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

James Carroll, Derek Lambert, Paul Lyons, Andrew O'Callaghan, Joel Franklin, Daire McCoy and Bryan Coyne
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James Carroll: Central Bank of Ireland
Derek Lambert: Central Bank of Ireland
Paul Lyons: Central Bank of Ireland
Andrew O'Callaghan: Central Bank of Ireland
Joel Franklin: Central Bank of Ireland
Daire McCoy: Central Bank of Ireland
Bryan Coyne: Central Bank of Ireland

No 12/SI/26, Central Bank Staff Insights from 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.

Date: 2026-07
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