Energy infrastructure

that’s the question I asked though!

Have you any thoughts on this?

Ok.

So can you tell me how people are expected to pay the repayments on a loan for this?

Pretty fundamental question seen as money is a finite resource.

Problem is when you introduce a grant to get something done, the market reacts and the price increases.

For example attic insulation costs €1000,

government introduce grant of 50%= €500,

attic insulation price increases to €1500.

This is happening.

I would also say there a sizeable chunk of the population (the squeezed middle) who won’t qualify for grants and don’t have money lying around to improve windows or doors or reduce drafts.

After the relatively cheap cost of upgrading attic insulation you are into costly amounts that a loan would be required for.

The loan obviously requires monthly repayments which a large proportion of people just don’t have.

The point I’m making is that if the government introduce a grant for a certain % the market just adds that grant to the price.

Its a sad fact but that’s just the way the market works.

Also insulation costs were increasing long before the current oil spike.

Yeah you are missing something.

When a grant is introduced that just gets absorbed by the materials provider plus the installer etc.

The person paying for the product doesn’t really see any benefit in the grant.

Purely anecdotal I’ll admit but there ya go.

Oh god that whole twitter thread is just full of misleading statistics like "Wind turbines generate electricity ~30% of the time & solar panels ~20%." that the fossil fuel industry have been using for decades to attempt to discredit renewables.

The graph source is also from a niche American lobbying organisation. Rather than from a highly respected organisation like Lazard's who have been producing a Levelised Cost of Energy (LCOE) Report for ~15 years: https://www.lazard.com/perspective/levelized-cost-of-energy-levelized-cost-of-storage-and-levelized-cost-of-hydrogen/

Lazard's have very different numbers that don't produce "nuclear is the silver bullet" kind of answer that Gitt's graph suggests.

Edit: Only noticed now that the graph is comparing *existing* nuclear versus *new* solar. Haha. This is like how to lie with statistics 101.

It's not a general rule that markets work that way. They can behave that way but only if there's a completely inelastic supply. The cost of the insulating materials is set internationally, so is effectively fixed and is not affected by Irish demand. The aspect that is affected by Irish demand is the supply of labour/installers. But there's a range here depending on the skills required - while you're assuming behavior at then extreme.

Fitting attic insulation is effectively unskilled labour so supply should be completely elastic. There may be other forms of insulation installation which require rare specialist skills where supply will respond much more slowly. But even in this case, we're not talking about lawyers and the like (where there are artificial/legal constraints on entry into the profession), so eventually supply will grow to respond.

Coincidentally - after reading a bit more about heat pumps, look at the number of tradesmen offering to fit heat pumps in the UK - it has exploded in the last years - responding to UK government grants to replace gas boilers.

I think what you might be referring to is the scenario where the grant-compliant companies charge more than the non-grant compliant companies, usually by a similar amount to the grant, in order to cover the additional admin cost of the grant paperwork.

OT, but I had one case of a builder quoting for a bathroom renovation. For the exact same work/materials, to do it the grant-compliant way would have cost more than the grant.

Look the fact is they do behave that way.

Ask an installer how much PV costs and they’ll give you a price which includes claiming the grant and then they’ll give you a cash price.

The price including the grant would have been cheaper before the grant was introduced.

This is the market reacting.

Same happens in other industries.

Introduce a rent supplement, guess what the minimum cost of rent increases.

Its just the way it works.

So in other words it just doesn’t make financial sense to deep retrofit existing stock.

By all means insulation and even new windows etc but after that, financially, there’s not a whole lotta sense.

Fully agree with you on the green hydrogen.

I think it’s an emerging market we should be getting in on.

I just hope the whole industry doesn’t get held up in policy changes and planning delays for decades.

Are you sure about no heating system needed Sam? Assuming you mean Passive Haus when you say A-rated, even those houses have a heating system built into MHRV. Without a heating system, if you go away for a week or 10 days at Christmas, you're going to need some way of bringing the temp back up. It would take a lot of body heat to do that.