Dáil Éireann Debate, Tuesday - 26 May 2026
206. Deputy Barry Heneghan asked the Tánaiste and Minister for Finance whether consideration has been given to the introduction of additional tax incentives aimed at encouraging investment in renewable energy technologies and residential energy efficiency upgrades, including apartment-based solar generation technologies such as plug in balcony solar systems; and if he will make a statement on the matter. [39892/26]
View answerIreland’s tax system supports efforts to transition to a low-carbon economy and, over the past number of years, several tax reforms have been implemented to encourage behavioural change and support energy efficiency. This includes a number of measures specifically to support home energy efficiency improvements and upgrades, including the following:
• Following amendments in the VAT Directive in 2022, the Government was able to introduce a zero rate of VAT, effective from May 2023, for the supply and installation of solar panels on private dwellings. In Budget 2025, the lower 9% rate of VAT was extended to the supply and installation of heat pump heating systems.
• Section 216D of the Taxes Consolidation Act 1997 provides a relief from income tax to encourage more taxpayers to engage in micro-generation of electricity at their own homes from renewable technologies. The tax relief was due to expire on 31 December 2025 and Budget 2026 provided for an extension to this scheme to 31 December 2028.
• Section 97B of the Taxes Consolidation Act 1997 provides a tax incentive for small-scale landlords who undertake retrofitting works while the tenant remains in situ, which has the aim of encouraging landlords to improve the energy efficiency of rented residential properties.
With regard to business investment in energy efficiency, the Accelerated Capital Allowances (ACA) scheme for Energy Efficient Equipment (EEE) is designed to improve energy efficiency among Irish companies by incentivising companies and sole traders to purchase highly energy efficient equipment. The ACA EEE scheme provides for a 100% up-front wear and tear allowance for qualifying expenditure incurred in a given year, providing a cash flow benefit to the taxpayer as the allowances would normally be available over eight years at 12.5% per annum.
Overall, Ireland’s tax system supports climate resilience by incentivising the uptake of low- and zero-emission vehicles, lowering long-term energy costs, and supporting households most affected by increasing fuel and heating costs through targeted supports.
Tax policy measures and options with regard to behavioural change and emissions reductions are kept under review as part of the annual Tax Strategy Group and Budgetary cycle.
