Rising to the challenge of housing retrofit

While household energy prices go through the roof, the UK is also seeking to reduce carbon emissions and level up the economy. The case for thermally efficient, low-energy homes has never been stronger, writes Bernadette Ballantyne, nor has demand.

This article features in issue two of Connected Places magazine.

Joan Warburton loves her new windows. Installed as part of a low-carbon, net-zero energy housing retrofit project transforming homes in the city of Nottingham, Joan’s new double glazing is part of a package of measures that have reduced carbon emissions, lowered energy bills and made homes warmer and more comfortable. Embedded into a new thermally efficient wall system, clad over the existing cold concrete structure, the new windows give Joan a much better view out into the street from her kitchen. They were part of a wide variety of measures that, as well as improving insulation, involved installing photovoltaic solar panels, and fitting communal ground source heat pumps.

These draughty terrace properties in Sneinton, a suburb very close to Nottingham’s city centre, were some of the first in the UK to be upgraded as part of a growing movement for retrofitting properties to become net-zero energy. Delivered by Nottingham City Homes with housing solutions provider Melius Homes and architect Studio Partington, the project pioneered a model called Energiesprong, which was developed in the Netherlands and is spreading across Europe.

Under the Dutch Climate Act, the Netherlands has committed to cutting greenhouse gas emissions to become a net-zero emitter of carbon by 2050. This echoes the UK’s own commitment legislated for under the Climate Change Act in 2019.

Achieving this requires a complete transformation across all sectors of the economy including domestic properties. In the UK, the Climate Change Committee (CCC) has worked extensively to explore exactly how we get to a net-zero emissions scenario. “We will not meet our targets for emissions reduction without near complete decarbonisation of the housing stock,” it advised in its 2019 report UK Housing: Fit for the Future.

Data from the Department for Business, Energy and Industrial Strategy (BEIS) shows that this is only getting worse. In its latest analysis of UK greenhouse gas emissions, it found that despite effects of the pandemic meaning that overall emissions in the UK fell 9.5 percent between 2019 and 2020, the residential sector saw a 1% increase in its carbon footprint. The UK’s 29 million homes are responsible for at least 16% of all emissions. “UK homes are not fit for the future,” warned the CCC.

This is because the UK has some of the oldest housing stock in Europe, built at times when quantity mattered more than quality, explains Lucelia Rodrigues, Professor of Sustainable and Resilient Cities in the Faculty of Engineering at the University of Nottingham. She is currently developing a housing retrofit roadmap for the City of Nottingham funded by the Government’s Community Renewal Fund. “Most of our homes were built before the introduction of comfort and energy performance standards and are far from addressing future needs. Consequently, most of our homes are cold in the winter months and vulnerable to overheating in the summer months.”

Future needs include adapting to our warmer planet and protecting residents from volatility in global energy markets. “Let’s not forget the impact of raising energy costs – retrofitted homes are cheap to run in winter and summer,” says Professor Rodrigues.

We then should look at electrifying our active systems. Removing gas-powered heating will reduce circa 40 percent of a typical homes’ carbon emissions today.

Opportunity knocks

Despite the urgency of the challenge, progress on retrofitting homes has been slow to take off, but there are reasons to be optimistic. Not least because the technical solutions already exist. Professor Rodrigues splits the home retrofit approach into three categories: rationalisation, electrification and smarter systems. “Rationalisation should come first,” she says, echoing findings from across the industry that have found reducing the need for energy should be the priority and involves taking a fabric-first view of the home. This means improving the thermal performance of a home’s envelope through wall, floor and roof insulation, better windows, draught-proofing strategies, and summer shading. Homeowners can also look to improve the efficiency of – or even remove the need for – active systems, such as heating and cooling as well as looking at behavioural change. “We then should look at electrifying our active systems. Removing gas-powered heating will reduce circa 40% of a typical home’s carbon emissions today,” says Professor Rodrigues.

Residential heat pump

Taking these steps then opens the door to investment in local renewables and batteries, which can be done individually or at community scale. “Such as the one we developed at the Trent Basin project in Nottingham,” says Professor Rodrigues, pointing to the scheme where 76 homes have followed the fabric-first approach and used locally generated renewable energy with batteries for storage. The homes also used intelligent control systems to optimise energy generation and storage, which is critical for future retrofit. “Through smart management, we can ensure we get the best carbon and financial returns for our investments,” she says.

Taking a community approach is another lesson emerging from successful retrofit and lies at the heart of the Energiesprong model highlighted earlier. One of the most important aspects of this approach is that it is designed for local adaptation, wherever that may be. Although it began as a government research project in the Netherlands looking into how to lower carbon emissions, it is now being used in Germany, France, Italy, the UK and the US.

Energiesprong quite literally means energy leap and its success relies on four pillars. “So first is the demand side, second we have the supply side, then we have the finance, and finally we have policy, and you need these four things to work together to really have a working model,” explains Lette de Wit from Energiesprong.

