Why Retrofit?

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Part one: Why Retrofit?

Some background first

• The Climate Change Act 2008 sets a legal target for the UK to reduce greenhouse gas emissions by at least 80% of the 1990 baseline by 2050. In June 2019, secondary legislation was passed that extended that target to 100% (“Net Zero”).
• The pathway to 2050 is steered by a series of five-year carbon budgets set with the advice of the independent Climate Change Committee. The UK is currently set to miss the fourth (2023 to 2027), fifth (2028 to 2032) and sixth (2033 to 2037) carbon budgets. Crucially, these budgets were set against the previous target of an 80% reduction in emissions by 2050, with the new Net Zero target of 100% the need to accelerate progress is obvious.
• The Government published its Clean Growth Strategy in October 2017. This included an ambition to upgrade all homes to Energy Performance Certificate (EPC) Band C by 2035, where “cost effective, affordable and practical”, with an earlier goal for rented homes of 2030. This is in addition to the Government’s statutory target set out in the Fuel Poverty (England) Regulations 2014 to improve the homes of fuel poor households, “as far as reasonably practicable”, to EPC Band C by 2030.

The built environment spotlighted

• All parts of the UK economy must contribute to reducing greenhouse gas emissions, including the built environment.
• The UK has a relative old building stock with 39% of non-residential and 50% of residential building being built before 1970 and when thermal regulations became widely introduced in the UK. Currently it is estimated that only 30% of non-residential and 29% of residential building were built in the 21st century.
• 86% of homes in the UK use natural gas in England and generally these are still the dominant domestic heating system in the UK. The UK has about 30 million buildings, which are responsible for roughly 30% of UK emissions. The majority of buildings still rely on burning high-carbon fossil fuels for heating, hot water and cooking, and have low thermal efficiency which means that much of the heat that is generated is wasted. Less than 5% of energy used for heating buildings derives from low-carbon sources.
• Addressing the energy efficiency of the UK’s housing stock will be key to achieving the most cost-effective pathway to Net Zero by 2050. This is because:
  • homes account for approximately 77% of buildings’ heating emissions footprint,
  • the UK’s housing stock still remains as one of the most energy inefficient in the whole of Europe, and
  • it is estimated that by 2050 roughly 80-85% of today’s homes will still be standing.

Main reasons for retrofitting

• When looking at the energy demand, over three-quarters of the demand is for space and hot water heating. As a result, the only viable strategy is to decarbonise or reduce heating demand.
• Some of the available future carbon budget must be reserved for sectors of the economy that will be very difficult to decarbonise, and therefore carbon emissions from heat demand in buildings must be reduced to zero.
• If the heat demand stays at the same level, it will not be possible to switch to solely low-carbon electric heating at the required rate – particularly as there will be wider calls for electricity use (for example increased deployment of electric vehicles will be demanding more electricity at the same time). Heat demand must be reduced, and this is most effectively achieved by increasing the thermal efficiency of housing stock.

Not just retrofit but deep retrofit

• Although new homes could be built with very high energy efficiency, current standards are not sufficient to achieve the 2050 objectives and the rate of house building in the UK is low. As mentioned above, 80% of the homes we will be living in by 2050 should have already been built. A nationwide programme of deep retrofits of the existing stock is the only way to deliver the required carbon savings.
• Deep retrofit is an integrated and whole house approach to upgrading the energy efficiency of a dwelling that brings it to the standard required to meet 2050 targets in one step, rather than as a series of single and incremental interventions carried out over a long time.
• While it is accepted that large-scale retrofitting of the existing housing stock is required, it is not happening fast enough. A report by the Institution of Engineering and Technology (IET) and Nottingham Trent University, set out that 26 million retrofits will be needed between now and 2050. This is effectively every home in the country, at a rate of around 1.5 homes every minute.
• In fact, improving the current the UK’s housing stock would mean retrofitting an estimated one million homes every single year over the next thirty years, which is over five times more homes that are currently being built.

Additional considerations for retrofitting

• Deep retrofit of the existing housing stock will bring benefits beyond meeting the climate change and energy efficiency targets.
• Currently, 31 million people live in poorly insulated properties facing higher energy bills and cold/draughty conditions. Of these homes 13 million have the potential to be upgraded to Energy Performance Certificate (EPC) C, unlocking almost £40 billion in cumulative economic and social benefits. Upgrading these homes would save consumers roughly £24 billion on their energy bills by 2030. Upgrading these homes would be most efficient in regions with the most inefficient homes, such as the £5 billion in benefits for the North West.
• Poor-quality housing leads to poor health outcomes. The NHS spends roughly £1.4 billion per annum treating individuals for illnesses which have resulted from bad housing with at a minimum £145 million of these costs arising from cold homes at a time where roughly 700,000 homes are deemed as excessively cold. Therefore, retrofitting homes to become warner could prevent many of the 35,000 excess winter deaths recorded annually. In addition to this, retrofitting homes could reduce the burden on social care costs with between £1,7000 and £4,5000 per person being spend on adaptation and home improvements per annum.
• Quality and availability of housing has a direct impact on productivity and economic growth. Housing must be integrated into local infrastructure and be available at sufficient quality and cost to bring workers into the local economy. In the longer term, poor-quality housing has been shown to affect educational attainment, reducing the locally generated pool of talent.

Sources Used in this Publication:

• https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1044598/6.7408_BEIS_Clean_Heat_Heat___Buildings_Strategy_Stage_2_v5_WEB.pdf
• https://ukgbc.s3.eu-west-2.amazonaws.com/wp content/uploads/2021/02/05144353/Retrofit-Playbook.pdf
• https://ukgbc.s3.eu-west-2.amazonaws.com/wp-content/uploads/2021/02/05144353/Retrofit-Playbook.pdf
• https://www.rics.org/news-insights/rics-policy-report-retrofitting-to-decarbonise-uk-existing-housing-stock
• https://www.theiet.org/media/8758/retrofit.pdf
• https://www.theiet.org/media/8758/retrofit.pdf
• https://www.ukgbc.org/news/the-importance-of-retrofitting-in-advancing-net-zero/
• https://www.rics.org/news-insights/time-to-retrofit-decarbonising-uk-buildings-and-economic-recovery
• https://www.theccc.org.uk/about/our-expertise/advice-on-reducing-the-uks-emissions/
• https://www.citizensadvice.org.uk/wales/about-us/our-work/policy/policy-research-topics/energy-policy-research-and-consultation-responses/energy-policy-research/home-advantage-unlocking-the-benefits-of-energy-efficiency/?utm_source=linkedin&utm_campaign=low_carbon_futures&utm_medium=social&utm_source=linkedin&utm_medium=social&utm_campaign=BAU_ER

This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any of the issues raised in this article, please contact us today by telephone or email enquiries@sharpepritchard.co.uk.