Mears Group PLC Decarbonisation Full Report

Mears Group PLC Decarbonisation Report

Warmer, healthier homes –domestic retrofit, a net zero opportunity

Warmer, healthier homes – domestic retrofit, a net zero opportunity Foreword

Our position as one of the UK’s leading and most trusted providers of specialist housing services, gives us a unique perspective on the challenge we face as a country to reach our net zero goals. With housing being a major contributor to the UK’s carbon outputs, there is a huge opportunity here to make a real difference. We recognise not only our responsibility, but also that to effect meaningful change we need to act now.

At the heart of our mission lies a deep commitment to social equity and environmental stewardship. We understand that the transition to a low-carbon future must be inclusive for it to have an impact. This report looks at the key themes in the net zero opportunity, with our approach prioritising affordability and accessibility, and is designed to empower residents to live in healthier, more sustainable homes.

We recognise that to do this we need to work together. By forging partnerships with government agencies, industry leaders, and community organisations, we can amplify our impact and drive systemic change at pace and at scale.

By working collaboratively, we can build a future where everyone has access to safe, affordable housing that goes some way to achieving our net zero ambitions as a country. As we embark on this journey towards decarbonisation, we are committed to playing our part and we’re calling for others to do the same.

Lucas Critchley Chief Executive Officer

At the heart of our mission lies a deep commitment to social equity and environmental stewardship. We understand that the transition to a low-carbon future must be inclusive for it to have an impact.

To deliver retrofit we are going to need good quality data, a skilled workforce, long-term funding, innovation in technology, clever design and well thought through engagement and communication strategies.

Domestic Retrofit (Retrofit) refers to the process of making improvements to a home so that it becomes more energy efficient and operates with lower emissions. Given the number of homes across the UK which will need some form of retrofit before 2050, it will be a challenge to deliver, but does present a big opportunity to the UK.

There is a lot of work that needs to happen. There are c29 million buildings currently in existence that will still be in operation in 2050 and will need a form of retrofit to make them energy efficient and compliant for net zero targets.

The UK is committed to reaching net zero by 2050. This means that the total greenhouse gas emissions would be equal to the emissions removed from the atmosphere, with the aim of limiting global warming and resultant climate change. *

The UK government has signed this commitment into law and Wales has set their ambitions in the Environment (Wales) Act 2016 to reduce their carbon emissions to net zero by 2050. **

The Scottish Government has set climate change ambitions to become a net zero greenhouse gas emitting nation by 2045, with interim targets of 75% by 2030 and 90% by 2040, against 1990 baseline levels. ***

This provides a real economic opportunity and the opportunity to add a lot of social value into UK communities over the coming decades. Time though is an issue. Yes, 2050 is more than a quarter of a century away but given the number of properties that will be involved (a run rate of more than a million a year) we are not able to delay any response.

According to the Energy Systems Catapult **** heat currently accounts for approximately 37% of

all UK emissions and space heating in UK homes makes up 17% of these emissions. The National Housing Federation ***** calculates that social housing contributes 10% of domestic use of fossil fuels. These numbers show why it is so important to decarbonise heat for the UK to reach its net zero target.

With this understanding, how best are we going to make our homes energy efficient, warmer, healthier, better ventilated, and better performing for the environment? The answer is through extensive retrofit activity.

To deliver retrofit we are going to need good quality data, a skilled workforce, long-term funding, innovation in technology, clever design and well thought through engagement and communication strategies.

What we might need more than anything else because of the volume of work involved is a collaborative and partnership approach. We must view retrofit as not a race but a longterm programme of improvements. It will focus activity for the next quarter of a century and therefore will need the support of long-term policy and funding certainty.

But we should not look at retrofit as simply a physical and technical exercise that happens to the property. Retrofit is personal. It is going to have a big impact on people’s lives and how they live those lives. We should recognise this as we look to engage them in the process of upgrading their homes. This is change on a large scale. We need to take a resident first approach. We don’t retrofit a house, we retrofit a home. Therefore, we need to be focused on why increasing the energy efficiency of that home is so beneficial to the resident, both from an economic and health perspective.

The social value in the improvement of communities through economic regeneration

coupled with a healthier environment with better air quality should be used to not only engage people in the retrofit process with their homes, but it should also be used to encourage people to make retrofit a career of choice.

Retrofit should not be looked at in isolation from wider housing issues. It is not simply something else to do. With a holistic approach it can be the foundation and catalyst to tackle a lot of other housing issues such as damp and mould, fuel poverty, building and fire safety, compliance and repairs and maintenance. It can be a driver for true integrated asset management in housing. Retrofit is very important. It is important to the sector, and it is important to the UK’s aspiration of meeting net zero by 2050. It is something we have to do. It is about how we do it that will determine the true value of its success.

* House of Commons Library https://commonslibrary. parliament.uk/research-briefings/cbp-9888/

** The Welsh Government – Climate Change https://www.climateaction.gov.wales/climatechange/#:~:text=In%20Wales%2C%20we%20are%20 legally,plan%20is%20Net%20Zero%20Wales.

** The Scottish Government – Open Government action plan 2021 to 2025 – commitment 4: climate change https://www.gov.scot/publications/opengovernment-action-plan-2021-to-2025-commitment4-climate-change/#:~:text=The%20Scottish%20 Government%20has%20set,2040%2C%20 against%201990%20baseline%20levels.

**** Energy Systems Catapult – A guide to the decarbonisation of heat in the UK https://es.catapult. org.uk/guide/decarbonisation-heat/#:~:text=How%20 much%20does%20heating%20contribute,amount%20 of%20cooling)%20%3D%2017%25

***** National Housing Federation – Decarbonisation: a guide for housing associations https://www.housing. org.uk/globalassets/files/climate-and-sustainability-energy-crisis/07085855-9cf8-456c-80999506a6839b5d.pdfR

At Mears we are one of the UK’s leading housing and care providers. We see ourselves as partners for purpose as we provide and manage 17,000 homes for local and central government and are responsible for keeping 750,000 social homes in good repair.

We have a good understanding of the importance of decarbonising the heat in our homes to help the UK meet its net zero targets. We have been working on this for a number of years, but as the issue of retrofit becomes more visible to many, we wanted to take the opportunity to reflect and look ahead to see what we believe is needed to deliver retrofit effectively.

This report looks at the wider systems decarbonisation challenge and the dual challenge that housing itself faces. That is the construction of new homes that are low carbon in both construction and operation, but our main focus is on the work that needs to be done to existing housing stock to make it energy efficient for the UK’s 2050 net zero target.

Our focus on retrofit is also based on the social housing sector. This is where our experience lies, but the technologies and approaches required to deliver effective retrofit for this sector, are also true and pertinent across other parts of the housing and construction sectors.

There are many competing priorities affecting the social housing sector at the moment including tenant safety, ongoing delivery of landlord services, increased repairs and maintenance, demand for new homes and the decarbonisation agenda. The sector is working against financial pressures exacerbated by the current economic environment and the cost-ofliving challenge. We reflect on that throughout the report and make the case for a greater integrated approach that can use retrofit as a lever to tackle several housing issues. This is to develop a true integrated asset management and net zero approach which helps to solve multiple issues through a more cost-effective approach, by not tackling each strand in isolation.

Our approach at Mears is centred around making a positive impact for people, property, place, and planet. This report is a small contribution towards that objective.

It is that first issue we think retrofit needs to be viewed through – people. We do not deny the technical nature of the solutions involved or the economic impact of the work itself, but we feel sometimes it is forgotten that this is ultimately about people living in better homes. And, by better homes we do not just mean with lower emissions, we mean having a positive effect on the cost of heating a home, the improvement in the health and well-being of the resident and the building of a sense of pride in communities and place that are better environments to live and work.

With that focus on the resident, we talk a lot in this report about the language that needs to be employed. Therefore, here at the start it makes sense to outline the meaning of the some of the consistent themes used in this debate. It can be confusing and there are multiple terms employed, but as you read this report this is the basis we are working from.

