For its 2026 budget, the Irish government will allocate a record €558 million ($648.1 million) to grants for energy upgrades for homes and communities, including the popular micro-generation scheme for residential PV, and extend the €400 income tax exemption for micro-generation profits until 2028 to help reduce energy bills.
The total fund committed to sustainable energy in Ireland’s 2026 National Budget Plan is almost €1.1 billion. The plan was published on October 7 and includes a significant portion for the country’s solar energy sector.
Ireland’s 2026 Budget has earmarked €558 million for home and community energy upgrade programs – including the popular solar program – to support the implementation of Ireland’s National Retrofit Plan.
Ireland has one of the highest energy costs in Europe, and in comments to this year’s budget release, Ireland’s Minister for Climate, Energy and Environment, Darragh O’Brien, said the investment would ensure “energy is safe, sustainable and affordable for all.”
The Home Energy Upgrade Loan program will continue to be supported. This scheme offers retrofit loans with interest rates starting from 3%.
According to O’Brien, “a household could save between €750 and €1,120 per year by taking a comprehensive package of measures.”
He also clarified that the government has extended the P400 income tax exemption until 2028 for profits from electricity micro-generation, which he claimed would reduce people’s bills. He said around 150,000 households and businesses have already registered their micro-generation capacity with distribution system operator ESB Networks and this number is growing.
Much of this micro-generation capacity comes from solar PV. The Sustainable Energy Authority Ireland (SEAI), which implements these home energy upgrade programmes, has previously shared data showing that solar energy has been a key driver in the progress of home renovation in Ireland. There were some concerns that the increase in the number of people applying for solar panel subsidies for their homes and businesses in 2024 occurred due to fears that the maximum subsidy value would be reduced in January 2025. This was reduced from €2,100 to €1,800, with the possibility that it could be reduced by a further €300 each year in line with falling panel prices.
In its budget comments, Solar Ireland called on the Government to confirm that subsidies for rooftop solar would remain at the current level of €1,800. “That support is essential to keep solar energy accessible to families, including those who need it most, while maintaining SEAI’s strong oversight and quality standards,” said Ronan Power, group CEO.
Overall, this year’s allocation to home and community energy upgrade programs increased by €89 million, compared to the 2025 Budget allocation of €469 million.
The €558 million for 2026 is expected to be further supplemented with additional funding – including an allocation from the European Regional Development Fund – which will increase the allocation for the Warmer Home Scheme in 2026.
The VAT reduction on electricity and gas bills has been extended until 2030. “The government has extended the VAT reduction [from 13.5% to 9%] on electricity and gas bills until December 31, 2030,” O’Brien said.
Part of €209 million of the total almost €1.1 billion in the 2026 budget will go towards preparing Ireland for the impacts of climate change and €157 million is earmarked for support schemes for environmental protection and the circular economy.
A total of €500 million has been allocated between 2026 and 2030 to decarbonise Ireland’s energy system under the Infrastructure, Climate and Nature Fund established as part of the Budget last year. As part of this year’s budget, €21 million has been allocated to the renovation of the public sector.
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