For its 2026 budget, the Irish government will allocate a record 558 million ($648.1 million) for home and community energy upgrade grants, including the popular microgeneration scheme for residential PV, and will extend the 400 income tax exemption for microgeneration profits until 2028 to help reduce energy bills.
The total fund for renewable energy in Ireland's national budget plan for 2026 is nearly 1.1 billion, with a significant portion dedicated to the solar PV sector.
Ireland's Budget 2026 sets aside 558 million for residential and community energy upgrade programs, including the Solar PV scheme, to support the National Retrofit Plan.
With some of the highest energy costs in Europe, Minister for Climate, Energy and the Environment Darragh O'Brien stated that this investment will ensure energy remains secure, sustainable, and affordable for everyone.
The Home Energy Upgrade Loan scheme will continue, offering retrofit loans with interest rates starting at 3%. O'Brien noted that households could save between 750 and 1,120 annually by implementing comprehensive energy measures.
He also announced the extension of the 400 income tax exemption for microgeneration profits to 2028, which he believes will help lower costs for citizens. Approximately 150,000 households and businesses have registered their microgeneration capacity with ESB Networks, and this number is on the rise.
Much of this capacity comes from solar PV. The Sustainable Energy Authority Ireland (SEAI) has reported that solar PV has been a key factor in Ireland's retrofitting advancements. Concerns had arisen about increased applications for solar panel grants in 2024, driven by fears that maximum grant values would decrease in January 2025, which did drop from 2,100 to 1,800, with potential further cuts each year as panel prices decline.
Solar Ireland has asked the government to confirm that domestic rooftop solar grants will remain at 1,800, with CEO Ronan Power emphasizing the importance of this support for families, particularly those in need, while maintaining SEAI's oversight and quality standards.
This year's budget allocation for residential and community energy upgrade schemes increased by 89 million compared to the 469 million allocation for Budget 2025.
The 558 million for 2026 is expected to be supplemented by additional funds, including from the European Regional Development Fund, aiming to increase the allocation for the Warmer Home Scheme in 2026.
The VAT reduction on electricity and gas bills has been extended to 2030, with O'Brien confirming that the VAT will remain reduced from 13.5% to 9% until December 31, 2030.
Of the total nearly 1.1 billion in Budget 2026, 209 million will be allocated to prepare Ireland for climate change impacts, and 157 million is designated for environmental protection and circular economy initiatives.
Between 2026 and 2030, 500 million is earmarked for decarbonizing Ireland's energy system under the Infrastructure, Climate, and Nature Fund, with 21 million allocated for public sector retrofitting in this year's budget.