It is the buzz phrase but what does net zero mean?

A dictionary definition reads that it is completely negating the greenhouse gases produced by human activity. A greenhouse gas is a gas that contributes to the greenhouse effect by absorbing infrared radiation. In essence, they raise the surface temperature of the planet.

The knowledge portal Unlock Net Zero * use one of the most common definitions – net zero refers to achieving a balance between the amount of

greenhouse gas emissions produced and the amount removed from the atmosphere. The UK government has committed to the target of reaching net zero emissions by 2050, which will require large-scale and extensive change across all sectors and industries.

At Mears we have published our own pathway to net zero. It sets out how we will achieve our ambition across two phases:

Phase one is a pledge to be net zero across our scope one and scope two emissions by 2030. Scope one emissions come from sources that as an organisation we own or control directly. Scope two emissions are those that we might cause indirectly and comes from where the energy we purchase, and use is produced.

Phase two is a pledge to be net zero across our Scope three emissions by 2045. Scope three emissions are those not produced by us and not as a result of activities from assets we own or control but are the emissions we are indirectly responsible for up and down our supply chain.

We acknowledge that achieving net zero is a significant challenge for everyone, but it is a challenge we have embraced to realise the benefits this will bring to our business partners, customers and communities and our contribution to a more sustainable planet.

Decarbonisation is also a heavily used term.

It is a method of climate change mitigation and defined as the process of significantly reducing or eliminating carbon dioxide and other greenhouse gas emissions from the atmosphere.

Some people also talk about sustainability. Once again, the dictionary definition reads that sustainability is the avoidance of the depletion of natural resources in order to maintain an ecological balance. Greenpeace ** describe it as a way of using resources that could continue forever and they note that most environmental problems come from using natural resources unsustainably.

People also talk about being carbon neutral. Carbon neutral is making or resulting in no net release of carbon dioxide into the atmosphere, especially as a result of carbon offsetting.

Carbon offsetting is the action or process of compensating for carbon dioxide emissions arising from industrial or other human activity, by participating in activities designed to make equitable reductions of carbon dioxide in the atmosphere.

You might ask what is the difference between net zero and carbon neutral? National Grid *** explain that they have effectively the same end result – removing harmful emissions from the atmosphere but the scale and kind of emissions is different. They go on to say that carbon neutral is like net zero in that greenhouse gas emissions are offset, including a wider definition of offsetting residual emissions but it is less prescriptive regarding the reporting boundary with the inclusion of the wider value chain (often referred to as scope 3) emissions encouraged but not mandatory like net zero.

You can see from these short descriptions that it can begin to get technical very quickly, but we hope that sets a marker for the wider report and the areas we will cover.

*Unlock Net Zero – https://www.unlocknetzero.co.uk/ about-us

**Greenpeace – Sustainability;a simple guide to a vital idea – https://www.greenpeace.org.uk/ challenges/sustainability/

***National Grid – Carbon neutral vs net zero: understanding the difference - https://www. nationalgrid.com/stories/energy-explained/carbonneutral-vs-net-zero-understanding-difference#So%20 What%20About%20Net%20Zero%20and%20 How%20Do%20They%20differ?

There is no right answer to delivering retrofit and we are not trying to tell people what to do. Rather this is our contribution to the wider debate, because as you will see from the report, it is our belief that we will only deliver the scale of retrofit required in the UK through collective knowledge and understanding.

1.The decarbonisation challenge

Housing will need certainty and a pathway to contribute positively to net zero

Net zero is a systems challenge that requires a whole systems solution

key themes

Requires long-term planning and a clear roadmap to deliver net zero

Housing is part of the wider eco system transition to net zero

Net zero is a complex systems challenge. When we talk about the decarbonisation of our energy system, we first must understand what is currently in place, how it presently operates and acknowledge how everything is interconnected, from heat, power, transport through to the infrastructure that connects them. This means that any decarbonisation activity undertaken in any one part of the system requires an understanding of the reaction and effects within another part of the system.

Therefore, the decarbonisation of the energy system can only be achieved through a systems approach.*

If we accept this approach, then it is not possible for individual sectors to decarbonise in isolation. It is also not possible for one technology to deliver decarbonisation on its own. There is no silver bullet solution. Indeed, the scale of change required with decarbonisation means that no one government, or no one organisation can deliver it in isolation. Decarbonisation needs to be a collaborative approach.

Employing a systems approach to decarbonisation means that there is a sequence of events that need to happen.

Most energy modellers agree that when you seek to decarbonise the energy system and the supporting economy you look to decarbonise the power generation sector first, move onto heat and whilst this is ongoing gradually decarbonise the transport sector in parallel. The sequence is this way because there are some big challenges in decarbonising transport fleet not least large-scale aviation and marine which need further time to address due to technology development.

This is the broad path the UK has been following. Most of our emissions reductions to date has come from power generation. Work continues to decarbonise the grid further as well as build excess capacity for the new forms of renewable technology that will contribute. Most energy system scenarios for reaching net zero show that the UK energy sector will be primarily electrified.

The challenge becomes how to build a system and infrastructure to meet this extra demand for electricity. We have an energy system that works today. The problem is that it was just built for different times and different challenges and predominantly uses fuels that damages the environment.

Given most decarbonisation solutions will be electric when we look at this through the lens of a systems wide approach, we have to understand how sectors will decarbonise and how this can be done within the operating constraints of the electricity grid and the demands placed on it today, as well as the forecasted demands of tomorrow.

At a systems level, the decarbonisation of heat is possibly the biggest challenge that the UK faces. Heat currently accounts for approximately 37% of UK emissions ** when including industrial processes. Space heating for UK homes (including a small amount of cooling) accounts for 17% of those emissions. This means when considering how to decarbonise heat it becomes a question of scale as well as one of technology. The question of scale is one of the themes of the net zero transition that is sometimes not given enough prominence.

Given the level of emissions from heating UK homes, housing will be a very big component of the net zero transition in the UK.

Given the level of emissions from heating UK homes, housing will be a very big component of the net zero transition in the UK.

The overwhelming majority of heating in homes in the UK today is delivered by gas.*** When we look at the systems solution needed for decarbonisation most energy modellers are in agreement that to decarbonise heat in the UK we have to get to a position where we take gas out of the system. Given the number of homes and buildings supplied by gas today it becomes clear the scale of what we need to achieve over the coming decades.

With this increased demand for electricity for the energy system focus has been on power generation decarbonisation to date. This means that a complementary basket of technologies such as wind, solar, hydrogen and nuclear are going to be needed to supply clean electricity to the grid. It is not a case of pitting one technology against the other, more, it is about finding the right combinations to meet the increased demand for electricity from a decarbonised economy.

Housing has as we have said, a big part to play in this transition.

Once we understand the need to take a system approach, we can begin to map out the route to decarbonise the heating in our housing stock alongside the construction of new homes in a manner that reduces operational and embodied carbon. Operational carbon **** is the amount of carbon emitted during the use of a building. Embodied carbon ***** is the amount of carbon emitted during the construction or retrofitting of a building.

It helps to identify the possible technology solutions to decarbonise heat in buildings, but it also shows how progress is reliant on the wider decarbonisation of the grid to enable UK targets and commitments to be met. It is important to stress that we need to also address the scale of the transition in an orderly fashion, allowing us to maximise the opportunities both economic and social that this presents. At the heart of this is the

need to ensure any transition is just and fair – by that we mean the benefits are shared widely and to all.