Essentially, tenants are asked to redirect the money that they would usually spend on energy bills to the housing provider, which in turn uses this income stream, along with its predicted maintenance spending to pay for a retrofit programme. This includes thermal insulation, and an energy module, which is often based on solar PV and a non-gas-based heating system, such as heat pumps. The specific technologies will depend on the local market maturity and availability. Importantly, this arrangement has the potential to protect tenants from volatile energy prices. Parties enter into long-term guarantees to make the projects financially viable, and residents are included right from the start so that they become part of the project.

In the UK, the results have been so good that Nottingham has extended its pilot to a further 155 homes, and schemes have been launched in London and Essex.

What we’re trying to do is understand, at scale, what the challenge is, and look at it in different cities or regions to understand what the differences are.

Market acceleration

5For any retrofit model to work, the right policy environment is critical. One of the reasons that the take-up has been slow is that policy tools such as The Green Deal failed to incentivise homeowners to upgrade their properties. But as the net-zero deadline creeps closer, new initiatives are being launched across government departments, from the Social Housing Decarbonisation Fund to the Heat and Buildings Strategy with its £450m boiler upgrade scheme. This provides £5,000 grants towards replacing gas boilers with low-carbon systems, such as heat pumps.

Yet this still has not been enough to boost the market and it has been criticised for not covering the cost adequately and failing to appreciate that installing heat pumps is not effective if a home is poorly insulated.

Rainwater harvesting

However, new legislation currently making its way through the House of Commons is expected to catalyse the industry. The Minimum Energy Performance of Buildings (No. 2) Bill requires all domestic properties to have an energy performance certificate (EPC) rating of A, B or C by 2035. For some properties, the requirements will hit sooner with private landlords needing to meet the C rating by 2025.

All homes sold or rented since 2007 have had to have an EPC, which ranks performance from A being maximum efficiency down to G. Around two thirds of properties in the UK are rated D or below.

To gain a more local understanding of the scale of the retrofit challenge, Atkins has created a digital dashboard that breaks down the cost of required retrofit measures. It also works out their potential carbon savings to help housing authorities weigh up interventions. “What we’re trying to do is understand at scale, what the challenge is, and look at it in different cities or regions to understand, at scale, what the differences are,” says Ruth Hynes, Senior Design Researcher at Atkins.

As part of its work on integrated net-zero planning the Connected Places Catapult has also developed a prototype tool to make it easier for homeowners to navigate retrofit options. It is a speculative vision for a new service-oriented model for estimating the carbon impact of a home, as well as assessing retrofit options, connecting with peers, supply chains and grants, and monitoring the impact of retrofit after works have been carried out.

It could also support local authorities in monitoring the energy efficiency of neighbourhoods and their journey to net zero, whilst building a retrofit evidence base to encourage consumer demand and identify early adopters. The evidence of consumer demand could then stimulate growth in the retrofit supply chain.

Only around 40% of properties in England are currently rated C or above but this varies enormously between cities. Measures required for a city such as Glasgow, where the majority of properties are flats, will be different from Manchester, where more people live in terraced houses.

Ambitious plans in London mean that the 32 boroughs have already confirmed that they will look to raise properties to an EPC rating of B by 2030. According to Atkins’ digital dashboard, this will cost between £26,428 and £36,763 per property. For Camden alone to ensure that all 111,480 properties have an EPC rating of B would cost £3.4bn.

It will cost £330bn to bring all UK properties up to the EPC band C. To achieve this, the industry is calling for a plan.

Towards a national retrofit strategy

At a national level, property consultant Savills estimates that it will cost £330bn to bring all UK properties up to the EPC band C. To achieve this, the industry is calling for a plan.

“What the construction industry needs, particularly, small local builders, is a comprehensive long-term strategy for retrofitting the nations homes,” says Brian Berry, Chief Executive of the Federation of Master Builders (FMB). “This will give the market confidence to train up new staff with green skills and provide consumers with an understanding of the benefits of energy efficiency improvements.”

In June 2021, the FMB as part of the Construction Leadership Council, published a National Retrofit Strategy that aims to create a clear pipeline of work for the next 20 years. “This would boost small local builders, who would upskill existing workforces, but also take on new staff.

This would uplift local economies and create desperately needed vocational training routes into future proofed ‘green’ jobs,” says Brian.

Another unanswered question remains around financial support. The retrofit models that have so far proved successful have all benefitted from grant support from a wide array of funding sources but more is needed to support this industry in its early stages. Projects also need to be carried out at scale to be cost effective and attract supply chain resources. Local authority and social housing providers are therefore expected to be the first to implement home retrofit programmes and access financial arrangements which are currently out of reach for private landlords.

Yet despite all of these challenges, it is clear that momentum is building for the development of a low-carbon, low-energy home retrofit programme in the UK. The technology works, standards have been developed, policy is evolving and training of retrofit professionals is underway (see feature page 38). Experiences across the UK and Europe are demonstrating the importance of models that unite tenants, owners and the supply chain.

As energy prices climb so is demand for thermally efficient, low-carbon, low-energy homes. With a little more collaboration and a long-term view, across government and industry perhaps the financial and supply chain gaps could be closed and the £330bn investment programme could really take off.

Solar panels on housing in Nottingham

This article features in issue two of Connected Places magazine.