A much anticipated energy efficiency loan scheme offering low interest loans of up to €75,000 for homeowners to carry out upgrades which will make their homes warmer and cheaper to run has been launched by the government.

The Home Energy Upgrade Loan Scheme is a first of its kind programme in Ireland which allows people to borrow between €5,000 and €75,000 for up to 10 years, as long as the loan is for the purpose of carrying out home energy upgrade works.

The scheme is backed by the European Investment Bank and also has a government funded interest rate subsidy. This means that interest rates on these loans will be much cheaper than anything else on the market.

PTSB is the first to offer loans through the scheme, with interest rates from 3.55%. AIB, Bank of Ireland, Avant Money and seven credit unions (Clonmel, Connect, First South, Listowel, Naomh Breandan, North Midlands and Progressive) are also expected to begin offering loans in the coming weeks.

In comparison, most green home improvement loans currently have interest rates somewhere between 6% and 7%, while other personal loan rates range as high as 14%. These new loans are also not required to be secured against the property in question, as a mortgage would be.

The loans are available for home energy upgrade works which are being supported by home energy grants from the SEAI, and can result in 20% improvement in the building’s energy performance (BER).

The loan scheme was launched on Wednesday by Minister for the Environment, Climate and Communications, Eamon Ryan, Minister for Finance, Michael McGrath, and Minister of State Neal Richmond.

“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 accessing both loans and grants,” Minister Ryan said. “We also anticipate that with greater competition on the market, loan rates will also become more competitive, giving people more choice and value.”

The flexible range of the loan values means that homeowners can use them to carry out one or two improvements, or for a larger deep retrofit upgrading multiple elements of the property.

Homeowners apply for the loan through the financial provider, and can get to work as soon as it is approved. The works must be carried out by an SEAI registered One Stop Shop, Energy Partner or Communities Project Coordinator.

The energy efficiency loan scheme is being delivered by the Strategic Banking Corporation of Ireland (SBCI) on behalf of the Department of the Environment, Climate and Communications, with the support of the SEAI and EIB Group.

Minister McGrath welcomed the scheme, saying, “I am delighted that homeowners and small landlords will be able to avail of loans at very attractive rates to improve the energy efficiency of their homes. This has a double benefit in that it will both help households to reduce energy bills and also lower our CO2 emissions contributing significantly to meeting Ireland’s climate targets. The ability to combine a low-cost loan with SEAI grants adds to the attractiveness of the offering.”

“I welcome PTSB’s participation as the first on-lender in the market, with more to follow in the coming weeks. I encourage anyone with an interest in availing of the scheme to contact PTSB and other participating finance providers and I believe this initiative will have a very significant positive effect in the years ahead.”

Loans will be available for drawdown up to December 31, 2026 or until the scheme has been fully subscribed, whichever comes first.

Last year some 48,000 homes in the country received support for home energy upgrades through SEAI grants, an increase of 76% on 2022. It is expected that these home energy loans will see that increase further.

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

“The Home Energy Upgrade Loan Scheme provides financial support through banks and credit unions across the country and gives homeowners the tools they need to make a difference in the battle against climate change, putting power in the hands of individuals. 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.”

Further details on the Home Energy Upgrade Loan Scheme including the full eligibility criteria are available on the SBCI website.