*Energy Technologies Institute – Targets, technologies, infrastructure and investments –preparing the UK for the energy transition https:// www.eti.co.uk/insights/development-insight

**Energy Systems Catapult – A guide to the decabonisation of heat in the UK - https://es.catapult. org.uk/guide/decarbonisation-heat/#:~:text=How%20 much%20does%20heating%20contribute,amount%20 of%20cooling)%20%3D%2017%25

***Office for National Statistics – Census 2021: how homes are heated in your area https://www.ons.gov. uk/peoplepopulationandcommunity/housing/articles/ census2021howhomesareheatedinyourarea/2023-0105#:~:text=Mains%20gas%20central%20heating%20 was,their%20only%20central%20heating%20source.

****SPOT Embodied vs Operational Carbon https:// spot.ul.com/blog/embodied-vs-operationalcarbon/#:~:text=Operational%20Carbon%3A%20 The%20amount%20of,of%20a%20product%20or%20 structure.

*****RPS Embodied carbon: What it is and how to tackle it https://www.rpsgroup.com/services/ environment/sustainability-and-climate-resilience/ what-is-embodied-carbon/#:~:text=Embodied%20 carbon%20is%20the%20amount,all%20produce%20 embodied%20carbon%20emissions.

Discussion questions:

• How do we decarbonise heat and buildings in the UK?

• What is the level of emissions from heating in the UK?

• How important is the decarbonisation of the grid to retrofit solutions?

• Why can’t housing decarbonise at its own pace?

2.The dual challenge facing housing

We face a volume challenge in the retrofit of existing properties

We need to build new homes now which are low/zero carbon in construction and operation

key themes

We should not look to add to the retrofit challenge through poorly designed new housing

Solutions we employ must be scaleable

When we look specifically at housing and its role in the net zero transition, there are two clear challenges that we must accept and overcome. The first is how we ensure that all new homes we build are low to zero carbon in construction and operation. The second is how do we ensure that the housing stock that already exists today that will still be in existence and use in 2050 is made to be energy efficient and low carbon in operation.

Given these two strands the sector has a dual decarbonisation challenge to address.

When it comes to building new homes, with the timeframes ahead of us and the volume of existing properties that need a process of retrofitting (the process of making improvements to a home so that it becomes more energy efficient and operates with lower emissions) it is becoming imperative that the homes we build for today need to be future-proofed. If nothing else, we should ask ourselves if we have the capacity to add to the retrofit programme we are going to have to undertake before 2050. We should also ask, if we know what we need to do to make properties zero carbon, why would we do something in the interim that will only have to be rectified in years to come?

Compliance with the Future Homes Standard comes into force in 2025 and should provide the sector with certainty on how to proceed. The Standard * should ensure that all new homes built from 2025 will produce 75-80% less carbon emissions than homes delivered under current regulations.

Current estimates show that there are up to 29 million homes ** in existence today that will still be part of the building stock in 2050 that will require an element of retrofitting. We are therefore looking at the need to be retrofitting more than 1 million properties per year. The UK Green Building Council say we need to be making improvements to 1.8 homes every minute over the coming decades.

We are nowhere near this level today.*** This illustrates that the challenge for housing is yes one to identify the correct technologies to use in properties, but that it is more so a challenge of volume and scale to deliver in the timelines that we need to deliver within.

If we look at the part of the housing sector we are directly involved in, the affordable and social housing sector, we are talking about nearly five million properties. The Government has set a target for all social homes to be a minimum of EPC (Energy Performance Certificate which shows how energy efficient the building is) C by 2030. Estimates on the cost of decarbonising existing social housing stock differ, but research from Savills for the National Housing Federation **** put this figure at £36 billion.

There is no accurate estimate on how much each retrofit will cost. Whilst some of the renewable technology solutions remain relatively embryonic, they come with a higher price tag which makes the process of retrofit expensive as well as increasing costs in new build projects. It is something that focuses the minds in boardrooms. As the retrofit market grows and matures together with refinements to technology, it is expected that these costs will reduce, but that will still take a bit of time to filter through.

*RIBA – The Future Homes Standard explained https://www.architecture.com/knowledge-andresources/knowledge-landing-page/the-futurehomes-standard-explained

**UK Green Building Council – Home Retrofit https://ukgbc.org/our-work/ retrofit/#:~:text=What’s%20UKGBC’s%20 approach%20and%20how,29%20million%20 homes%20by%202050.

***IEA Sustainable Recovery – Buildings https:// www.iea.org/reports/sustainable-recovery/ buildings

****Savils Decarbonising housing associations’ homes to cost £36bn, according to National Housing Federation https://www.savills.co.uk/ insight-and-opinion/savills-news/320272-0/ decarbonising-housing-associations--homesto-cost-%C2%A336bn--according-to-nationalhousing-federation

Discussion questions:

• What approach should we take when building new homes?

• How do we effectively future-proof homes for the net zero transition?

• How best do we approach the volume of retrofit we need to undertake in the UK?

• What can we learn from new build activity to inform retrofit work and vice versa?

Current estimates show that there are up to 29 million homes in existence today that will still be part of the building stock in 2050 that will require an element of retrofitting.

build

We understand the retrofit challenge, let’s not add to it with inefficient new builds

key themes

Need for standards to drive change and create a consistent approach

As we have noted, the sector already has a big enough challenge facing it with retrofitting existing properties that will still be in existence in 2050, without adding to it with properties that we build today that will need forms of upgrades in the coming decades.

Housing is also coming more to the forefront of the current political debate. Ahead of the next general election, the political parties have begun to talk about the level of housebuilding they see is required across the country. Irrespective of the number and the party that comes into power (probably just before 2025) it becomes vital that these homes are built to low and zero carbon standards if we are to meet our legally binding net zero 2050 target.

The Future Homes Standard will come into force in 2025, but that still leaves a period for new developments to be built to old standards opening up the possibility that we will be building properties in the coming years that will need a form of retrofitting in years to come.

The UK Net Zero Carbon Building Standard* programme is in train to enable the sector to set out how to measure a building’s net zero limits, targets, and performance requirements.

Like all markets, certainty is key and beneficial to performance. This means the government approach, the regulations the sector needs to work towards and the standards that are expected need to be clearly and widely known.

In the wider net zero transition there is an argument that it is standards and regulations that will drive real change not subsidies. A clear vision for the sector to work towards is one we would support and advocate.

We should also take the learnings from the approach to building new low carbon homes into the retrofit arena. Sharing the understanding of how best low carbon technologies perform across housing tenures should help inform retrofit plans. It appears possible that we might be able to reach a position where technology becomes agnostic across new and old buildings.

It is the performance that matters, that provides, tenants, residents, renters and homeowners with warmer, healthier better ventilated homes that also reduce carbon emissions.

From the numbers we know it becomes apparent that we cannot afford as a country to continue building new homes that simply add to our retrofit inventory.

*UK Net Zero Carbon Buildings Standard https:// www.nzcbuildings.co.uk/

Discussion questions:

• How do we prevent building new homes today that will need retrofitting tomorrow?

• How do we create consistency in our approach to building new homes?

• What are the standards that inform the build of new homes compatible with the net zero transition?

Need to take a longterm view with a long-term stimulus to deliver

The use of the correct language for resident engagement is important – we should seek to make retrofit an aspirational activity

Look beyond retrofit as simply a technical proposition – retrofit is a very human experience

key themes

It takes brave leadership to drive retrofit

forward

What exactly is retrofit? What does it mean? Is it the best phrase to use to engage people in changing their homes, their approach to heating those homes and adopting the subtle behaviour changes that will come about from adopting low carbon/renewable heating technology?

One definition of retrofit is – add (a component or accessory) to something that did not have it when manufactured.

Another definition is – to furnish (something such as a computer, airplane or building) with new or modified parts or equipment not available or considered necessary at time of manufacture. We know in the context of housing that it relates to the interventions that are going to have to be made to homes that are presently not energy-efficient to bring them up to standards that will allow the country to meet its net zero commitments and provide an enhanced living experience to their occupants.

The Centre for Sustainable Energy * say that retrofit refers to any improvement work on an

existing building to improve its energy efficiency, making them easier to heat, able to retain that heat for longer, and replacing fossils fuels with renewable energy.

