Whether we like it or not, most things in life usually come down to money, and I suspect retrofitting will be no different.
During SDL Surveying’s recent Sustainable Futures Conference, we heard from several experts in the field of energy efficiency and retrofitting, and one thing became clear: it will not be cheap.
While we might be in a state of uncertainty regarding when – or if – legislation will come back into play for property owners to improve their energy efficiency, I think we would be fooling ourselves if we were to think this isn’t likely at some point in the near future.
As it stands, when it comes to retrofitting, the onus and cost, in the majority of cases, rests wholly with the property owner. While the Government might hope landlords and homeowners are incentivised to reach net zero out of their own pocket, I suspect this is wishful, if not unrealistic, thinking.
As our understanding and knowledge of retrofitting tools and technology increases, there are also increasing worries that we may have significantly underestimated the true cost of what retrofitting will entail.
One of the speakers at our conference, Professor Lucelia Rodrigues from the University of Nottingham, outlined some of the insights from the University’s Carbon Neutral Housing Report and why they estimate the true cost of retrofitting to be much higher than previous government predictions.
Nottingham is pushing to become the UK’s first carbon-neutral city and given it has the sixth highest rate of fuel poverty among all English local authorities, it seems like a good place to start.
As part of the study, which was funded by the UK government, it analysed the cost of deep retrofit, – retrofitting a home to the highest levels of energy efficiency. Professor Lucelia provided a very detailed breakdown of the makeup and fabric of the housing stock in Nottingham – 61.2% of which carries an Energy Performance Certificate (EPC) below C.
Her analysis revealed the minimum cost of retrofitting a property would be £38,000, reaching as high as £114,000 and averaging £69,000. If you are thinking this figure sounds much higher than previously quoted government figures, you would be right.
The government estimates that £30k per household should be adequate to fully retrofit a home, with the average cost to improve an EPC from D-G at C £7,737. Given Lucelia’s projections, it seems increasingly unlikely this sum of money is going to come from homeowners’ pockets.
From January, we will see the energy price cap increase again, this time by 5%, which will mean an increase to £1,928 for an average household paying by direct debit for dual fuel. This equates to a rise of £94 over the course of a year – around £7.83 a month, according to Ofgem.
While unwelcome, I don’t think it is going to incentivise homeowners to carry out costly energy efficiency measures. Wealthier homeowners who might be able to afford retrofitting are unlikely to invest in energy efficiency measures on the back of an extra £7.83 a month. Those who will struggle to meet the increase are even less likely to consider retrofitting, unless, of course, the work could be carried out for free – ideally through some form of interest-free government loan or grant – and they could see energy efficiency savings this way.
In recent years, we’ve seen the government launch and repackage various home and eco grants but they have not always been as successful as they could have been when it comes to encouraging homeowners to actually carry out the changes. This is partly because of complications around the application process and eligibility, or not covering the whole cost of the work.
On a more positive note however, there was a general consensus at our Sustainable Futures Conference that as time goes on, like a lot of new technology, once energy efficiency technology and resources become more widespread and widely used, the cost of retrofitting should become cheaper.
At SDL, we’re investing to provide retrofit and energy reporting services to lenders, social housing landlords, and homeowners; having trained over 100 domestic energy assessors so far.
While some might argue the prospect of retrofit funding coming from the government at the moment seems thin, there is an economic argument to be made that such a strategy could potentially benefit the economy in the longer term through job creation and economic growth.
There is also the school of thought that says our government has the ability to always find money when it needs to – and arguably, what is more important than the climate emergency?
Simon Jackson is managing director of SDL Surveying
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