The ‘other’ housing crisis
Over three-quarters of homes were built before 1980, roughly when standards for insulation and energy performance first came in, and not even one-third have an energy efficiency considered acceptable by today’s standards. Worse news still, is that only a tiny fraction of them meet the highest energy performance rating, and even that level of efficiency doesn’t in fact meet our future needs.
Construction rates are low – 80% of the homes we will be using in 2050 already exist – meaning we can’t count on improved construction standards to fix this. The only way to make our homes fit for the future is to substantially upgrade something like 26 million homes over the next 30 years.
A tall order for sure, but also a major business opportunity.
What’s wrong with the homes we have?
Under the 2008 Climate Change Act, the UK has a legal obligation to cut carbon emissions by 80% by 2050. Homes are a big part of our emissions. Domestic properties in the UK account for almost one-third of total energy demand and one-fifth of carbon emissions. Over three-quarters of household energy demand is for space and water heating, mostly using gas.
The Committee on Climate Change argues that we must reduce carbon emissions from domestic heating and cooling to zero to keep part of the carbon budget for other parts of the economy.
One option would be to switch to electric heating using renewables. Unfortunately, that is not practical. Electricity demand is steady throughout the year, but heat demand in the winter is six times that in summer and six times the winter electricity demand. We have no plan for a future electricity grid that can deliver that much power.
Deep retrofit is the answer
We can’t rely on building new energy-efficient homes, as the turnover rate is too low, and we can’t rely on decarbonising the grid, as the demand is too high. The only option is a radical improvement in the energy efficiency of our existing housing stock. Minimising energy demand, and decarbonising what is left.
The sensible approach is a ‘deep retrofit’. A whole-house approach that takes a property from its current state to near net-zero energy demand in one step. It is sensible, but it is not happening.
Barriers to deep retrofit
A recent report by the Institution of Engineering and Technology, and Nottingham Trent University looked at the barriers to deep retrofit and some of the possible solutions. The main barriers were:
- lack of user demand
- lack of clear and consistent government policy that demands energy-efficient homes
- high costs, and the lack of industry capability and capacity to deliver in volume and at speed
- lack of finance
The report recommended four groups of actions:
- develop a national long-term strategic plan to meet the 2050 goals
- drive down costs and build capacity by investing in larger demonstrator projects
- develop a strong consumer proposition that will convince the end users, the householders, of the benefits.
- Make deep retrofit projects investable through innovative and flexible financing
The first step is to bring down costs by scaling up the number of deep retrofits.
Innovation and opportunity
Overcoming these barriers will require innovation.
We will need new materials and components. Better insulation, higher efficiency Photovoltaics (PV)/solar, better heat pumps, new types of doors and windows, and building control systems that work on the domestic scale.
We will need new design and construction techniques that cut costs and reduce time. Mass customised off-site manufactured components, like wall panels and roofs, that can be quickly installed without the use of scaffolding.
There are opportunities for new business models that will encourage building owners to invest. For example, Energiesprong has developed an economic model for deep retrofit based on a 30-year performance guarantee.
With every home both generating and using energy, we will need techniques that allow peer-to-peer energy trading on local smart-grids, as well as integration into regional and national energy grids.
Practical demonstrations, such as the award-winning pilot at Sneinton in Nottingham, show that we can near net-zero retrofits now, but there is still a need for more innovation.
Deep retrofit of the existing housing stock is a new and growing market opportunity both in the UK and internationally. Tackled the right way it will deliver better homes, a happier and healthier population, and will be more cost effective than incremental upgrades.
Dr Richard Miller is Associate Director of Future Cities Catapult and Founder of Miller-Klein Associates and will be hosting a presentation on Deep Retrofit at Future Cities Catapult on 26th February. You can register to attend that event here.