Earlier this year, elemental gathered together a group of home retrofit experts – with Peter Apps chairing – to discuss what can be done to encourage more households to decarbonise and improve energy efficiency.
Participants in the session:
- Tania Jennings – Net Zero Carbon Manager at Lewisham Council
- Rachael Owens – Co-director at National Retrofit Hub
- Meryem Brassington – Head of Environmental Sustainability, Propositions & Partnerships at Llloyds Banking Group
- Jon Vanstone – Chair at the National Home Improvement Council (NHIC)
- Emma Fletcher – Low Carbon Homes Director at Octopus Energy
- Tom Callow – Head of Public Affairs at Myenergi
- Avinash Rajan – Proposition Director at TrustMark
It is perhaps an ironic way to introduce a report of a roundtable discussion, but the purpose of the conversation convened by elemental was to work out how to stop talking. Everyone engaged in the difficult process of working out how to decarbonise Britain’s housing stock would probably agree that we have talked enough.
The question now is how we can deliver – how we can turn the ideas, innovations and finance which do exist into better insulated and non-fossil fuel dependent homes.
Like most conversations about how to get things done, the conversation begins with money.
There are some funding schemes available now, including the Social Housing Decarbonisation Fund. But having money in place is only half the battle, and the rules which surround use of the cash can be a hindrance as much as a help.
“It is exhausting that every piece of the funding that we get is so prescriptive,” says Tania Jennings, net zero carbon manager at Lewisham Council. She explains how the borough lost hundreds of thousands of pounds and months of work because planning delays pushed its project outside of the mandatory timescales for the scheme.
“We’re not alone in this. It’s this real challenge that you put in so much work to get funding and then there’s a really good chance that you will lose tonnes of it,” she says.
But money does talk, particularly in terms of consumer choice. While heat pump uptake remains slower than our targets would like, the recent 50% boost in heat pump grant to £7,500 in October made a major difference to appetite, says Emma Fletcher low carbon homes director at Octopus Energy.
“When the grant was £5,000 pounds for air source heat pumps, we had a little bit of uptake, but I’d call those people the enthusiasts,” she says. “When the grant changed to £7,500, the phone rang off the hook. The emails came in and people suddenly thought ‘hey, this is a really good opportunity’.”
But this is all government money, and if there was one message coming back loud and clear from both political parties as we headed towards the general election it is that there will not be much more of this to spread around.
Green finance
So where can we look to lead and fund the home decarbonisation work we need?
One answer might be the mortgage market.
“I think the role of mortgages is key, because if someone is taking a further advance they are potentially thinking about doing improvements to their home,” says Meryem Brassington, Head of Environmental Sustainability, Propositions and Partnerships at Lloyds Banking Group. “And we and many other banks, are already offering cash backs and rewards for mortgage holders if they are going to go on to do energy efficiency improvements works.”
She adds that the banking sector is being driven to report the carbon footprint of its loan books by regulators and will increasingly view energy efficiency and decarbonisation of the homes it mortgages as a necessary part of reducing this.
This taps into another potentially major source of funding. Every year, British households shell out billions investing in improvements to their homes. But while we can’t get enough of the new kitchens and bathrooms on the market, we are far less likely to invest in insulation and solar heating.
There is £40bn of home improvements spending every year in the UK. And that’s what we as a group should be tapping into,” says Avinash Rajan, proposition director at TrustMark.
“People will spend £30,000 on a kitchen, even though there is no financial payback calculation associated with that and very little impact on the property value. We need to stop using the word retrofit – because consumers don’t know what that means – and start talking about refurbishment and improvements. These are all aspirational terms.”
But building up this desire among consumers will not happen just because we want it to. “We’re trying to make people want something instead of just giving them something they want,” says Jon Vanstone, chair of the National Home Improvement Council (NHIC).
“When you ask people why they don’t want the work they talk about cost and disruption, and yet we replace 1.25 million kitchens a year with all the disruption that entails. The difference is that it is something we want.”
Incentivising green upgrades
So how can people be made to want energy efficiency upgrades and solar panels in the same way that they currently want other forms of home improvement?
“I think because we’ve got such an old housing stock in this country, we’ve got really low expectations of what our buildings should be doing for us,” says Emma Fletcher. “I have seen surveys of people who don’t want energy efficiency measures and the most common reason was that they already thought their home performed well enough. But many of those same people were still worried about their bills. So there is this disconnect between people’s expectations and what their homes can actually achieve.”
