Housing Minister Eoghan Murphy insists that the Government is still on track to retrofit half a million homes by 2030 - despite the fact there is no money left for the retrofitting grant offered by the Sustainable Energy Authority of Ireland (SEAI).
The grant provided 50% of the price of extensive energy upgrades in older homes. The news that there is no money left in the pot will potentially leave hundreds of homeowners in the lurch.
Despite the scheme collapse, Mr Murphy said the Government is confident of meeting climate targets.
"We have a very ambitious plan for both shallow and deep retrofit of the existing housing stock," Mr Murphy said.
"Under our climate action plan, we want to do 500,000 homes. What's in the news about one particular pilot scheme that was put in place for deep retrofit - there was a limited amount of money put beside that. That money has now run-out. The funding for SEAI for these types of grants under other schemes that they have actually increased this year, I think by about 25%."
The government has come in for strong criticism in the wake of the news of the funding running out.
Louise Heavin is one of those affected. She submitted the application before the July 12 deadline but has yet to be told if she was approved or not.
The Athlone-based Green Party councillor said that without the grant, she won't able to afford the work required, which includes replacing an oil heating system and improving the building fabric.
“We are in the situation where we have had to completely rethink because we simply won’t be able to afford what we had planned for," she said.
"Without the grant, this will now be financially unattainable for huge numbers of people who are now left in limbo, often with structural preparation for the project already begun."
Labour's Alan Kelly has demanded an urgent meeting of the Public Accounts Committee with representatives from SEAI and the Departments of Climate Action and Expenditure present.
"This is the most outrageous affront on not just the environment but will lead to an absolute distrust from the public when it comes to green-related initiatives.
"People just cannot put their investments on hold to wait for the government to turn its back on a scheme it is continually boasting about."
Fianna Fáil spokesperson on housing Darragh O'Brien said it is another example of Government climate plans that have no substance.
"The SEAI can make all the commitments in the world to honour its contracts, but without funds from the Minister they are limited in their efforts," he said.
There were 17 firms approved to deliver projects under the scheme. Among these were 3 Counties Energy Agency (3 CEA), a Kilkenny-headquartered company whose CEO has warned that hundreds of jobs are now at risk in the sector.
Paddy Phelan said his company was in daily contact with SEAI and had never been told that the scheme was in danger.
"The Climate Action Plan set a target of 500,000 energy retrofits of existing housing stock in the State over the next two decades.
"However, as of now, there is no State programme for deep retrofitting and no new scheme is likely to be set up before the end of 2020 at the earliest. It’s a massive slap in the face to everyone," he said.