High Electricity Prices Discourage Homeowners From Investing In Heat Pumps, Says SEAI Retrofit Tsar

High electricity prices remain the primary obstacle preventing homeowners in Ireland from adopting heat pump technology, despite government incentives and expanded financial supports under the National Residential Retrofit Plan 2026.

The director of retrofitting at the Sustainable Energy Authority of Ireland (SEAI) has reiterated that elevated electricity costs continue to discourage widespread investment in heat pumps, even as the state expands grant schemes, reforms the Warmer Homes Scheme for households at risk of energy poverty, and establishes a national network of SEAI One Stop Shops to improve access to energy efficiency upgrades.

Since 2019, the National Residential Retrofit Plan has supported over 244,000 home energy upgrades, but SEAI officials maintain that unless electricity prices become more competitive, the cost-benefit analysis for many households will continue to favor conventional heating systems over heat pump installations.

The National Residential Retrofit Plan 2026, published in January of this year, emphasizes reducing energy bills, improving home comfort, and lowering reliance on fossil fuels through measures such as insulation, heat pumps, solar energy, and deep retrofits. Additional supports include low-interest retrofit loans, reduced VAT on heat pumps and solar panels, and increased investment in retrofit skills training.

Despite these initiatives, SEAI officials state that persistent high electricity prices undermine the economic case for heat pumps, which rely on electricity to operate, and risk hindering national climate and energy efficiency targets aimed at retrofitting the equivalent of 500,000 homes to a Building Energy Rating of B2 or cost optimal by the end of 2030.

The plan also sets a goal of installing 400,000 heat pumps in existing homes to replace older, less efficient heating systems by 2030, a target that SEAI warns may be difficult to achieve if electricity costs remain a deterrent for homeowners considering the switch from fossil fuel-based heating.

While financial barriers such as upfront costs have been addressed through expanded grant access and loan schemes, the ongoing expense of running heat pumps due to high electricity tariffs continues to influence household decisions, particularly among those sensitive to long-term energy affordability.

SEAI’s position reflects broader concerns about the alignment of energy pricing policy with decarbonization objectives, as the authority advocates for measures that would make renewable heating technologies not only accessible to install but also economical to operate over their lifespan.