Research from the Open Property Group ** in early 2023 found that only 40% of homes in England currently meet the recommended EPC rating of “C” or above. When looking at the long-term trajectory out to 2050, this research highlighted that this was only a 1% improvement on the previous year.

There are questions about the accuracy of EPC ratings, but in the absence of any credible alternative they are used as a broad measure which includes the eligibility for government support funding through schemes like the Social Housing Decarbonisation Fund and the Home Upgrade Scheme, which are targeted at properties of a rating below EPC D and below. The government has set a target for all social housing properties to be a minimum EPC C rating by 2030. That leaves us the best part of six years to deliver.

If we take a baseline that this is about improving the lives of tenants, residents, homeowners and creating decent homes for everyone, why are we not in the middle of a retrofit revolution?

Are we not clearly promoting the positive benefits of retrofit? The impact it will have on people’s lives, the economic opportunities it can create and the positive legacy behaviours it can create.

Is it a case of misunderstanding what is meant by retrofitting? This is a process that people need to be engaged with. Given the scale of the challenge it is very hard to see how this can simply be “done” to people. There is a clear need to win hearts and minds, so people engage and want retrofit to be applied to their homes.

In a way, demand needs to be created by residents. Residents are at the heart of this. They should be driving it.

4.What is retrofit?

This implies a partnership between landlord and resident. Retrofit should be a resident first activity. Time needs to be taken to understand a residents current understanding of retrofitting and work with them to advise of the benefits of the activity. Residents need to trust why retrofitting is happening and why it will be beneficial to them.

As retrofitting is something that the majority of people might not be aware of, we have to ask the question how do we build their trust in the process? Perhaps the sector could come together to pool resources and materials so that a consistent language on retrofitting is used across the sector.

If we do not clearly understand the needs and requirements of residents, then how can we effectively provide them with the solutions that they will embrace? In this instance, not everyone is motivated to save emissions, but people might be more motivated by saving money on their energy bills by upgrading their homes to be more energy efficient. We should understand this and engage accordingly. And if the end outcome of the work is that the individual and society benefits from reduced emissions is that not a win for us all?

Whilst there is an undoubted technical element to retrofit – what technologies to employ, what methods to employ to retrofit and an economic element – the cost of undertaking the activity – the aspect of education, engagement and communication is equally, if not more important to make this the success it needs to be and at the scale of delivery we need to employ.

Without retrofit we cannot decarbonise heat in our buildings and without decarbonising heat we will not be able to deliver on the country’s net zero ambitions. Now is the to time lead, we simply must deliver on the retrofit mandate. Whilst we have been addressing for a number of years, with the volume of retrofit work still to deliver, this might be our last chance to get it right. This poses the question how do we think we can deliver retrofit at scale and in a manner that meets the needs of the landlord

but particularly the resident whilst delivering the carbon savings, we desperately need?

*Centre for Sustainable Energy – What is retrofit? https://www.cse.org.uk/news/what-is-retrofit/

**Open Property group – 2022 EPC ratings https:// www.openpropertygroup.com/landlord-hub/2022epc-ratings/

If we do not clearly understand the needs and requirements of residents, then how can we effectively provide them with the solutions that they will embrace?

Discussion questions:

• What is retrofit?

• Is retrofit just a technical challenge?

• How big is the retrofit challenge we face?

• How do we meet the needs of the landlord and the needs of the resident?

5.What have we learnt to date from retrofit?

Certainty is needed in both policy and funding landscapes

We continue to learn daily, job by job

key themes

To scale retrofit we need a consistent approach across the industry

There is no one size fits all solution

Firstly, we must acknowledge that here at Mears we continue to learn daily as we undertake more and more retrofit activity. We are beginning to see this now as a scalable activity. It has grown slowly over the years, and its demand has grown in line with greater funding being made available from government.

At times it still feels like an embryonic market which brings with it a natural nervousness. This is where a more open approach to collaboration across the sector could make a big positive impact.

We are seeing the emergence of groups like the National Home Decarbonisation Group (of which we are a founding member) and the National Retrofit Hub which we feel are both positive developments and will be a force of good for the sector and for the delivery of retrofit across the coming decades.

It is the linking of strands of activity that is key. We have outlined this is as much a volume challenge as it is a technical one. It requires an openness and willingness to share learnings and knowledge.

The sector is developing stringent guidelines to operate against. PAS2035, PAS2030 have been transformational providing valuable knowledge that will allow for a broad impact across the social housing portfolio.

The introduction of the Social Housing Decarbonisation Fund has also been a catalyst for positive change. Not only has it provided a clear line of funding, the work that has been delivered as part of Wave 1, has undoubtedly informed the approach and scale of the wider Wave 2.1, allowing the sector to deliver more, but also deliver better, building on learnings from the first wave of projects and with SHDF Wave 2.2 being released.

At Mears we have worked extensively with a number of partners and peers across the UK social and affordable housing sector on their retrofit journey to date. And we have and continue to learn a lot from this process.

We believe that there is a desperate need to educate people about what retrofit is and have an honest conversation with them about what it entails. Whilst the industry involved is well versed in retrofit and what it means, too often we have come across misunderstandings and misconceptions about what retrofit is. It is therefore important that we engage well with residents and understand their motivations and match retrofit to meet these, so we can demonstrate how this can enhance and improve their homes and living experience.

Without clear and positive engagement around retrofit programmes there will remain a sense of mistrust. This stems from a fact that for a majority of residents they have not asked for this, and for many, because of the associated disruption of a retrofit programme, they see it as an imposition. For some, the lines of communication employed have confused them and they are not fully clear as to why this work is happening, why it is happening now and what the benefit will be to them.

5.What have we learnt to date from retrofit?

These are questions that should be easy to answer, but if we do not address them proactively, they can act as a bit of a blocker.

Some of the issues stems from the manner of engagement, and some from the language employed. Mirroring wider public sentiment, there appears a desire to address climate change, but there is a nervousness when that comes to individual actions especially around the individual home or property.

The extent of work and the intrusion on their lives involved with retrofit surprises a lot of residents. Retrofit is a complex issue to explain but should be a simple solution to execute. We feel from our experience that if you get your engagement right at the start of the process, and that you help to educate the resident on the why and how of the retrofit works, it becomes easier to outline the benefits they will receive from participating. This also requires ongoing communication with the resident post the work being completed. It is about placing the resident at the heart of the programme.

With a move to low carbon technology there is an element of behaviour change as to how residents interact with the new technology as well. A poor induction to the technology will likely result in poor engagement and the potential to not use the technology to its full potential. This risks creating a bad experience for the resident. A positive experience before, during and after the retrofitting process is important. People are influenced by peers such as their neighbours. A good experience will help create demand. A poor experience will affect perception of the retrofit process.

We have come to understand that when we look at retrofitting, all individuals are motivated differently. Not everyone is motivated to reduce their carbon emissions, especially when we are in the middle of a cost-of-living crisis.

People can perceive low carbon to be more expensive because that is “what they have heard”. Therefore, a number of motivating factors should be used to convince residents of

the benefit of retrofit and how it can positively impact other parts of their lives, both from a health and a financial perspective.

It might be that a better insulated property that reduces their energy bills is the factor they focus on. Alternatively, it might be to live in a better ventilated property that makes them warmer and feel healthier. It could be that the combination of a warmer, cheaper home to run helps with anxiety and their mental health, because it takes away the fear of the cost of the bills. Whatever it is, we should employ these motivating factors in the education and engagement process.

If the reduction of carbon emissions because of retrofit becomes a by-product, rather than the main selling point, then that is still a good result. We should be guided by what motivates the resident to accept, rather than try to force an end outcome on them. When we look at the bigger picture, it is this end outcome that matters rather than the motive employed.

