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Investing in green energy: Is increasing your home’s energy efficiency cost effective?

House 4 min read

01 Oct 2019

We all know the feeling: stepping out of our comfort zone, ripping off a plaster, tackling that rigorous task – the job we’ve been putting off for years. The one we know will benefit us in the long run but we just can’t seem to find time for.  

When deciding whether to invest in the energy efficiency of your home, there are range of different factors to consider, but cost is of course a big one.

Looking at the cost of upgrading and evaluating if it outweighs the potential financial return and long-term benefits is different for every home, as everyone has varying levels of energy consumption. But for many it is a worthwhile investment, not only because of the money you save on energy bills but the value of your property may also increase as its BER or EPC rating improves – (the measures used when evaluating your home’s energy efficiency in ROI and NI) you can also cover a lot of the cost with a range of grants available.

How much could I save on energy bills by upgrading?

You could save up to €2,020 per year, if you upgrade from a D to an A BER rating. 

According to the SEAI the average home in Ireland has a ‘D’ BER rating – (the grade used to measure your home's energy efficiency, with an A-G scale). They say a 150m2, 4-bed home with a 'D' BER rating spends an average of €2,580 on heating bills every year, while the same home with a BER rating of A spending as little as €560 - a saving of €2,020 per year.
Similarly, in Northern Ireland, where homes are measured by their EPC - Energy Performance Certificate - you could save up to an average of £1,748 per year by increasing your rating from an 'E' (the average rating in NI) to an 'A.'

Obviously every household is different, so you would have to calculate your own savings based on your BER rating and your energy bills each year. You can calculate your BER rating using the calculator tool on their website. For more information on assessing your home's EPC, click here.

How much will it cost for this energy upgrade – and how much can I get an energy grant for?

If you want to complete all upgrades we have listed below, it could cost a total of €17,000 or £14,692 in NI - but if you receive an SEAI grant in ROI for all of the works, it amounts to €12,550.
For grants in Northern Ireland, Bryson Energy manages the Bryson Energy Advice Line advice to householders plus referrals to energy grants and other sources of help in the region. 

The SEAI energy grants in ROI covers a significant amount of some of these upgrades/costs. The grants are not assessed on income, i.e. they are not means tested.  If the average 4-bed household decides to go ahead with all of the works listed, they can receive a grant relief of up to €5,500 bringing the potential total cost of the works to €12,550.

PlanEnergy - Sustainable Energy Solutions have broken out the average costs and savings of the most popular home improvements – and we’ve included the possible SEAI grant relief for ROI alongside these.  

  • Cavity Wall Insulation costs on average €600 - €1000 or £531-£886 in NI. This will save you €200 - €300 or £173-259 per annum in heating costs meaning the costs will be paid back over 2-4 years.
    SEAI Grant relief: Up to €400. 

  • Solid wall insulation costs range from €7000 to €25000 or £6,200 to £22,167 in NI, depending on the size of the dwelling and on whether it's internal or external wall insulation that's fitted. Annual savings on heating costs will vary ranging from €350 to €700 or £310 to £620 per annum depending on house size and heating type.SEAI Grant relief: Up to €2,200

  • Replacing an oil or gas boiler with a condensing boiler – Excluding installation the boiler should cost between €1500 to €2500 or £1,329 to £2,200 in NI, but will save 10% to 12% off your energy bill per annum.

  • Using a hot water cylinder jacket is one of the most cost effective measures available. From as little as €13 or £11.50 you will be paid back in 6 months – 1 year.

  • Loft insulation for an average 3 bedroom semi would cost around €600 or £530 with savings of around €160 or £141 per annum

  • Solar Photovoltaic (PV) Panels. These are the panels that generate electricity and run off daylight not sunshine. For a 3 bed semi the costs would be between €5000 and €7000 or £4,430 and £6,200 in NI, with average savings generated of €250 or £216 or more per annum. Any unused electricity can be used to heat your water or your electric vehicle.
    SEAI Grant relief: Depends on Usage. Typical system of 1.5kWp: Grant €1,050. System 3kWP grant: €2,100

If you complete three upgrades your grant value will be increased by €300. If you complete four upgrades your grant value will be increased by an additional €100. A total of €400. You can view all the information on the grants and costs on the SEAI website here

So – how can I pay for this? How much would a green home Improvement loan cost?

You will need to pay for the work upfront before receiving any grant money – but getting a low cost green loan on the cost of €12,550 or £14,692 makes sense in this scenario – as you will make back the money you pay on interest.

For credit unions in the Republic of Ireland with a dedicated home improvement loan rate*, the average loan rate was 7.7% APR and the lowest rate was 4.33% APR.

If you take out a €12,550 green home loan at 7.7% APR over three years to cover your upgrade costs, you would have a total interest repayment of €2,947 – (total amount repayable €15,524) - with 36 monthly repayments of €991. 
So to take out a loan for your upgrade, it would cost you a total €15,524 – but looking the average payback you will receive on energy bills for a 4-bed home with an A rating, you could make your money back in 7 years.

For Northern Ireland, if you take out a green home improvement loan on the cost of £14,692 at 12.68% APR, you would have a total interest repayment of £1,862 (total amount repayable £16,554) - with 36 monthly repayments of £459. But, if you upgrade your home from an E to an A rating, you could make your money back in 9 years. 

Remember, these APRs are just examples so you could get something even lower with your local credit union!

At the credit union we do all types of loans to meet all your needs no matter how big or small. So if you’d like to inquire about a loan today, we’d be more than happy to chat.

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