Housing renovation matters: a response to the 'Housing retrofits: a new start'

22 Nov 2016

A blog by Tina Fawcett, Gavin Killip and Marina Topouzi

Environmental Change Institute, University of Oxford

Housing retrofits: a new start, the recent report from the Energy Technologies Institute (ETI), envisages a limited role for energy efficiency renovation of housing in delivering the UK’s low carbon future. However, research from UKERC challenges this conclusion.

The ETI report details renovation of four houses, where the focus is solely on reducing losses of heat from the buildings. Increasing the efficiency of boilers, lights and appliances was not included, nor was generation or use of renewable energy, such as solar PV or biomass. The report concluded that energy efficiency renovation can be complex and expensive, and that improvements in supply chains and working practices are needed to reduce costs and impacts on householders.

This is not controversial and earlier UKERC research would support these insights. What is controversial is their leap from this very small sample, to concluding that UK-wide deep retrofits could cost more than rebuilding the whole housing stock, and that decarbonising heat must be a higher priority than retrofit.

ETI’s estimate of the average cost of deep retrofit is unrepresentative of mainstream estimates. It amounts to £90,000 per home, and is based on data from Innovate UK’s ‘Retrofit for the Future’ programme. Retrofit for the Future was deliberately expensive - focussing on installing and testing innovative technologies to evaluate the feasibility of achieving 80% carbon emissions reduction in individual homes using existing technology and existing industry practices. Its successor programme, Scaling up Retrofit, considered how to reduce costs - with targets such as 50% reductions costing no more than £15,000 per home. 

As ETI themselves point out, unit costs can be expected to reduce over time, and can be much reduced by scheduling energy-related work at ‘trigger points’, of which there are many in the general market for housing repair, maintenance and improvement. For example, cost and disruption can both be made marginal if the floor and walls of a kitchen are insulated as part of a kitchen re-fit, not as a separate job. The (unrealised) potential of this approach is of the order of £10bn per year.

UKERC’s research suggests both energy efficiency retrofit and low carbon heat supply are important and interlinked in delivering a lower carbon future. The future of UK residential space heating is very uncertain, and a diversified strategy with greater emphasis on energy efficiency would be prudent. One of the key future technologies is likely to be heat pumps, using low carbon electricity. UKERC research shows that a renovated housing stock with lower heating energy demands is a key component of making the switch to this technology. Heat pumps deliver heat at much lower temperatures than traditional gas boiler and radiator systems, and are not able to heat badly insulated, leaky homes to comfortable temperatures. Without an efficient housing stock, low carbon heating cannot be delivered affordably, if at all.

There is good evidence that energy efficiency works. Energy use in the UK residential sector has been falling by about 2% per year over the past ten years, largely due to improvements in the energy efficiency of the housing stock and its heating, lighting and appliances. A UKERC evidence review concluded that well established types of energy efficiency programmes can save significant amounts of energy. This contradicts the ETI conclusion that no more than £10bn of public and private money over the next ten years - equivalent to £35 per home per year - should be spent on energy efficient renovation. UKERC research shows that we need more investment and focus on low energy and low carbon renovation - not less.

Cost is not everything, however. Improvements are needed in supply chains, on-site practices and training before higher quality, less disruptive and less costly renovations can be achieved at scale. With this in mind UKERC has funded the project ‘Governance of Low-carbon Innovation for Domestic Energy Retrofit’ (GLIDER) [link to http://www.eci.ox.ac.uk/research/energy/glider.html.

In conclusion while there are some interesting insights in the ETI’s report, UKERC’s evidence challenges the assumption that energy efficient renovation is in competition with, or less important than, low carbon energy supply. In fact, both are vital - and energy efficiency can deliver cost-effective energy savings now, and into the future.