Mr. John O'Sullivan:

Because we are bidding into the ICNF, there is definitely a commercial side to the business case. We must assess what the return is on the investment.

The Senator asked a question earlier about whether we take preventative costs into account. We do, absolutely. If there are costs avoided later by progressing with this work, then that is taken into account. We also take into account the wider benefits of what is, in effect, a new industry. The labour, VAT, materials and the returns that would come back to the Exchequer are all taken into account.

In saying that, in our work with our parent Department – the Department of the Environment, Climate and Communications – on the ICNF, it is allowing us to ensure that it is not going to be assessed purely on the commercial return, but that there will also be a qualitative element to it. As Senator Higgins says, it is taken into account that the national priority is achieving targets and, even though deep retrofit might be more expensive and does not return very quickly, there may be infringements and penalties at a later point.

What is transpiring is that it makes more sense anyway to focus on those measures that save energy faster because money flows with energy savings and that helps to build a strong business case around this funding. There will be a return there. We are also taking into account the shadow costs of carbon. New shadow costs were announced last year. That very much helps the business case.

The other point relates to what the SEAI is doing. In our pathfinder programme, every body and contracting authority must abide by a principle that whatever they do, it cannot be revisited at a later stage to do a retrograde activity with an additional investment. It must be on a pathway to NZEB. We assess our supports in that way.

As we are developing a scheme that is looking at directing funding towards optimising a building from a retrospective commissioning and a light upgrade point of view, it potentially opens the door for the energy performance contracting that we spoke about earlier. Energy service companies will be interested in that business because it will pay back much more quickly. If we can understand how to get through the obstacle of on-off Government balance accounting of new debt, then this scheme can work and things will move very quickly. We will be working in the whole area of doing things that the supply chain in Ireland is more capable of meeting right now. Deep retrofit is quite a specialised business. It is a relatively small supply chain that is there right now that needs time to develop and grow. It needs the signals Mr. Meally mentioned earlier for the type of investment that will be coming through the public sector. In the meantime, we can focus on the easier-to-do, lower-cost, high-impact measures. The point is that it will return very quickly. There is quite a positive return on these projects.