A new report from Savills has found that improving energy efficiency within the housing sector will come at a “huge cost”.
In a report published earlier this week on the decarbonisation of social housing stock, Savills estimates the sector needs an investment of £3.5bn per year to achieve net-zero carbon.
However, although the investment required may be significant, Savills says there are a number of “positive long-term implications”, not least saving tenants money and providing benefits to landlords.
The report adds that, supported by the government’s 10-point plan, improving energy efficiency of existing homes can form a key part of the UK’s economic recovery, generating thousands of green jobs for the sector and the opportunity to train residents.
Heating
The report notes that, although social-rented homes are on average the most energy-efficient tenure in the UK – with 60% of housing association properties rated between EPC A and C – there is still a big “challenge” around tackling heat efficiency.
Citing estimates from National Energy Efficiency Data Framework 2020 report, the median reduction in gas consumption resulting from improvement measures in 2017 ranged from 4.2% for loft insulation to 12.6% for solar technology and 18.9% for solid wall insulation.
The government is also promoting the use of heat pumps, which again, could improve fuel efficiency and help reduce carbon emissions.
Policy
In 2019, the UK government committed to achieving net-zero carbon emissions by 2050. Yet, Savills says providers are concerned about how this can be achieved within the housing sector, with many seeing a lack of funding and insufficient policy guidance as signficant roadblocks.
The report says that the government’s 10-point plan and £2bn Green Homes Grant scheme – which was launched in September this year and offers landlords and private homeowners up to £10,000 to retrofit their property – will help, but adds: “Arguably, the government could provide longer-term support to encourage widespread retrofitting programmes.”
Europe
Savills’ report goes on to highlight the ways in which UK providers can learn from the “increasingly ambitious” decarbonisation programmes being implemented across Europe.
It cites the use of the Energiesprong model in the Netherlands, which involves wrapping houses with pre-fabricated, insulated panel facades, fitting insulated roofs with solar panels, and installing smart heating and cooling systems; and the Powerhouse standard in Norway, which guarantees that buildings will produce more energy over their lifetime than they will use through construction, operating, and demolition.
The report also points to funding models used in the likes of France and Germany. France, for example, has allocated a third of its €100 billion post-COVID recovery package to fund a green recovery plan.
Germany, on the other hand, is funding a third of retrofits through KfW, a government-owned bank. KfW offers grants, subsidies, and discounted loans to homeowners, social landlords, and local government to improve the energy efficiency of homes.
Citing such examples and more, Savills report concludes that there are lessons to be learnt from what the UK’s European counterparts are doing to help drive the decarbonisation of homes.
Conclusions
The report concludes with a reminder of the short time-frame in which to achieve both a zero-carbon sector and economy.
It reads: “With just 30 years to 2050, this marks a key point for the housing sector to reposition itself, evaluate current stock profiles and consider long-term strategy.
“Addressing the energy performance of existing stock requires a variety of different approaches and scaling up of existing initiatives as well as more centralised support.
“Looking ahead, there are significant challenges for the sector many of which actually present as opportunities.”
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