Some recently published data from research undertaken by law firm Shakespeare Martineau * makes for interesting reading on this subject. In a widespread survey of social housing tenants, the headlines showed that 70% of tenants wanted to know more about how retrofit changes would affect their home and 86% of tenants want to be more involved in the process of making their home more energy efficient. The biggest concerns they raised were that works were not happening fast enough, that they did not understand the process and that they did not understand what works were being done.

The largest volume of retrofit activity we have been involved in has been focused on External Wall Insulation (EWI). This approach to wrap the building is generally known by many as the “fabric first” approach. The benefit of EWI is it improves the thermal performance of a building, helping to reduce heat loss. It makes living spaces more comfortable, reduces noise levels making the home environment a more attractive proposition.

We need retrofit to be a true collaboration and for all parties involved to be prepared to share learnings and learn from each other to make this a process that delivers for all.

Once again this is where we must watch the language we use. Fabric first is clearly known in the industry but is it the most helpful phrase to use when talking to residents. Always we should ask the question is a resident likely to understand?

To show empathy with the resident we should be using consistent language. Our aim should be to make the process easy to understand and not open to misinterpretation by assuming people will know what you mean when using what is viewed by many as technical terms and jargon.

Another important aspect of the retrofit journey is that we need to carry out extensive post occupancy evaluation. By that we mean once the retrofit has been completed you do not just walk away onto the next project. You need to understand the impact of the work, and by that what it means for the resident. Is the technology working to expectations? If not is this because the resident is not familiar with what they need to do?

By compiling an evidence base of what works well and what does not work so well with residents, it allows us to plan better for future projects. Some building tenures will lend themselves to different technologies.

Local energy infrastructure plays a role as well. The energy connection to a property will help dictate the end solution applied. There is simply no one size fits all answer. This makes for the importance of good availability of data and clear interpretation of what it is telling us, to inform the design of a successful retrofit programme.

As we are still on the start of a long journey to retrofit not just social housing but all of the c29 million properties that will still be in existence in 2050 with some form of energy efficiency measures. We need to collect robust data and build a shared understanding to inform better future approaches.

Linked to this is measurement. It is and should be a constant in retrofit activity. Measure from a technical perspective but also measure from a

human perspective.

Make the experience positive and one that residents will begin to advocate for with their peers. Crudely, with the timescales involved to meet our defined targets, this is a volume game, and we can’t afford the time to try and overcome dissenters. The scale of the challenge is so big and we need to ensure residents are an integral part of this journey.

Clear, understandable evidence will help provide a shared learning experience for all. We have seen that potentially a little bit of knowledge can be a dangerous thing. This is where misconceptions can happen, and misinformation shared.

We need retrofit to be a true collaboration and for all parties involved to be prepared to share learnings and learn from each other to make this a process that delivers for all. The number of properties that need to be retrofitted means that we should not view this as a competition, rather as a collaboration of minds and skills.

With the number of homes involved there is enough work for everyone (and more). What we should be focused on is completing the work at volume, to allow us to reduce the emissions from heating to meet the wider UK targets.

*Shakespeare Martineau – Engaging the hearts and minds of social housing tenants https://www. shma.co.uk/our-thoughts/retrofit-report/

Discussion questions:

• What are the key observations on your retrofit journey to date?

• Where does the resident place in your approach to retrofit?

• Is an education programme needed for retrofit?

• How best do you explain retrofit to a resident?

need to start with data

Evidence is key to effective decision making

Good data is vital to make informed decisions

key themes

Better sharing of data will help inform the sector

Good decisions tend to be made on the back of good quality evidence. This is why the collation and interpretation of good quality data is such a vitally important component of the net zero journey. It is at the heart of good intelligent decision making based on clear evidence and helps form effective asset management practice. Simply put, without the true understanding of the housing portfolio and stock, it is hard to make well-informed decisions on what to do with it to make it low carbon. Therefore, data is crucial and critical to the successful delivery of retrofit programmes. Accurate data helps to identify the priority properties to retrofit, recognising where the greatest impact can be made. It also helps when you get to the individual property, identify what are the most appropriate measures to employ on that particular property to deliver the energy efficiency required. Data is also needed on performance post installation to ensure that the work functions correctly and that the resident is satisfied and happy with the outcome.

It is a day-to-day process. It does not stop. It needs to inform everything we do across the housing sector and work across streams not just in isolation.

However, in our experience, the quality of data that is out there across the sector is variable, some really good and in some cases some which is poor. This naturally poses an additional challenge to the already significant challenge over the volume of retrofit that we know has to be delivered over the next 26 years.

It is important that all parties involved contribute to collection and interpretation of the data collected. The supply chain can add real valuable insight to the social housing providers to help shape their retrofit activity and programmes.

When it comes to measurement, the main instrument used to measure energy efficiency in properties is the Energy Performance Certificate, known as the EPC. Introduced in 2007 to demonstrate how energy efficient a property is, the requirement to have an EPC has been the law in the UK since 2008. It is the responsibility of the landlord or owner of the property to obtain an EPC rating.

The EPC system is probably best described as an imperfect system, but it does give the sector a consistent comparator to work against.

It has also been used in policy and regulation setting with all social housing targeted to be a minimum EPC C rating by 2030. This shows the significant impact the sector can have on reducing heat emissions in the UK, but for many there is a question as to whether the tools and mechanisms, not least the funding is available to meet this aspiration.

There is an awful lot of data to collect and interpret to get retrofit right. It is not a one-off exercise, it is a constant. It plays a significant role in the successful delivery of PAS 2035 retrofit standards framework as well as being a core component of complying with public sector funding schemes. But, what else can data tell us for other aspects of asset management and how can it inform to allocate our finances accordingly? Ultimately what is the best way to collect data on a home?

Our data arm IRT Surveys put it well. To improve properties without wasting time and money you need to know what is really going on. This means gaining access to the most reliable data.

Data should help us to be technology agnostic, it should not prejudice our decision making. Data should help housing providers, many of whom are at the start of their retrofit journey map out a route that works for all parties. They know the end outcome – sustainable and energy efficient housing – but they don’t know the best route to achieve this. Data helps to outline a intelligenceled solution to have the biggest impact and provide the best value for money.

When we cast the net far and wide across the social housing sector, data does exist, but it tends to be data that operates in silos and is not always used in its full capacity to inform intelligent decision making. It is quite right that data is precious and needs to be respected by organisations, but this is one part of the retrofit jigsaw which would really benefit from greater collaboration. Not just in the collection of the data, but with the interpretation of the data as well. We understand the importance of anonymised data, but if we had the ability to share sector wide trends and results would that make delivering against what we have to easier? There is a lot of talk about collaboration and partnership working to deliver net zero.

Data collection and interpretation is an area where this could work well. Service providers are working with residents everyday and could be used to input information to build a clearer picture on what the resident wants and also how the resident engages with the technologies to deliver retrofit.

Retrofit is a consistent challenge, we should be making decisions based on the same assumptions, to help drive efficient and more importantly practical solutions which benefit the many.

As part of this process, it is important to interrogate your data extensively. It should not just be taken on face value. This is why

knowledge at individual property level becomes so important.

Managing data effectively requires skilled practitioners. Data processing and analysis should be seen as core roles and skill sets to deliver retrofit effectively. This is not just a trades issues, many interdisciplinary skills are needed to provide the volume of retrofit solutions required. Data must be at the centre of design and implementation. When integrated correctly it can help create greater understanding of broader stock conditions and help to identify and analyse the needs of residents today and also help chart and predict their needs in the future. It also plays an important role in the ongoing monitoring of the solutions implemented to further learn and refine future approaches and manage day to day asset management delivery. Data also provides evidence and integrity for funding decisions as well.

If data is not interrogated properly, not only can it lead to poor decision making in the short-term it can also store up long-term issues as well. With finite resources available it makes it the more imperative to try and get this right first time.

The volume of work required on our housing stock (old and new) means that we do not have the luxury of time and capacity to absorb further major renovation work. This is where the investment of time and money up front can prove to be a cost saver in the long run.

