Owen Lewis told a recent conference that new “passive” homes – which come complete with a number of energy efficient features including 300mm of insulation and triple glazing – can cost between 100 euros and 200 euros to heat, according to the Irish Independent.
Professor Lewis said that despite the fact that VAT on fuels is currently low, consumers still have to pay full charges on thermal insulation, which cuts heating bills over the long-term.
He added that the best way to combat carbon emissions is through the construction industry and suggested that a way to encourage people to make their homes more energy efficient is to decrease the VAT rate.
“If you decrease the VAT rate, you provide incentives to get people to do what you want them to do, such as spend their money on insulation,” Professor Lewis said.
He explained that similar progressive tax systems are now underway in the Netherlands and that the Irish government should do more to promote such a scheme.