The Government has been urged to increase supports for district heating.
The Irish District Energy Association said it would offer "an unrivalled opportunity" to reduce Ireland's vulnerability to "sudden spikes in fuel prices and interruptions in supply".
The lobby group said that most of Ireland's energy is generated outside the country using fossil fuel.
IrDEA cheif executive Pauline O'Reilly said that with the Government planning to build 300,000 homes by 2030, there is a "once-in-a-generation opportunity to take advantage of the opportunity that district heating offers for clean, secure, low-cost heat".
District heating uses a centralised heat source to heat multiple buildings across a potentially wide geographical area.
Heat sources could be waste facilities or waste heat from large energy users like data centres or pharma companies.
It’s used to heat the homes of close to 80 million people across Europe.
An example of its use in Ireland includes the Tallaght District Heating Scheme which uses 100% waste heat from the nearby Amazon data centre - Ireland's first district heating project.
In 2024, the Government has approved the New Heat Bill, which is expected to pave the way for the growth of a district heating industry in Ireland.
District heating has been described by the Department of Climate, Energy and the Environment as "highly efficient and low carbon".
A 2022 study by the Sustainable Energy Authority of Ireland found that district heating has the potential to supply over 50% of heat nationally.
However, IrDEA says, less than 1% of Irish heat demand is currently being met by district heating networks.
The group estimates that it could offer annual savings of €632 for a standard Irish family.
"District heating uses energy that is generated right here in Ireland which means that no foreign war can ever interrupt its supply."
"It also works out at 40% cheaper than any other non-fossil fuel form of heating such as heat pumps," Ms O’Reilly said.
IrDEA has appealed to the government for a reduced VAT rate on the supply of heat through district heating networks from 13.5% to 9% where heat is supplied from renewable sources or waste heat recovery.
The lobby group said that the reduction would bring district heating into parity with the existing VAT rate for gas and electricity.
The construction of the first wave of district heating projects woul require and additional €100 million of capital grant support, on top of the initial €5 million, IrDEA said.