Technology is becoming more prevalent, and sensors are a key tool to track information in the home. And, whilst we are becoming savvier and accepting of technology there is still an engagement issue to consider when looking at the input of sensors into people’s homes to help analyse their relationship with energy to provide better solutions for them. This means engaging people in a human way. Not hiding behind technical language but instead guiding the resident through why this is a good and positive thing for them – in the path to create warmer, better ventilated healthier homes.

6.You need to start with data

Thermal imagery is a growing market for the collection of accurate data. It is a great tool to pinpoint the inefficiencies of a building and its power is to be able to show in a picture this in action. You are not hiding the story or your message behind a graph of data, there is a physical representation of the story you are trying to tell a resident. As the adage goes, a picture is worth a thousand words.

Infra-red technology allows you to accurately measure areas of moisture, leaks and energy loss without mess, disruption, or scaffolding. It provides hard data, free from assumption. Using this data, it can then feed into making intelligent retrofit decisions, using specially created software that allows housing providers to use their own property data to identify appropriate energy-saving solutions. In essence the data is putting them in control.

Mears are investing heavily in this solution. Technology needs to adapt and change to changing times. Both for capturing data at source which in the field of thermal energy needs to be when it is dark, cold, dry and with the heating on and for analysis at scale.

Our retrofit modelling arm, IRT surveys have developed new MappIR technology which includes four thermal imaging cameras with 360-degree capability fitted with top of the range GPS.

Capable of surveying at 30mph and accurate to one centimetre in every direction this is going to allow us to rapidly upscale the number of homes we can survey per locational visit. We are also investing in AI technology to allow the analysis of imagery automatically rather than manually.

Helping to speed up the process and package the data for use by housing providers with their software solutions. We feel it is a bit of a gamechanger for the sector.

As technology becomes better and more accessible it helps us to tell that data led story and importantly quantify what the thermal imagery means in pounds and pence. This

accurate data allows us to have stronger and deeper conversations with landlords and residents, especially when set against the backdrop of the current cost-of-living crisis and economic headwinds, which to a large extent has been exacerbated by rising energy prices (based on the price of gas) over the last few years.

Retrofit is a consistent challenge, we should be making decisions based on the same assumptions, to help drive efficient and more importantly practical solutions which benefit the many.

Discussion questions:

• What are the consistent methods of data collection in social housing today?

• How do we scale up the data skills in the housing sector to deliver retrofit effectively?

• What new methods of data collection can make a big impact moving forward?

Our retrofit modelling arm, IRT surveys have developed new MappIR technology which includes four thermal imaging cameras with 360-degree capability fitted with top of the range GPS.

7.Technology solutions for retrofit

Innovation will continue to refine our technology approach

EWI and fabric first is currently the most popular approach to retrofit

key themes

Electrification of heat is the most likely net zero approach

Need to break technology myths, especially

around heat pumps

The first thing to note when we talk about technical solutions for retrofit, like most things there is no one size fits all solution. The solutions for retrofit will come from a complementary set of technologies and approaches and their employment will be guided by both geographical energy infrastructure and tailored by the retrofit need of each building.

Most energy system models identify electrification as the preferred route for decarbonising heat. If this is the case then we will be working with a number of known, but presently underdeveloped and under commercialised technologies. An increase in retrofit activity and demand will lead to an increase in the efficiency and cost-effective nature of the technologies involved.

To date our observations are that the predominant approach to retrofit has been through External Wall Insulation – EWI. Indeed, insulation and the “fabric first” approach is the most common approach adopted today. This involves minimising the overall energy consumption of a building and takes a whole building approach.

Sometimes referred to as the “building envelope” the approach includes a focus on airtightness, thermal bridging, glazing to windows through a focus on the roof, walls, windows, floors, and doors of a building. In essence the more airtight the building is, the more effective it is at retaining heat.

The benefit of this approach is that with a whole building approach you are looking to conserve energy. This makes the home a better balance and with a warmer building framework helps to reduce demand on the grid. You have probably heard the phrase that the cheapest energy is the energy you do not use. This is true. It is very easy to look at this just from a perspective of the question of the supply of energy, but we also need to tackle energy demand as well. If we can reduce the need for energy consumption by providing better insulated and ventilated buildings, we can create a more balanced system. If the home is warmer to start with, it will help reduce the overall bills residents will face. But the technology solution comes down to that recurring question we have highlighted – the need to provide the right solution to meet the needs of the resident.

One technology that is beginning to grow in its popularity is the introduction of solar power to properties. Data from the Microgeneration Certification Scheme * shows that in 2023, the installation of solar power is by far the most popular form of small scale renewable energy technology installation in the UK today. It is far outperforming the installation of heat pumps which have been identified as a key delivery of low carbon heat in our net zero transitions.

This approach to the whole house and understanding the dynamics of the property is an important one and builds on the points we made in the previous chapter on data and how that is important for designing the right retrofit solution for a property. These are important considerations when looking at the question of scale and volume that also have to be delivered. The question of how we increase the uptake of heat pumps is a pressing one. In most scenarios to reach net zero in 2050, the level of heat pump

installation needs to grow and grow quickly. The government has a target of 600,000 to be installed each year from 2028. In 2022 the level of heat pumps installed was 72,000.** These two numbers once again highlight the scale of the challenge ahead. And it is a challenge that will include the subject of our next chapter skills – with the number of trained gas engineers far outweighing the number of trained heat pump installers we currently have in the UK.

There is a lot of activity underway to drive greater uptake of heat pumps. The government has been running for the last couple of years its Boiler Upgrade Scheme. The scheme which is open to people in England and Wales provides a grant to cover part of the cost of replacing fossil fuel heating systems with a heat pump or a biomass boiler. The property in question must have a valid EPC certificate with no outstanding recommendation for loft or cavity wall insulation.

To increase the move to heat pumps the government has recently increased the value of the scheme and is now offering a grant of up to £7,500. The scheme has a value of £3.9 billion and is scheduled to run until 2028.

Coupled with this financial incentive we are seeing larger manufacturers and energy suppliers such as Octopus Energy, Ovo and British Gas bringing forward cheaper heat pump models to the market. In essence this looks like the beginning of a ‘competition’ with a high level of investment into the manufacture and marketing of heat pumps as a solution of the future. The question is, will this just focus on the private homeowner market or does it have the potential to make a big impact on the social, affordable homes sector as well.

The recent second national infrastructure assessment from the National Infrastructure Commission *** was quite equivocal that they did not see any role for hydrogen as a domestic heating solution in the UK. Rather it will play a role in decarbonising industrial processes and transport. They argued that efforts and investment should go into building infrastructure to meet the projected increased volume of heat

pump installations and what that means for the infrastructure that delivers heat to properties.

One area that a large move to heat pumps will have to address is a perception issue. There are some myths surrounding the use of heat pumps that need to be allayed including the level of efficiency against a gas boiler and whether they work well in cold weather. Data from trials run by the Energy Systems Catapult **** shows that in fact heat pumps are up to three times more efficient than gas boilers and that they provide good cold weather performance. This is not always the picture presented in some media reporting, and highlights the importance of robust data on technology performance to dispel myths.

One thing that is certain about a heat pump is that it works differently to a gas boiler and that means that users will have to learn how to operate it to its maximum potential. They require a building to be well insulated (back to our fabric first point) and work best with radiators with a larger surface area.

This lends us to another core issue when it comes to technology adoption – how we engage with the tenant, resident, homeowner, end consumer – more of that in a later chapter.

One thing that will drive forward further uptake will be innovation and the appearance of new technologies that add to the suite of low carbon technologies that can be employed. This could be through the further refinement of existing technologies or the emergence of new ideas such as infra-red wallpaper for example. One of the key things we need to understand is that we must be ready to adapt and learn quickly because with the volume of uptake in retrofit over the coming decades, things are likely to move and move fast.

