retrofit journey and move away from fossil fuels."

Geraldine Casey, AIB Managing Director of Retail Banking, said:

"AIB is delighted to offer the Home Energy Upgrade Loan Scheme to our customers in partnership with the SBCI. These low-cost loans will allow customers the opportunity to upgrade their homes, save money on energy bills and help the environment. Our purpose is to empower people to build a sustainable future. And by upgrading their homes, be it through insulation or heat pumps, our customers can do just that."

Henry Dummer, Bank of Ireland Director of Everyday Banking, said:

"Bank of Ireland is delighted to be open for applications for the Home Energy Upgrade Loan Scheme in partnership with the SBCI. With almost three quarters of the housing stock in Ireland BER rated C and lower, and with our research showing that six in ten homeowners plan to retrofit their home at some stage in the future, this low-cost loan scheme is another fantastic opportunity for customers to invest in the upgrade of their homes. The scheme will complement our innovative 'EcoSaver Mortgage' that offers customers interest rate reductions as their home becomes more energy efficient."

Further detail on the Home Energy Upgrade Loan Scheme, including the full eligibility criteria, are available on the SBCI and SEAI websites.

ENDS

Notes to the Editor

Key features of the Home Energy Upgrade Loan Scheme

  • Homeowners (including small, non-corporate landlords) may borrow between €5,000 and €75,000 for up to 10 years
  • Loans are unsecured – that is, there is no charge taken over the property as is the case with a mortgage
  • The purpose of the loan must be to carry out home energy upgrade works
  • The residential property being upgraded must be located in the Republic of Ireland
  • the home energy upgrade works must qualify for a home energy grant from the Sustainable Energy Authority of Ireland (SEAI) and must be projected to result in a minimum 20% improvement in the energy performance (Building Energy Rating – "BER") of the property
  • The works must be carried out by an SEAI registered One Stop Shop, Energy Partner or Communities Project Coordinator. These SEAI-registered contractors offer homeowners all the services required for a complete home energy upgrade and can advise whether the planned works meet the requirements for the loan scheme, as well as advising on the grants that may be available from SEAI
  • Up to 25% of the amount borrowed may be spent on non-energy efficiency works, for example, other home improvement works carried out at the same time as energy upgrade works (excluding any form of installation of fossil fuel boilers)
  • Loans will be available for drawdown up to 31 December 2026 or until the scheme has been fully subscribed (whichever is earlier)
  • Loans will be subject to the normal lending criteria, terms, and conditions of the participating finance providers
  • When approved, the loans can be drawn down before works begin. This gives certainty to homeowners that they have the funds for the planned energy upgrades as well as any up-front costs or milestone payments. This is often identified by homeowners as a key barrier to upgrading their homes
  • At the moment, most green home improvement loan interest rates hover between 6% and 7%, with other personal loan rates ranging up to 14%. As an additional bonus, households could also qualify for a lower-cost green mortgage in the future after they use their low-cost loan to improve their BER rating up to the required level
  • The loans can be used by homeowners who want to undertake a deep retrofit involving several energy upgrades at the same time or to carry out one or two upgrades that will significantly improve the energy performance of the home
  • Those most at risk of energy poverty can continue to avail of fully funded energy upgrades under the Warmer Homes Scheme. The availability of low-cost loans will make it easier for those above the eligibility threshold to upgrade their homes

National Retrofit Plan

The National Retrofit Plan sets out how the government will deliver on our retrofit targets. The plan is designed to address barriers to retrofitting across four key pillars: driving demand and activity; financing and funding; supply chain, skills and standards; and governance. For each pillar, barriers were identified and time-bound policies, measures and actions were put in place to address them.

The Home Energy Upgrade Loan Scheme is the latest commitment under the plan to be delivered. Implementation of the National Retrofit Plan has resulted in a very significant increase in the delivery of home energy upgrades, with almost 48,000 upgrades supported by the government last year.

Key statistics for 2023:

  • The government supported almost 48,000 home energy upgrades – up 76% year-on-year
  • The target of 37,000 home energy upgrades for 2023 was exceeded by 30%
  • Combined with over 2,400 local authority home retrofits that took place in 2023, this means that over 50,000 energy upgrades in total were supported by government in 2023
  • Almost 5,900 low-income households were provided with free energy upgrades under the Warmer Homes Scheme in 2023 – up 33% on 2022 levels
  • Expenditure across SEAI residential and community energy upgrade schemes was almost €320 million in 2023. This marked an increase of 70% on 2022 levels
  • Almost 67,500 applications were received across all schemes – up 35% on 2022 levels
  • There are now 20 One Stop Shops registered

About the Strategic Banking Corporation of Ireland (SBCI)

The Strategic Banking Corporation of Ireland (SBCI) was set up by the Department of Finance in September 2014 to ensure that SMEs in Ireland have access to stable, lower-cost, long-term funding options. By supporting and helping to develop an effective credit market for SME finance, the SBCI ensures that it is easier for SMEs to get the finance they need to prosper and build economic activity in Ireland.

About the Sustainable Energy Authority of Ireland (SEAI)

SEAI is Ireland's national energy authority investing in, and delivering, appropriate, effective and sustainable solutions to help Ireland’s transition to a clean energy future. SEAI works with government, homeowners, businesses and communities to achieve this, through expertise, funding, educational programmes, policy advice, research and the development of new technologies. SEAI is funded by the Government of Ireland through the Department of the Environment, Climate and Communications.

About the European Investment Bank (EIB) and European Investment Fund (EIF)

The EIB is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. The EIF is part of the EIB Group.

Heat and Built Environment Taskforce

The Heat and Built Environment Taskforce ensures a coordinated approach to the speedy delivery of climate actions designed to improve Ireland's buildings and how they are heated. To deliver a sustainable future, we need energy-efficient buildings that are heated by renewable sources.

The Taskforce oversees the development and delivery of policies from across government departments and agencies to ensure they are aligned, and that risks to fast delivery are managed. The Taskforce operates across the residential, commercial, industrial, and public sectors, with a focus on retrofitting, the roll-out of heat pumps, biomethane, and delivering a district heating industry.

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