This increase is largely due to inflation and volatile energy prices, and particularly our reliance on gas for electricity generation. But the biggest contributing factor is Ireland’s housing crisis which has led to rising house prices and rents for over a decade. 

For instance, in Dublin, the average standardized monthly rent is now €2,102, double what it was a decade ago. As more and more potential first-time buyers are locked out of the housing market, they are pushed towards living in rental accommodation, where tenants have no control over renovating, insulating or upgrading the heating installations.

In fact, 30% of people in Ireland now live in a home they do not own. But in the bigger cities, the proportion of tenants is significantly higher than owners.

Recognising the landlord-tenant dilemma

The latest report from the Economic and Social Research Institute on the investment requirements for energy efficiency upgrades in the private rental sector is eye opening. 

Around €7bn to €8bn will be needed to bring all Irish homes towards a building energy rating (BER) of at least a B2 standard. This investment gap will need to be largely bridged by landlords, but this leads to a split-incentive situation known as the landlord-tenant dilemma.

This is a dilemma not only exclusive to Ireland, but also across Europe. Landlords have little incentive to retrofit the homes they are letting as they will have to incur the cost while not receiving the direct benefits. Yet, without the right incentives for landlords, it is the tenants who are left living in colder, damp accommodation while paying the high energy bills.

Building on existing frameworks such as the Climate Action Plan and the EU Energy Performance Buildings Directive homes can certainly help, but addressing this dilemma directly will require tailored policy measures that are aimed at landlords and tenants.

Solutions exist 

A significant part of the solution involves ramping up existing efforts when it comes to renovating and phasing out fossil fuel-based installations in buildings throughout the building stock, even if they do not specifically address the rental sector. 

Yet, to directly address this dilemma between landlords and tenants, policymakers and governments need to develop new measures tailored to address the specific challenges faced by landlords and tenants to ensure affordable housing as well as to avoid displacement and gentrification. Any solution towards renovating the rental sector must ensure that strong social safeguards are in place to shield tenants from higher housing costs that may follow renovations.

In Germany, for example, existing law allows landlords to pass on renovation costs by as much as 8% per year following renovation works, be they energy renovations or not. Instead, any potential rent increases need to be balanced with a reduction in energy costs for the tenants to prevent further financial stress. 

In France, property owners of G- and F- energy rated buildings are banned since 2023 from increasing the rent between two lettings without undertaking energy renovations. This ensures that tenants are not left paying higher rents and higher energy bills.

As of now, no such rental ceilings exist in Ireland to protect tenants who live in energy-poor accommodation from rising energy costs and rents. In terms of the EU policy framework, as part of the revised EU Energy Performance of Buildings Directive (EPBD) legislation, Ireland and all EU states have committed to taking national measures to reduce the average energy use of residential buildings by 16% by 2030 and 20-22% by 2035. 

The re-cast EPBD also signals a complete phase out of fossil-fuel boilers by 2040. It is left to the discretion of Member States, including Ireland, to introduce measures to achieve these targets and plan the phase-out through National Building Renovation Plans (NBRPs).

This provides the government with an opportunity to introduce minimum energy performance requirements for the energy-poor residential properties, particularly for rental accommodation, and include planned policies and measures to ensure that the decarbonisation of heating and cooling in buildings happens by 2040 in an holistic, inclusive and integrated way. In fact, the previous Fianna Fáil, Fine Gael, and Green Party government have already made commitments in their Housing for All strategy to introduce minimum BERs in the private rental sector starting in 2025.

The new Government also needs to initiate an early and ambitious public participation process to elaborate its NBRP draft, which must be finalised by the end of 2025 as part of the adopted text of the revised EPBD. 

In this planning process the Government needs to engage with stakeholders early and broadly, inviting participation from different sectors, including local governments, civil society organisations, community representatives, building professionals, trade unions and vulnerable groups and also tenants associations. Their insights are invaluable for identifying needs, challenges, and opportunities.

Renters in Ireland, particularly younger generations and low-income households, are feeling the pressure of the cost-of-living and housing crises. Helping them lower their energy bills while ensuring they are not burdened from extra costs can provide some much-needed financial relief and help them put away their money for their dream of owning a home one day. The government now has a major opportunity and responsibility to ensure decent, affordable and fossil-free homes for all, including renters, while also bringing Ireland closer to achieving its climate objectives.

• Mónica Vidal is Senior Campaigner at Climate Action Network (CAN) Europe and Clare O’Connor is Programme Coordinator at Friends of the Earth Ireland