The Minister for Environment has accepted more work needs to be done to improve take-up of a low-cost loan scheme which was heralded as an environmental ‘game-changer’ by government prior to its launch early last year.

In comes as new figures released to Prime Time show there has been a slow start to borrowings, with just €13m drawn down between April and December last year - a fraction of the scheme’s €500m budget.

The Home Energy Upgrade Loan Scheme has been promoted as a key part of government plans to retrofit 500,000 homes by 2030. It allows homeowners to borrow up to €75,000 at rates as low as 3%. The average drawdown last year was almost €50,000.

Asked by Prime Time if the 500,000 homes target was still achievable, Minister O’Brien insisted "I’m not giving up on that yet."

"We're leading in relation to retrofitting across Europe at the moment so we've done very well so far. Do we need to step that up? Yes, we do."

"Unquestionably more work needs to be done," he added.

"We need to ensure that there's clear advertising around the loan scheme, that people know how they can access it and what the benefits are because it is a good offering when you put it together with the significant grants available."

Loans under the scheme are available through PTSB, Allied Irish Bank and Bank of Ireland, while last month Avant Money, in partnership with An Post Money, also joined the scheme.

The initiative will run until 2026 and it is expected that seven credit unions will be added in the coming weeks.

The Department of Environment said the scheme was still new and consumer research suggested homeowners typically take around 12 months from first considering a home energy upgrade to proceeding with it.

However, Fergal Cantwell from retrofit company Envirobead told Prime Time the take up of the low-cost loan was disappointing and emblematic of a sector plateauing.

"The worrying part is that if you had asked anyone in the industry the main obstacle mentioned was finance, but now we have finance in place and the homeowners are still not taking advantage of it."

Mr Cantwell appeared on Prime Time in 2022 when the National Retrofit Programme was launched and described business then as "booming". Yet three years on while his company has expanded to meet demand, he said, "unfortunately, the market hasn't kept pace with that growth."

"I'm not trying to give the impression that we're all sitting around twiddling our thumbs. Business is going strong, but not progressing at the rate that we would have forecast or required to achieve the 2030 targets."

Almost 54,000 home energy upgrades were completed last year, up 13% on 2023 including a 24% increase in B2 upgrades - which is deeper retrofit work - according to the SEAI.

The percentage growth is less than seen across the previous two years.

Noel Rowland, Managing Director of One Stop Shop retrofit company, Churchfield Home Services, says the success of solar panel installations last year may be masking a shortfall in the wider targets also.

"If you were to dig down into the retrofit numbers and look at the number of fabric upgrades or insulation upgrades that were upgraded last year, those numbers are probably heading towards plateau or even in the wrong direction," he told the programme.

"And if you're looking at the number of homes that have heat pumps installed, those numbers are really lagging."

Mr Rowland expects the rate of take up on the low-cost loan scheme will grow in time, but says if so, the industry needs more support to help providers scale up to match it.

"Everyone is looking for the silver bullet but the reality is retrofitting is complicated. We as an industry have to ask how we can make it more simple and accessible."

There was a high-profile setback for the sector recently when a South Dublin couple were told to remove their external insulation because it was in breach of planning conditions.

Mr Rowland, who was the original contractor on the job, said while they are confident an updated application for retention would be successful the wider reporting could have a dampening effect on demand.

"If you've got somebody sitting on the fence that's just enough to knock them back. I hope the resolution of the story gets as much news as the issue when it arose."

Minister Darragh O'Brien said there had been "a couple of cases that have come up that surprised me," putting the issues down to potentially "overzealous enforcement officers." New planning legislation was not necessarily needed to address the issues, he said.

"I don't believe that it's a planning enforcement matter. They are isolated cases. If clarification is needed around the planning elements of it, that's something we're doing."

An "army of retrofit advisors" is needed to engage with people on a one to one level, Noel Rowland argues. A scrappage grant for boilers should be considered along with a referral fee for homeowners who recommend work to neighbours.

Minister O’Brien added he was looking at ways to make it easier to access grants and undertake retrofit work in a phased way.

"I've asked my department and the SEAI to come back to me with options around how we can break up some of those grants to make them more accessible. We can do that in certain areas, like on solar [panels] and it’s working very well."

"But some of the more deep retrofits require more extensive work and that can be expensive for households. That's something that I'm looking at."

For Fergal Cantwell of Envirobead inaccurate or misleading information is potentially affecting demand and while unregistered contractors are carrying out retrofits outside the grant system, he warns corners may be cut.

"The man in the van will obviously do the work cheaper but there is no regulation with that. SEAI have high standards for this work and that is where the price is."