Budget 2026 may have disappointed many in the agricultural sector and the squeezed middle, but depending on your area of interest, the renewables space could offer some positives.

This week brought the announcement of over €1 billion in energy transition funding under Budget 2026. The investment targets several of the Government’s key priorities, including retrofitting, solar PV, offshore wind and VAT reductions.

However, many of the key requests from both the farming sector and the renewables lobby were overlooked, raising questions about the Government’s long-term commitment to these industries.

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VAT reduction

Budget 2026 will extend the 9% rate of VAT on gas and electricity bills until 31 December 2030. The move is expected to help alleviate energy cost pressures for households throughout the year.

Renewable electricity

The Government has also extended to 2028 the €400 income tax exemption for profits from the microgeneration of electricity.

A record €3.5 billion will be provided to ESB and EirGrid for investment in national grid infrastructure for 2026 to 2030 as part of the recent National Development Plan review.

SEAI

Around €724 million has been allocated to the development and deployment of renewable energy and to improve the delivery of energy efficiency in the built environment.

This includes a record capital allocation of €558 million for SEAI residential and community energy upgrade schemes, including the Solar PV scheme. This is an €89 million increase on the corresponding Budget 2025 allocation of €469 million.

Implementation of the Home Energy Upgrade Loan Scheme, which provides low-cost retrofit loans with interest rates available from 3%, will also continue to be supported.

Funding for continued supports, advisory services and energy research has also been maintained.

Funds and EPA

Almost €82 million in funding has been allocated under Ireland’s EU Just Transition Fund Programme for approved projects across the wider Midlands region.

The budget has set aside €28 million to support Ireland’s international climate commitments, and a further €64 million will go to the Environmental Protection Agency (EPA) to strengthen its monitoring, research and enforcement programmes.

Infrastructure, Climate and Nature Fund

The Infrastructure, Climate and Nature Fund (ICNF), established under Budget 2025, was designed to manage windfall tax receipts and support Ireland’s climate transition by funding designated projects from 2026 to 2030.

A €500 million allocation for Department of Climate, Energy and Environment projects under the ICNF, as outlined in the revised National Development Plan for 2026 to 2030, will focus on developing new markets to accelerate the diversification and decarbonisation of Ireland’s energy system.

Over the five-year funding period, in addition to offshore data surveying and public sector retrofitting, investment will be directed towards early phase infrastructure for a National District Heating Market.

In parallel, funding will support the development of a National Biomethane Market under the National Biomethane Strategy.

The Department stated that this will support the creation and operation of a domestic biomethane industry producing zero carbon gas from grass and organic waste. Government investment in market infrastructure will be central to establishing and scaling this emerging sector, it said.

No details were given on how much of the €500 million will be allocated towards the biomethane sector, what form of support it will take or when it will be delivered.

Offshore

Budget 2026 provides €8 million in investment for offshore renewable energy site data surveying to help de-risk future projects.

Under the first phase of ICNF funding, this amount has been allocated in 2026 for the Offshore Site Surveying Programme.

Circular economy

Budget 2026 will provide €30 million for the Landfill Remediation Programme and a broader allocation of €157 million in the area of the circular economy.