SEAI's Brian Motherway (left), energy minister Pat Rabitte (centre) and the Department of Energy's Stjohn O'Connor launch the government's Better Energy upgrade programme on 11 May.

Earlier this month, energy minister Pat Rabbitte announced an "additional" €30M in government funding for building energy upgrade programmes for 2011. The government said the funds would "support an additional 2,000 jobs in 2011". These figures were reported largely without criticism in the national media. But they appear to be quite dubious, as our series of blog posts over the last few weeks has shown. Here's why:

The government claims the €30M in funding is additional to the money the previous government had committed to energy upgrades for 2011 (€60M). But the previous Fianna Fáil—Green government also announced a tax relief on home energy efficiency upgrades in Budget 2011, and this has yet to be introduced. The total value the last government pledged to fund the energy efficiency tax relief? €30M.

The tax relief will only be introduced if the minister for finance, Michael Noonan, signs a commencement order. The Department of Finance told Construct Ireland that it cannot state when or if the order will be signed. Commencement orders for budget measures sometimes remain unsigned for years — or forever.

Construct Ireland suspects the commencement order will remain unsigned, and that the €30M tax relief will quietly slip away. If we're correct, the government's claim to be putting an "additional" €30M into Better Energy is dubious. The tax relief may not have been part of that programme, but it was nonetheless an investment in making buildings more energy efficient.

We asked the Department of Communications, Energy and Natural Resources (DCENR) how the 2,000 jobs figure was calculated. It replied:

The number of jobs is derived from the additional monies allocated by the government which we know will leverage similar levels of private funding in what are labour intensive works and based upon the typical wages in the sector.

But if the money isn't really "additional", neither are the jobs. After all, the tax relief would have created jobs too. What's more, the 2,000 jobs figure does not appear to take into account potential job losses from the withdrawal of grants for heat pumps and biomass boilers — Construct Ireland is already hearing about companies losing work due to these grants being pulled.

We also emailed DCENR asking why it withdrew grants for some renewable technologies while maintaining support for oil and gas boilers, but a spokesperson did not address the question directly, and simply said:

The grant available for a new oil or gas boiler only represents a contribution to the additional cost incurred by the homeowner in choosing a high efficiency boiler (i.e. >90% efficiency) versus the standard required by the building regulations (i.e. >86% efficiency). The homeowner must also install heating controls in order to avail of the €160 subsidy.
 

Earlier this week we sent three questions to the Department of Communications, Energy & Natural Resources (DCENR) on the government's Better Energy building upgrade programme. Here's how they responded:

CI: Has the proposed tax relief on energy efficient works for homeowners that was announced in Budget 2011 been scrapped? 

DCENR: The tax relief announced in Budget 2011 is subject to a commencement order, which at this point has not been brought forward by the Minister for Finance.  

CI: The press pack that accompanied the launch of Better Energy said the government had previously set aside €60m for energy efficiency upgrades in 2011. But the budget set aside €69.252m for capital expenditure for "sustainable energy programmes". Was the €60m figure a typo?

DCENR: The original budget allocation for retrofit was around €60 million for capital works with the balance set aside for current.

CI: How was the department's estimate that the "additional" €30m funding for 2011 would create an extra 2,000 jobs calculated? Did this figure take into account any potential job losses from the withdrawal of grants for heat pumps and biomass boilers?  

DCENR: Applications for heat pumps and biomass boilers have declined considerably in recent months with applications in these areas representing in the order of 10% of the total applications received. This was factored into our calculations.

Note: We would presume it is now highly unlikely there will be any commencement order for the €30m tax relief referred to in question one — this makes it potentially dubious for the government to claim it is putting an additional €30m into Better Energy. As you can see, our query as to how the 2,000 jobs estimate was calculated was largely ignored. 

Last week, we raised some questions about the accuracy of the government's claims that its new Better Energy building upgrade programme represents an additional €30m investment over what was initially promised for 2011.

The other big claim the government made was the €30m figure would create an extra 2,000 jobs this year. Of course, if the €30m is not actually new funding, but just a re-allocation from a tax relief on energy efficiency works that appears to have been scrapped, the 2,000 figure looks highly questionable. Is the department claiming that putting €30m into Better Energy is creating 2,000 more jobs than would have been created by the tax relief?

The government says its €30m investment will be matched by €30m of private sector investment. So that's €60m altogether. So is it simply presuming this will yield 2,000 jobs with an average wage of €30,000, or is its calculation — as one would hope — more sophisticated?

