For well over a decade, the UK’s approach to retrofit has been shaped by a simple hierarchy: improve the building fabric first, hopefully also factoring ventilation, and then replacing the fossil fuel heating systems. This ‘fabric first’ principle has guided investment decisions, funding models and programme design across the social housing sector and beyond.
This approach ultimately stems from new build. Here, despite what the lobby groups might argue, passively integrating low energy demand into new homes remains a good starting principle: there is nothing lower carbon than the energy you don’t use. Something that the Future Homes Standard goes a disappointingly small way to recognising.
The challenge of applying ‘fabric first’ to existing homes
The wholesale lift and shift of this ‘use less’ approach from new build homes to retrofitting homes is where the challenge really bites. And it bites due to the economics, not the science. Whilst big PLC housebuilders will argue, efficient surface:volume, integrating good insulation and more are comparatively cheap measures when homes are under construction. Doing so once the floor is down, the loft is full and the cavity is closed is a different matter.
Looking at retrofit through a national energy lens
To understand the economic differences, we need to zoom out from our individual homes and think of the holistic system for the UK. Firstly, let’s reiterate: the UK (and world) must migrate to zero carbon energy generation, and that energy will be transmitted to where we need it via electricity when it comes to homes and private cars.
We’re talking about some big numbers. The UK’s cars use around 250TWh of fossil fuels (road transport overall nearly twice that), and our homes use around 330TWh of fossil fuels, and they already draw around 95TWh of electricity.
You’d be forgiven for thinking this means we need to find 550TWh of new electricity generation each year to replace the fossil fuel demand that currently exists. However, thanks to the efficiency of electrical motors and heat pumps, we actually only need to increase by around 170TWh to cover the electrification of our cars and homes.
The economics of deep retrofit
It’s at this scale the economics become clear.
If we push all of our homes’ heating demand as low as we could — let’s say EnerPHit or even full PassivHaus levels of fabric performance and airtightness — we don’t materially change the other two-thirds of a low energy home’s usage: hot water demand and plug-in appliance energy.
We’re also not reducing the home heating energy demand to zero. Realistically, we might get the heating component down by around 70TWh of electricity, meaning our homes and cars would need around 100TWh of new generation to decarbonise.
Why generation may be cheaper than extreme efficiency
70TWh is around 25% more than the output of the UK’s current offshore wind farms (I did tell you they were big numbers!). Hence, by pushing our homes’ insulation to the limit, we’d avoid further offshore wind: that’s about £45–50 billion of avoided infrastructure costs for new zero-carbon generation.
It’s important to remember, this doesn’t mean we can avoid massive electricity grid upgrades. Agriculture, non-domestic buildings, industry, healthcare and much more all need to decarbonise, and most of this will be by electrification. Our total electricity generation output will need to rise significantly to approaching 700TWh annually — that’s an increase of a little over 400TWh from our current output, and spend of £200–250 billion to get there.
At this point, knocking £45–50 billion off that bill sounds like a good deal, right?
Upgrading homes to PassivHaus standard would come with a likely price tag in the region of around £1.5 trillion — or 30 times more expensive than the infrastructure enhancements. We could haggle with scale and innovation we might get it down to just 20 times more, but…
If that alone hasn’t convinced you, there’s a further kicker for UK government.
The reality of delivering decarbonisation at scale
Since 2000, the UK’s electricity network has added 145TWh of renewables output to our National Grid. In doing so, the electricity’s carbon intensity has plummeted. This has happened with relatively little fuss, public fury or bad newspaper headlines.
Meanwhile, the housing sector has meaningfully decarbonised 1–2% of homes. Achieving even this figure has led to outcry, press headlines and damning National Audit Office reports, not to mention being materially driven by public subsidy which tends to stop when grant falls away. There are concerns on supply chain, resident resistance and much beside.
The case for deeper retrofit
There is a counter-argument, of course.
If you consider the impacts of long term energy savings on residents, and we assume that high performance retrofit are also very healthy, beneficial environments, the scales tip. Lower bills would save around £23 billion/year to households, whilst genuinely healthy homes could save £1–2 billion/year on health care. Over a 50 year period, that’s £1.25 trillion. Throw in the savings on grid infrastructure upgrades and we’re getting close again…
Government has made its choice — what comes next?
Whatever we may personally have picked, UK government has made its choice: the Warm Homes Plan and forthcoming EPC (Energy Performance Certificate) reform lean heavily on the ‘do just enough to electrify’ approach. The longer term thinking of the counter argument hasn’t won, possibly because the evidence of healthy homes doesn’t tightly enough correlate to decarbonised homes. That’s perhaps the next battleground.
The future is less about extreme reduction, and more about how we can balance demands with supply in a network driven by renewables.
Whether or not we agree with the choice, the conversation now needs to shift. Government has picked the ‘just enough to electrify’ route. What matters now is far less that we squeeze the last drop of reduced demand out of the housing system, than that we can be flexible about when the demands we do make arrive at the electricity grid.
Hopefully we can make our homes healthier as we do that, too.