Clear Progress and More to Come as Ireland Accelerates Down Heat Pump Path

It’s no secret that Ireland is struggling to reduce its greenhouse gas emissions. As things stand, we are not on track to meet our 2030 climate targets, with the Climate Change Advisory Council warning that it will need “the most significant change since the foundation of the State” for us to get there.

There are reasons to be hopeful, however. One of these is the steady rise in households that have made the switch to renewable energy by installing a heat pump – now it’s time to turn that steady rise into an unstoppable surge.

The Government is certainly trying to make this happen and has made a concerted effort to eliminate fossil fuels from the way we heat our homes, banning oil boilers from new build homes (as of 2022) with gas boilers set to follow from 1 January next year. If you buy or build a new house, chances are it will feature a heat pump.

Funding for heat pumps

For existing properties that rely on traditional (oil/gas) heating systems, the Government’s carrot approach is starting to bear fruit. Financial supports for heat pump retrofitting are now at their highest level ever, and this year alone we have seen the introduction of some important new incentives.

Already, homes built from 2007 onwards qualify automatically for a SEAI grant of €6,500 for an individual heat pump while homeowners undertaking a deeper retrofit through an SEAI registered One Stop Shop can avail of up to €10,500 towards upgrading their heating system to a heat pump. Older homes are also eligible for SEAI funding to improve their BER (energy performance) and make them compatible with a heat pump.

2024 incentives for homeowners

SEAI and the Department of the Environment, Climate and Communications continue to roll out new measures designed to encourage homeowners to cut the cord with fossil fuels in favour of electric-powered heat pumps. Here are some of the measures announced during 2024:

• The Heat Loss Indicator (HLI) threshold was increased from 2 to 2.3, making more homes eligible for a heat pup grant
• A new low-cost loan scheme was introduced, allowing homeowners to borrow at significantly lower interest rates to upgrade the energy efficiency of their properties
• The VAT rate on heat pump installation was reduced to 9%, making it more affordable for people to switch to renewable energy
• And all homes built from 2007 onwards automatically qualify for a heat pump grant

These incentives have seen an increase in the number of SEAI-supported heat pump installations: from 2,272 (2022) to 3,769 (2023) to 2,584 for the first nine months of 2024 alone (projected to reach 4,723 for the full year).

Home energy upgrades

Looking at the wider picture, there is more good news. In the first half of 2024, some 10,150 homes were upgraded to a BER B2 or higher – mainly through insulation – which represents an increase of 34% over the same period last year. SEAI has estimated that the total number of home energy upgrades to B2 or better will reach 20,800 for the full 12 months of 2024.

Interest in SEAI’s Solar PV programme, meanwhile, continues to surge. There were 13,196 applications for solar PV funding to mid-year 2024 compared to 8,911 applications during the same six-month period in 2023 – an increase of 48%.

Amid understandable concern that Ireland is off course to meet its CAP24 targets, these figures are highly encouraging. The targets are ambitious but so too has been the Government’s response, providing another record budget (€437 million) in 2024 to ensure the residential retrofit sector continues to grow.

Heat pump-ready homes

As more people go about availing of SEAI grants to improve the energy performance of their homes and make them heat pump-ready, the next logical step is to incentivise those homeowners to finish the job by actually installing a heat pump. This can be done with the help of an Individual Energy Upgrade Grant which allows homeowners to take a step-by-step approach, adding one measure after another (e.g. insulation, heat pump, solar PV) to future-proof their home’s energy efficiency.

The new year brings us one step closer to 2030 and it’s clear that there is work to do. From a heat pump perspective, the report card shows clear progress in 2024 with further incentives undoubtedly to come from SEAI in 2025.