Retrofit and Net Zero

Retrofit sits firmly on the agenda for local authorities, some 300 of whom have declared a climate emergency, says Head of Retrofit Will Burkitt. Over half have pledged to be net zero carbon by 2030, but, with only seven years to go, they face tough challenges ahead.

The UK has the oldest housing stock in Europe, and the cost of retrofitting all social homes is estimated at £104bn.^{[i] [ii]} Factor in skills/materials shortages and rampant inflation, and costs could be much higher. Achieving this at pace is a huge undertaking, requiring unprecedented industry collaboration, innovative-funding approaches, inclusive community engagement and rapid upscaling of supply-chain skills and labour.

This is pertinent because coming up even sooner than the net zero requirements, is the 2028 minimum EPC ‘C’ rating requirement, bringing retrofit obligations for social housing asset owners and private landlords.

Better social outcomes

Retrofit is not just about decarbonizing to fight climate change - for most tenants that is just the cherry on the top. Retrofit is also about better social outcomes. It's an opportunity to address inequalities, reduce fuel poverty, improve health, wellbeing and living standards, support thriving communities, create energy resilience and level up across the UK.

Improving homes typically focuses on building fabric improvements, energy efficiency and decarbonization of heat. But the diversity of our housing types, regional variations, and history of many buildings makes for a complex picture where no one size fits all. Older homes can be ‘hard to treat,’ and the government annual fuel poverty statistics show that those occupants are more likely to experience fuel poverty.^{[iii] [iv]}

Sizeable market

Add homeowners and private landlords into the mix, and there is a sizeable market waiting to be serviced; between now and 2050 it is estimated at over £500bn for homes alone.[v] Equity analysis predicts that renewable and low-carbon technologies could support 1.38m jobs by 2050, with 600,000 of these materialising in this decade thanks to home retrofits and energy efficiency installations.^[vi]

Skills shortages and insufficient funding have undermined the immature retrofit sector, which has led to a lack of confidence that has held back investment. There are consistent calls for the Government to provide longer-term funding certainty for specific net zero policies, allowing clients to plan retrofit work with supply chains over longer time periods. In turn, supply chains want confidence that demand will exist, pipeline visibility, and longer-term partnering approaches that encourage investment, continuous improvement, and shared learnings.

Local authority needs

Local authorities feel ill-equipped too. When the Sustainable Housing Action Partnership (SHAP) asked 24 authorities about retrofit enablers, responses included:

• Strategic leadership from council higher-ups
• Sharing technical knowledge across local/regional authorities, collaborating rather than competing
• Dedicated resources for funding bids
• Developing relationships with local contractors to nurture trust and confidence
• Creating internal and external groups, linking officers, elected members, residents, businesses and training organizations.^[vii]

At AtkinsRéalis, our work with local authorities and social housing providers highlights further blockers: lack of knowledge of existing portfolios; concern about spending unwisely; uncertainty on achieving no-regret interventions in the optimum sequence; high operating costs for heat pumps, long lead-in times for National Grid connections and a lack of grid capacity to purchase excess energy, and, of course, funding constraints and the need to generate income streams to offset the cost of capital.

How we can help

AktinsRéalis is a gold member of the UK Green Building Council and a member of the Retrofit Academy. We’re upskilling at scale and pace to meet demand. Collaborating with our supply chain partners, we provide an end-to-end solutions to support clients on their retrofit journey. Our Decarbonomics platform provides a data-driven approach to cost-effective optimised net zero roadmaps. Our solution is enhanced through funding advisory, green revenue advisory and full multidisciplinary consultancy services, including all PAS 2035 roles.

^{[i] BRE Trust (2020) The Housing Stock of the United Kingdom}

^{[ii] Heath, Lucie (23 November 2020) Inside Housing - Insight - The cost of net zero: social landlords’ decarbonisation plans revealed}

^{[iii] Houghton, Ed (10 January 2023) Considering people, not just properties: when it comes to decarbonisation, what makes a home 'hard to treat'? DG Cities and the Bartlett School of Architecture, UCL}

^{[iv] Department for Business, Energy and Industrial Strategy (2022) Annual fuel poverty statistics report: 2022}

^{[v] Lowe, Tom (4 November 2021) Cost of decarbonising all UK homes could be £200bn cheaper than other estimates, says Savills | News | Building}

^{[vi] Ecuity (2020) ‘Local green jobs – accelerating a sustainable economic recovery’,}

^{[vii] LGA webinar (July 2022) www.local.gov.uk/blog-building-housing-retrofit-skills-webinar-12-july-2022}

Will Burkitt is responsible for leading the Retrofit Sector for our UK business, working with regional teams to offer an industry-leading service, including innovative solutions and technologies which help our clients to use less energy, create green energy resilience, generate green income, cut carbon emissions, reduce operating costs, protect asset values, improve heath and wellbeing and deliver positive social outcomes.