As energy costs continue to soar, new research from Banking & Payments Federation Ireland (BPFI) shows that two-thirds (64%) of consumers have carried out at least one significant energy efficiency home improvement with 42% planning to do at least one in the next three years.
The research, carried out by Amárach, as part of a new paper by BPFI on Sustainable Finance also found:
— reducing energy/fuel costs is the main motive for customers to go green (47%) followed by making the home warmer (24%) and reducing the amount of energy wasted (13%)
— a total of 8% cited reducing carbon emissions as their main reason for home energy efficiency improvements.
— 50% of consumers who have improved or plan to improve their home’s energy efficiency rely on savings; between 43% and 54% of those planning to make home energy improvements in the next three years plan to use savings with between 26% and 38% planning to use government grants, credit union or bank loans or mortgage top-ups, for the most part, make up the rest of the financing.
— more than half of respondents (53%) had attic or wall insulation while about a quarter had upgraded heating controls (26%) or condensing boilers (24%);
— only circa one in ten respondents said their home used solar power (13%) or heat pump systems (11%) with only 18% and 13% of respondents respectively planning to invest in these in the next three years;
— 42% of respondents said they had looked into solar power (33% for heat pumps) but were unlikely to make the investment in the next three years;
Published alongside the research, BPFI’s Sustainable Finance Paper looks at the role banks are and must play in the context of targets set by the Government’s Climate Action Plan and sets out a number of recommendations which will be crucial in enabling the sector to remain a core part of the climate transition. Speaking about the report and its key recommendations Brian Hayes, Chief Executive, BPFI said:
“Irish retail banks have already made significant movements to deliver on the objectives of the Climate Action Plan by providing much-needed finance at preferable green interest rates to thousands of customers to improve their energy efficiency. However, there is still a way to go. It is estimated €20 billion per annum of investment will be required over the next ten to reach Ireland’s emission reduction target – about one-third of which will be public capital spending with the rest needing to come from private investment. It is clear therefore that without the mobilisation of private finance, targets set out within Climate Action Plan cannot be reached.”
“As well as calling for an enhanced government-private sector partnership to help scale up green finance to households and businesses, our report today also highlights additional asks from the banking sector including access to detailed and accurate information on energy performance, the need for great policy certainty for planning purposes and a clear understanding of transition pathways for each economic sector.”
Access to SEAI’s BER Register
“In order to be effective in scaling up financing of energy efficiency and understanding balance sheet risks and opportunities, lenders need access to detailed, accurate information on energy performance particularly given that almost 80% of lending by retail banks in Ireland is linked to property. BPFI is therefore seeking access to the SEAI’s BER Register, the database on energy performance certificates. This access is critical in enabling lenders identify and manage climate-related risk in their portfolios, and align with the new EU Taxonomy on sustainable economic activies, as required under new regulation.
Risk of considerable disruption without continued policy certainty
Mr Hayes continued: “The radical and long-term policy changes required to deliver on the government’s 2050 net zero targets could potentially create considerable disruption if not implemented in a targeted and measured way. Policy certainty is essential for the regulated financial services sector but also for the sectors that are customers and clients of financial services to ensure a minimal disruption and maximum impact, particularly given the role in supporting the real economy, via financing of households, SMEs and corporates.”
“The government’s provision of sectoral transition pathways is essential to foster credible, achievable and orderly transitions to net zero for each area of the economy; To translate climate ambition into climate action, banks must understand transition pathways for each economic sector and support these pathways with financing. This will inform banks’ strategies and ensure their financing and advice to customers supports Ireland’s climate targets.”
Mr Hayes concluded: “The Irish Government’s Climate Action Plan reflects Ireland’s commitment to the green transition and makes Ireland one of the most ambitious countries in the world on climate. However, while change is underway, as clearly demonstrated by our consumer research, the targets set leave us in no doubt that a mountain has yet to be climbed. With consumers and businesses now face an escalating energy and cost of living crises as the winter sets in it’s a very real reminder that time is of the essence.”