New ESRI research explores investment requirements for energy efficiency upgrades in the private rental sector

February 21, 2025

Energy and Environment
Climate
Housing
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The Economic and Social Research Institute (ESRI) has released a new report, funded by the Department of Housing, Local Government and Heritage, on the current energy efficiency status of buildings in the private rental sector in Ireland and the scale of the investment needed by property owners to lower carbon emissions.

The National Residential Retrofit Plan aims to improve the energy efficiency of homes, including private rental properties, by achieving a BER rating of B2 or the most cost-optimal level. As a starting point to meeting these targets, a detailed and thorough understanding of the current energy efficiency levels in the sector is needed. This research also examines the investment needed for upgrades and evaluates the financial ability of different stakeholders in the private rental housing sector to cover such costs. This research attempts to address these questions. 

Key findings:

  • Out of the 240,000-260,000 rented properties with BER below B2, the majority are either rated D (30%) or C (52%). The remaining, approximately 45,000 rented properties, have an energy efficiency rating of E1 or below.
  • The costs of upgrading to a B-rating vary substantially but are estimated to be €43,000 on average for G-rated properties and just under €30,000 for C-rated properties using 2023 prices. These estimates are based on the data of about 1,500 upgrades in social housing, Approved Housing Bodies, and private sector.
  • The total investment required by property owners to retrofit the rental sector to BER of B1-B2 is estimated to be between €7 billion and €8 billion. Meanwhile, retrofitting only the lowest efficiency rentals with current BER of E1 or below is between €1.7 billion and €2.3 billion.
  • The report also looks at the financial capacity of the households that are landlords in the private housing rental sector. This assessment points to a financial challenge for many household landlords in financing upgrades if they wished to do so.

Dr Janez Kren, co-author of the report commented: “The residential rental sector in Ireland is expected to undertake investments to lower carbon emissions in the coming years. This research attempts to quantify the scale of this challenge and provide an evidence base to inform policymaking in this area.”

Dr Conor O’Toole, co-author of the report commented: “Our research considers not only the scale of investment required to increase energy efficiency in the rental sector but also considers how such investments can be financed, in particular by household landlords. This analysis points to a need for external financing (through loans or otherwise) if these investments are to be realised.”