Tom Callow, head of public affairs at Myenergi, explains that sometimes one change – buying an electric car, for example – can be the start of a much bigger process.
“People don’t like the idea of fabric first because they don’t see the benefit, just the disruption,” he says. “But if they get a Tesla on the driveway, that creates a domino effect. Because the first thing that happens is that their electricity bill goes up – albeit offset by fuel savings. So then, they’re thinking about how they can generate their own electricity and they look to solar panels. Then if the solar panels work for them, they are looking at what else they can electrify, and a lot of people might think heat. Then to electrify heat, they start thinking about energy efficiency – so it all snowballs. But the process began from the electric car.”
All of these steps are positive, but so far we have only been talking about social housing (where some public money is available) or homeowners who have enough spare cash to invest in energy upgrades.
What about the many millions who are either struggling to get by month-to-month, renting from a private landlord or both?
For these residents, the risk of changing something which could result (even short term) in an increase in costs is a risk they will not want to take.
“I’ll put in a heat pump and I’m pretty sure it’s going to be absolutely fine. But if my bills do go up, I can take that,” says Rachael Owens, co-director at the National Retrofit Hub. “But for someone on the poverty line, the idea of taking even a small amount of risk is not acceptable.”
With private landlords, the incentives are also wrong. The tenant pays the energy bill – so would benefit from lower bills – but the landlord owns the property and would need to pay for the efficiency upgrades. One solution, which is a trend already underway as regulations over private landlords tighten, would be a professionalisation of what remains a largely amateur market.
But to get any of this work done – even if we do get the magic combination of public funding, home improvement cash, mortgage pressure and professional landlords – requires skills. And skills remain in quite short supply.
“With all the money in the world, you can’t actually buy a sector that’s ready to deliver,” adds Lewisham’s Tania Jennings.
“I think we’re a long way off having the skills that we need,” says Jon Vanstone. “I think in some of the funding models, they’re trying to do something that doesn’t actually match the industry.”
Opportunities for growth
Perhaps installers need to see the opportunity in gearing up to do some of this work, which will inevitably be a bigger slice of the pie than it is today – even if we don’t go as fast or as far as we need to.
“It’s like making your business resilient. So if you’ve got a project and you’re able to add work as well, so you’re already doing the kitchen extension, and for that same client, you could do insulation, that in itself is providing more work.
“The residential sector is going through a bit of a downturn at the moment. So getting into this space is providing that additional bit of resilience where you will always have a stream of work.”
“There will be those out there who want to grow and become the next Pimlico Plumbers in this space,” adds Avinash Rajan.
Jon Vanstone says there should be more focus on encouraging young people into these trades. “Whenever I speak in schools or at careers events, young people are really desperate for careers where they can make a difference and make a decent income without necessarily having to go to university,” he says. “We and the government should really be pushing this field as an opportunity in that regard.”
But he adds that the industry does need to change to attract the younger generation.
“Construction is number two for mental health suicides in the UK. And as a father, I’m not so keen on any one of my three daughters joining the industry, because I have seen and still see too much. I’ll always talk about the positives of the industry but it needs to change, and it’s not changing fast enough,” he adds.
Will technology make a difference in the future? Tania Jennings is positive about the idea of infrared wallpaper – especially for flats where heat pumps may be less of an option.
She says that as clean heating technology develops and adapts, the old orthodoxy of ‘fabric first’ may need to be adjusted.
“I’m kind of over fabric first, because we just don’t have the workforce to do fabric first on all 19,000 properties we own in Lewisham,” she says. “I think it needs to become a lot more about people first – you think about fabric first, but don’t necessarily do the fabric first if there is another more appropriate option.”
For Rachael Owens, a key step would be the development of a digital building logbook – a collection of information about the property which contains the roadmap of how it should be decarbonised.
“What you would want is information about the building’s actual fabric actual performance, and embedded within it a retrofit plan,” she says.
“So that you can say, okay, one of my children’s moved out or my boiler is broken, I just got a pay rise or a bonus at work. And you can see in the plan, okay, my next step is this and you can easily then start to action that in a way that makes sense.”
All of these ideas hold potential. But as we work towards 2050, and the hope that our fossil gas boilers will be left behind and new, clean technology have taken their place, we can only hope that the pace of action accelerates. If there is one thing all of our participants agree on, it is that the time for just talking is done.
The event was sponsored by myenergi.