We also need to recognise the level of impact AI and sensor technology will play in the delivery of decarbonised heat. We have seen this to an extent already in the form of the roll out of smart meters. But with the increased use of sensors to capture and inform habits and behaviour and

7.Technology solutions for retrofit

energy consumption we are rapidly moving to an area where homes will become, if they use solar and other generating technology, their own mini energy centres. Residents will be presented with data to interpret on how to get the best out of the technology that is installed in their properties.

This can be unsettling for some and will require careful engagement and management. Once again, the importance of data is coming to the fore.

It is fair to say that for most people we tend to be passive consumers of heat. How many people know exactly what a kWh of energy is? Our society is changing though, and people are a lot more aware of what they do, and they don’t use and are questioning the value of services provided. This has been exacerbated by the cost-of-living crisis, and it would be nice to get to a position where technology is used to help and enable all to enjoy and benefit from healthier, lower emitted heat which helps to inform intelligent use of the natural resources we have available to us.

What will be of great importance is that the solutions that will be employed will be determined largely by local geographical resources. There is no one size fits all solution that you can throw over the country, rather it will be a patchwork of regional solutions that determines the delivery of low carbon heat. This is because of the infrastructure of the energy system and how it will repurpose over the coming decades. We have an energy system that works presently, the issue is that it was built for a different time and challenge. The big difference to the grid will be the use of renewable energy which is more intermittent in production and will require storage solutions to operate at an optimal level.

What is growing in popularity is the development of local area energy planning. A concept that is being developed and led by the Energy Systems Catapult. The aim is to develop comprehensive energy plans for specific geographical locations which will provide low carbon heat across a location’s infrastructure – housing, public estate, retail, and leisure. How these plans are put together will influence delivery. They are designed to help inform and support local authorities, distribution network operators, businesses, and communities plan for a cost-effective transition. They explore a range of different energy scenarios to achieve deep decarbonisation at least cost, whilst also promoting clean growth.

It is evidence of a strategic approach that is long-term in its nature. The development of local energy infrastructure will have an impact on retrofit investment decisions and priorities.

What these developments show us is the need to understand the interconnected activity of all these areas. Each sector like housing is an ecosystem of the wider net zero transition, and the area of social and affordable housing is a sub section of that eco system as well. This means that to be effective we need clear planning and coordination. Most local authorities have now declared a climate emergency and are developing detailed plans of how they are going to deliver solutions to overcome this emergency.

It plays back to our point about data. You need a clear understanding of where you are to develop an effective plan. This is also why long-term policies, and a detailed roadmap is preferential for other actors to make their plans and deliver accordingly.

What we cannot do is afford ourselves the luxury of pausing activity and waiting for perceived “perfectly right” answers. The volume of what we need to deliver means that we need to move and move at pace. It becomes important that we learn and adapt through the activity we are undertaking.

We have a good knowledge of the technologies that will deliver a decarbonised future. What we need to do is implement these solutions and learn from them in operation. Waiting to implement solutions will create bigger problems that we have to deliver on at a greater level of pace. These learnings should be shared far and wide. The volume is such that it will be beneficial for all to learn from each other. Retrofit is a common challenge for housing providers, so the greater the level of understanding of how to tackle it will become a win-win for housing providers and residents alike.

Learning through action will require a large focus on post occupancy evaluation of retrofit activity. To truly learn, we need to understand how the technologies operate and how the residents interact with the technology once it is fitted and is operational. We should not fall into a trap of deliver and move on. Post occupancy evaluation will require a level of investment, but it creates valuable data that will add to our knowledge base and help refine the solutions and operational delivery of retrofit and the ultimate delivery of decarbonisation. We need to move to a position where such analysis of retrofit implementation becomes part of “business as usual” asset management operations driven by ongoing engagement with residents to understand the broad impact of the measures employed.

Data should drive all our decision making. And, given the variances we have discussed it is important that the data used is technology agnostic and allows us to make decisions on what is right for the specific property. Data is our friend, and we need to make it work for us.

Acceptance of renewable technology is another big issue to overcome. This requires education on a wider level.

We will cover engagement in more depth later on in the report but our language in the area of technology should answer the question WHY we are changing the technology we currently use for heat and hot water. It then needs to explain clearly HOW we are going to change and what this will mean for how we live and use the technology moving forward. We need to be honest and explain what the IMPACT of retrofit will entail. and finally, we should outline the BENEFITS of why the new technology should be employed.

Presently it appears we spend a lot of time and effort on the broader picture of the WHY and the BENEFITS which are sometimes at a high level and not pertinent to everyday life. Our engagement chapter will look further at the motivations that need to be understood to help change behaviour.

We ideally need to get to a place where low carbon renewable technology is seen as something that is aspirational. Today too much of the net zero discussion is framed about its inconvenience and how it is perceived as a burden, when what it requires is a framing that we can redefine how we live and work in an environment that is better for our health and wellbeing.

Decarbonisation report

7.Technology solutions for retrofit

*MCS – UK on track for best year ever for renewable energy and heat installations https://mcscertified. com/uk-on-track-for-best-year-ever-for-renewableenergy-and-heat-installations/

**UK Parliament POST Research Briefing – Heat pumps https://post.parliament.uk/research-briefings/ post-pn-0699/

***Second National Infrastructure Assessment: Baseline Report https://nic.org.uk/studies-reports/ national-infrastructure-assessment/#:~:text=The%20 Second%20National%20Infrastructure%20 Assesset,and%20protects%20the%20natural%20 environment.

****Energy Systems Catapult – Heat pumps shown to be three times more efficient than gas boilers https://es.catapult.org.uk/news/heat-pumpsshown-to-be-three-times-more-efficient-than-gasboilers/#:~:text=Insight%20%26%20Proposition%20 Design-,Heat%20pumps%20shown%20to%20 be%20three%20times%20more%20efficient%20 than,relatively%20small%20reduction%20in%20 performance.

Discussion questions:

• What technologies are prevalent today in retrofit?

• What role does innovation play in retrofit?

• How do we move from a reliance on fossil fuel technologies to low carbon solutions?

• Will AI play a role in the technology used for retrofit?

Need investment in training to not only train new recruits but also upskill

A wealth of skills is needed to deliver retrofit

key themes

We should focus on the social value of retrofit to attract people into the sector

Retrofit is a long term career opportunity

Ask anyone involved in retrofit and one of the big current problems they will highlight is the lack of availability of labour. There is a shortage of good skilled people, and our own experience is that there is a current shortage of people to work on measures such as EWI, alongside other specialisms in the retrofit process at the scale that is required.

Partly created by the short-term stimulus of delivering publicly funded schemes over a defined short period of time, we are seeing a growing increase in competition for good skilled labour. This coupled with increased demand for materials is creating an interesting dilemma for those involved in retrofit at the moment.

It is clear we need to attract and train more people, not only for the need to deliver retrofit now, but also to deliver the volume of retrofit work we have identified needs to happen over the coming decades. Whilst work has been going on to make homes more energy efficient for a while, this focus on retrofit is to all intents and purposes a new industry in its infancy. And it is an industry that is going to have a big social impact.

One of the issues that we have witnessed in construction and the repairs market is the growing gap between newcomers to the sector, the welcomed increase in the number of apprentices entering the sector and the very skilled labour, we have become reliant on who have been in the industry for a number of years but are now beginning to retire. The sector’s workforce is generally an ageing demographic, and we have to understand that there will be a lot of experience that will be lost to the sector over the period of time we need to deliver the volume of retrofit we have outlined.

The challenge for the sector is to build robust succession plans to manage this transition effectively. The positive is that we have a good understanding of what we need and what we are likely to require. We know the end goal we are working towards.

This should allow us the ability to define clearly what we need and allow us to work with other parties to help build the infrastructure that allows us to define and implement a robust skills plan for the sector.

