Suggestions to replace the current grant aided scheme for retrofitting old houses with insulation with a new 'pay as you save' scheme have been heard.

While over 30,000 homes availed of grants this year to have work carried out, many more will have to be included if Ireland's to meet 2020 targets of reducing energy consumption by 20%.

The Minister for Energy Mr Pat Rabbitte, talking at a conference on retrofitting in Ireland, said negotiations were underway with the business, financial and banking sectors to provide funding for the "pay as you save" proposal. The current grant aids run until 2014.

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The new proposal follows a similar scheme in place in the US. It is understood that the new scheme will see people repaying funds for insulating their homes to modern standards over a number of years, in some cases up to 20 years.

Repayments are made as part of their energy bill, and based on savings made through energy efficiency. It is a move that could be worth €14bn to the Irish economy.

It is estimated that 3,000 jobs have been created through the current scheme and 100,000 homes have retrofitted modern insulation since 2009.

The scheme is, promoters say, self-financing. Homes that avail of grants save an average of €450 a year on energy bills.

(LB/BMcC)