We assess the subsidy for the installation of biomass boilers and wood gasification boilers under the Greener Homes Scheme in Ireland. We find that the (implicit) subsidy per tonne of carbon dioxide avoided varies hugely across households. The current policy costs 17 % too much for the emissions avoided, or avoids 17 % too little for the money spent. The subsidy reduces net social gain (including environmental benefits but excluding producer surplus) by 42 %. © 2012 The Author(s).