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A Scenario Analysis of Financing Options for Energy Retrofits Among Irish Mortgage Holders

Author

Listed:
  • Carroll, James

    (Central Bank of Ireland)

  • Lambert, Derek

    (Central Bank of Ireland)

  • Lyons, Paul

    (Central Bank of Ireland)

  • O'Callaghan, Andrew

    (Central Bank of Ireland)

  • Franklin, Joel

    (Central Bank of Ireland)

  • McCoy, Daire

    (Central Bank of Ireland)

  • Coyne, Bryan

    (Central Bank of Ireland)

Abstract

Retrofitting homes to a Building Energy Rating (BER) of B2 or higher generates net lifetime savings for most households, particularly for those with a starting BER of C3 or lower. Financial benefits would improve significantly if 'Net Zero' climate targets are achieved as, in such a scenario, expectations would be for higher fossil fuel prices and lower electricity prices. Retrofitting through loan financing can create short-term cash flow pressures which may pose a significant barrier for many households. Longer loan terms and mortgage top-ups are the most effective means of smoothing costs over time, though they may result in higher lifetime credit costs. For Ireland to achieve its national climate targets and reduce household exposure to transition risk our findings underscore the importance of tailored financing options and supportive policies to encourage retrofitting at scale.

Suggested Citation

  • Carroll, James & Lambert, Derek & Lyons, Paul & O'Callaghan, Andrew & Franklin, Joel & McCoy, Daire & Coyne, Bryan, 2026. "A Scenario Analysis of Financing Options for Energy Retrofits Among Irish Mortgage Holders," Central Bank Staff Insights 12/SI/26, Central Bank of Ireland.
    • Handle: RePEc:cbi:stafin:12/si/26
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    File URL: https://www.centralbank.ie/publication/research-publications/staff-insights/financing-options-energy-retrofits-irish-mortgage-holders
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