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Irish businesses can significantly reduce the net cost of clean energy investments by combining grant funding with tax incentives — but timing and early planning are critical.
Financing can be a barrier facing Irish businesses considering decarbonisation projects. Yet 41% of attendees at our recent sustainability webinar cited a lack of awareness of available supports as their primary obstacle to accessing grants and incentives.¹
Irish companies can significantly reduce the cost of clean-energy investment by combining grant funding with targeted tax incentives.
This article shows how early planning and the right expertise can strengthen your business case and unlock meaningful savings.
When should companies seek tax input?
Tax incentives and grants can significantly reduce the net cost of decarbonisation investments.
Timing, however, is critical. Many grant schemes require no project expenditure prior to approval, while tax incentives may depend on specific elections or criteria being met. For example, energy-efficient equipment must be checked against the Sustainable Energy Authority of Ireland (SEAI) Triple E Register before purchase.
Missing any steps can lead to lost funding, clawbacks or penalties. So, companies should:
map available grants and tax incentives early in the project scoping phase
understand any conditions attached to each support
build these incentives into investment proposals to improve the return on investment (ROI) and support internal approval
involve tax teams before purchasing equipment, submitting applications or commencing works.
Case study: X Limited – an Irish manufacturer
Let’s illustrate potential savings with a hypothetical example, X Limited.
X Limited is a manufacturing company and a client of Enterprise Ireland. It wants to address rising energy costs and has already estimated its existing carbon footprint.
X Limited’s objectives include:
developing a detailed decarbonisation plan,
upskilling staff to lead the programme with an external training course.
assessing an investment in industrial heat pumps estimated at €1.5m.
X Limited’s grant and tax supports
The grant supports X Limited uses may be available to Enterprise Ireland clients. Other state agencies including IDA, SEAI and Local Enterprise Offices (LEOs) may offer similar grants.
1. Decarbonisation plan
Enterprise Ireland’s Strategic Consultancy grant is a support for accessing consultancy & engineering expertise if linked to decarbonisation capital investments. All Enterprise Ireland manufacturers can access a 50% grant rate, typically up to €35,000 in grant aid. Eligible costs are consultancy services directly linked to potential on-site capital investments relating to energy and fossil fuel reduction, e.g. develop a site’s decarbonisation roadmap, feasibility work, energy modelling etc. The strategic consultancy grant could support feasibility and design work projects such as thermal systems optimisation. A conversation with Enterprise Ireland is advised before applying for a grant.
2. Upskilling
Enterprise Ireland’s GreenPlus Grant covers up to 50% of eligible costs, capped at €50,000 in grant aid. This helps X Limited upskill four employees responsible for driving sustainability initiatives.
3. Heat pump
Enterprise Ireland’s Energy & Environmental Aid is a capital grant to support companies implement large-scale capital-intensive projects that reduce reliance on imported fossil fuels. This includes industrial heat pump investments. For integrated decarbonisation projects (for example heat-pumps, e-boilers, heat recovery, biomass, anaerobic digestion, efficiency, and other enabling works such as solar, BESS, flexibility etc), this type of funding has the scale and remit to incentivise multi-year decarbonisation projects that deliver vast emissions reductions, operational cost savings, and First-of-a-Kind projects.
Assuming the heat pump is on the SEAI Triple E Register and all other conditions for the relief are met,1 accelerated capital allowances (ACAs) for investment in energy efficient equipment should be available. This results in a 100% year‑one corporate tax deduction.
X Limited’s ACA cost calculation, based on €400,000 grant funding
| Cost component | Amount |
|---|---|
| Total heat pump cost (ex VAT) | €1,500,000 |
| Less grant funding | €400,000 |
| Qualifying cost for ACAs | €1,100,000 |
X Limited’s Irish corporate tax impact
A full €1,100,000 deduction at the 12.5% corporate tax rate results in a tax saving of €137,500.
Final cost to X Limited of its €1.5m investment
This calculation assumes X Limited can:
recover VAT on its heat pump purchase
use ACAs in full in the year of claim – that is, X limited has sufficient taxable profits in the year of claim to absorb the ACAs.
| Cost component | Amount | |
|---|---|---|
| Cost of heat pump | €1,500,000 | |
| Less | ||
| Grant received | €400,000 | |
| Corporate tax savings – ACAs | €137,500 | |
| After-tax cost to company | €962,500 | |
X Limited meets nearly 36% of its capital spend through grants and tax incentives.
Outcome
By strategically combining grants with accelerated capital allowances, X Limited significantly reduces the capital cost of a major decarbonisation investment. Its approach improves ROI, supports internal approval and anchors the company’s long‑term energy efficiency strategy.
"Irish businesses that combine grant funding with tax incentives at the project planning stage can significantly reduce the net cost of decarbonisation projects — but the window to act and benefit narrows the moment procurement begins."
Next steps
Start early
Map grants, incentives and conditions at project scoping stage. This applies not just to Irish projects, but equally to projects abroad as other countries also offer grant funding and tax incentives.
Watch timing
Many grants prohibit pre‑approval spending.
Stay updated
Tax incentives – Irish, EU and global – are evolving rapidly. For example, the Irish government's R&D Tax Credit and Innovation Compass signals potential pathways for an innovation tax incentive specifically rewarding digitalisation and decarbonisation.
Involve tax teams early
Prevent costly errors and maximise available supports.
Manage compliance
Ensure eligibility criteria and any required tax elections are met.
We’re here to help
PwC's Tax and Sustainability teams work with Irish businesses to identify, structure and maximise the value of available grants and tax incentives for decarbonisation investments.
Whether you’re at the early planning stage or assessing the tax treatment of a specific capital project, we can help you:
- navigate the process
- assess your eligibility
- present a stronger business case.
Speak to one of our team to explore the supports available to your business.
Explore our tax incentives services
Find out how PwC Ireland's tax team can help your business identify and structure the right mix of reliefs for your decarbonisation investment.
Meet our sustainability team
Our sustainability specialists work with Irish businesses to build investment cases that combine financial, tax and grant considerations from day one.
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