Also, has it considered the potential for job losses in the heat pump and biomass boiler sectors due to the withdrawal of grants from those industries? We're already hearing about companies coming under serious pressure due to the removal of grants. Of course from the government's point of view, the purpose of grants is to stimulate a market to  a point where it's healthy and there's a good range of choice for consumers. It clearly thinks the heat pump and biomass boiler sectors are now there, making it the right time to remove the grants.

But what kind of message does it send to eliminate grants for heat pumps and biomass boilers while maintaining support for oil and gas boilers?

We've put questions on all of the above to the Department of Communications, Energy and Natural Resources and are hoping to have a response in the next few days.

Launching its Better Energy building upgrade programme earlier this week, the Department of Communications, Energy & Natural Resources said it had committed "an additional €30m towards the programme" for 2011. It added that "capital funding of €60m was allocated for energy efficiency initiatives in Budget 2011". So reading the press pack, you get the impression the previous government allocated €60m, and the current one is now adding €30m to that.

But is this really the case? 

As part of his last budget, former finance minister Brian Lenihan introduced a tax credit scheme — under this, homeowners could claim a tax credit on home energy efficiency works. Lenihan set aside €30m for the scheme for 2011.

But there was no mention of the tax credits as part of the launch of Better Energy, and the scheme does not appear to be open or imminent. Has it been dropped, and if so can the government claim the €30m of additional funding it announced on Wednesday is extra?

What's more, while the Better Energy press pack says "capital funding of €60m was allocated for energy efficiency initiatives in Budget 2011", the figure in the budget actually appears to be €69m. The €60m figure may be a typo, but if not it means that a total of €99m originally set aside for this year has now become €90m.

We hope to have a reply from the department to clarify things shortly. 

 

 

 

 

Here's our usual round up of links that might interest you: 

It seems high oil prices are strangling global economy recovery. According to the FT: "Four months after the OECD warned that soaring oil prices could damage the economic recovery...that IEA has noticed that global oil demand has begun to flatten." Financial Times. This is a point we've been making as part of our Energise Ireland campaign — it's one reason we urgently need to wean Ireland off imported oil. If you agree, please sign the petition at the Energise Ireland website. 

Renewable energy can power the world, says the UN Guardian

Does preserving historic buildings save energy or not? Green Building Advisor

Profile of a passive hour project in New York Green Building Advisor

Have we reached peak coal? Energy Bulletin

Profile of a Spanish "grow home", designed to be "expanded and changed to fit the space needs and budget of its owners". Treehugger

The case for government investment in public transport — this argument applies to the US, but it makes sense for Ireland too The Infrastructurist

Biomass electricity production: how green is it? Green Building Advisor

SEAI recently proposed a series of changes to Deap — the software tool used to calculate BERs — including a reduction in its primary energy factor. But while this will benefit electrically-powered heating devices, some in the industry still feel systems such as heat pumps are disadvantaged by Deap and the BER system

An energy conscious renovation and extension in south Dublin breathes new life into a typical semi detached home — the house is now wrapped with external insulation and boasts breathable and ecological materials too.

After a long struggle to build their home, Karen and Steve Ward finally got their wish — an energy efficient, timber frame house that boasts a palette of healthy and ecological materials and a fully renewable heating system.

The advent of central heating improved the comfort of life for countless Irish people over the past century, but as energy efficient building grows, some pioneering homeowners think they can live without it. What’s life like for them?

Hey everyone, we've just launched our Energise Ireland campaign for a green energy and economic revolution in Ireland. We need all the support we can get for what we believe is a vital campaign — you can read the manifesto and sign the petition at the campaign website, and follow us on Twitter too. 

Energise Ireland has five key aims, all of which we believe are crucial to developing a sustainable, thriving economy in Ireland.

1. Become oil free & no longer a net energy importer by 2025. If we don't do this, the rising cost of importing oil will stifle our economic recovery.

2. Develop green bonds to offer Irish citizens a safe, patriotic investment in sustainable energy projects.

3. Upgrade the entire building stock to net zero carbon by 2020, by retrofitting buildings and switching to renewable heat and electricity.

4. End fuel poverty by 2015 to protect the health of the most vulnerable in society while reducing cost to the taxpayer.

5. Implement world leading green public procurement requirements, giving Irish suppliers an innovation edge for export.

For anyone uncertain, here's a reminder of why it's crucial for us to wean off oil as soon as possible. 

Let us know what you think about the campaign — email us at info [at] energiseireland.ie, or comment below. And if you like it, please sign the petition.