When plotting a skills roadmap, it is important to identify that a wide range of skills will be needed to successfully implement retrofit. Whilst as we have previously noted it can be viewed as simply upgrading a physical asset, when looking at retrofit a lot more than just trade skills will be needed.

We have spoken previously about the importance of data. This means we will require data scientists and software engineers. This is alongside people who can help engage, explain and communicate the benefits of retrofit to obtain buy in from residents, more of which we will discuss in our engagement chapter.

Retrofit is multi-faceted and needs broad skills. It is in its infancy as a sector so can define its own journey. Looking beyond the upgrade of the physical asset it will have a big positive impact on human life, bringing with it a large element of good, positive social impact. We should be using this to market why it is a sector of the future and

8.Skills

a career path of choice for people who want to make a positive impact on the communities they live and work.

It will require some significant investment to deliver a skills roadmap that can deliver retrofit to the c29 million buildings that require it by 2050. But this should be viewed as a positive investment which pays back in both economic growth potential and the increase in social value as well as its contribution to a healthier environment.

This will need to involve an element of training new people to the sector, but also the upskilling of existing workers. This again provides an economic opportunity to many, that could be lost to the sector. Retrofit provides the chance for some to extend their career. The volume of retrofit work that needs to be delivered provides the ability to create an economic stimulus which will be beneficial to the country in the long run.

Industries and sectors evolve over time and retrofit will be no different. Whilst we have seen the technologies involved to date remain relatively static, the growth of innovation together with applying learnings from increased volumes of work will help shape the sector to adapt to future changes. That means we will need to see greater agility in the sector to move and adapt with change.

As has been noted elsewhere, the role of standards will be very instrumental in the delivery of net zero. This will need to be applied across the field of skills as well. Continuous learning and personal development will become a key factor.

We believe that to succeed on the retrofit challenge there is a need for a clear skills roadmap for the sector. Organisations like The Retrofit Academy * have been clear in their ambition – to drive the development of 200,000 retrofitters nationwide by 2030, but we know the sector needs many more. Estimates suggest we are likely to need close to 500,000 trained professionals.

When we look at that total number, we can begin to see the economic potential that exists for the sector. As we have said these will be multifaceted roles which will require specialist skills and will stretch across several areas including heating, insultation and wider building design and maintenance.

There is a need for the education sector to feed into the professional skills that will become a lifelong learning opportunity. We will need a strong base level of technical skills to be instilled. This will take time to introduce, and as we have noted time continues to move quickly with the volume of work only reducing fractionally. Collaboration and a shared understanding of the skills objectives will help all stakeholders.

With a clear understanding of the challenge (the volume of homes to be built and retrofitted), a timeline of targets (e.g., all social housing to be EPC “C” rating by 2030) and the ultimate objective of net zero by 2050, we should be able to plot our pathway. This is from a perspective of what needs to happen, in what quantity and by when, together with the resource plan that is needed to deliver it.

Frameworks of plans should evolve as circumstances change, but having a clear set of parameters to start from is a good place to start. The interesting and exciting part of this is that these could really become the skills of the future, and a lot of the roles that will ultimately deliver retrofit do not exist now. They will emerge over time as the volume of delivery becomes clear. What the quantity of work does allow for, is for individuals to make retrofit a career for life if they want too.

Well-qualified individuals with well-paid rewarding roles will have positive impacts in local communities. It will not only be the legacy of their actual and physical work that will benefit communities, so will the economic input they can have.

When looking at attracting new talent into the sector we must recognise that the wider social

housing sector now is struggling with perception. Harrowing stories of residents living in adverse conditions punctuates the news and in some terribly sad cases have led to people passing away. This gives people a view and image of the sector and when you are looking to attract talent that can impact on decisions made by individuals. People tend to want to work in something they are proud of being associated with.

As we have outlined, retrofit does make several positive benefits for both the environment and the communities it takes place within. It can contribute positively to ways of lives as well as to the value of properties. It allows residents the opportunity to save money on their heating and help with the management of other priorities they might have in this current economic environment, including spend within other parts of the economy. It can create wealth and growth for our wider economy, expand the sector itself and create positive legacy infrastructure and behaviour to benefit future generations as well. In brief, it can add a lot to social value. This is about a lot more than just commercial gains. You will find a growing emphasis on social value in many government and public sector contracts. But what does that mean?

According to The Social Value Portal **– social value measures the positive value businesses create for the economy, communities and societies.

When placing retrofit against these parameters you can see why it scores highly against these measures.

Therefore, for the attraction of talent, we should play heavily on the positive impact retrofit will play in so many lives. We hear that for millennials and Gen Z they are driven by social issues, so we have the perfect storm to attract them into an area that desperately needs new talent and skills but also has the potential to deliver healthier, better ventilated, and warmer homes for many, which also reduces impact on the environment. One of the issues many of them care deeply about.

This provides an opportunity to counteract the current perception of the social housing sector. And it is important that we build advocates and voices from this new generation of workers to attract more into the sector.

For many, working in housing is a vocation. We perhaps do not make enough of this when both planning for the resources we need and for how we present the career opportunities outside of the immediate sector audience.

Despite the growth of AI and we recognise that technology will play an increased role in the delivery of retrofit and the building new homes, people will remain at the heart of the sector. We can see the volume of work required, and we understand that there is a wealth of skills required to deliver retrofit so we should not be afraid to shout about the opportunities and the level of positive change that can be delivered.

*The Retrofit Academy https://retrofitacademy.org/

**Social Value Portal https://socialvalueportal.com/ resources/what-is-social-value/

Discussion questions:

• Is there a shortage of good skilled people at the moment to deliver on retrofit demands?

• What can be done to attract new people into the sector and a career in retrofitting?

• How best do we reskill people to work in retrofit?

• What kind of skills are needed to deliver retrofit?

The sector needs to show its attractiveness to private investors

A long-term approach to funding retrofit is required

key themes

Housing sector has a number of competing funding priorities

We need new funding models and approach to deliver retrofit

Whenever we talk about net zero or decarbonisation the elephant that is always in the room – is one of cost. How much is this going to cost? Can we afford to do this? What is the return on investment?

This comes from both an operational and personal perspective. Numerous surveys have shown that people are becoming increasingly concerned by the effects of climate change and want things to happen and happen at pace. But that is tempered with a reluctance to pay a lot of money themselves to effect change.

This creates a dilemma. We know we have to do things. We know we have to change, but we don’t really know or understand how we pay for the change.

Whilst this transition will create economic opportunity it cannot be ignored that it will also come with a heavy price tag. Today most

of the low carbon alternatives to fossil fuel powered technologies are more expensive. That cost is shrinking as technologies evolve and commercialise further, but they are still more expensive at this time, so a longer-term view is required.

We are faced with the question of who pays for the transition.

At the outset we need to state that the cost of net zero can’t simply be borne by the public purse. No one government can fund the transition entirely. It will have to be funded through a combination of public and private finance. Indeed, the private sector will fund most of the transition. * This requires the business and economic models to facilitate this need to be compelling.

Social housing needs to position itself as an attractive asset to invest within.

When we look specifically at social and affordable housing and its decarbonisation journey, we should recognise that a lot of money has been made available to the sector through public schemes and programmes. We commend the government for the certainty of funding they have provided recently through schemes like the Social Housing Decarbonisation Fund, Home Upgrade Scheme, Public Sector Decarbonisation Scheme, Great British Insulation Scheme, Eco+, and the Green Heat Network Fund amongst others. But if we look at the cost of retrofit then we can see the importance of private finance to this work.

Research by Savills ** for the National Housing Federation showed that the cost of decarbonising existing housing associations housing stock would cost at least £36 billion. The Climate Change Committee *** have estimated that an investment of about £250 billion will be needed to fully decarbonise all homes by 2050 across the UK.

This highlights that government funding needs to act as an anchor for activity but will require private sector finance to deliver on the quantity

of work involved. It reinforces the request from the private sector for the importance of a consistent policy framework to work within and plan against. The level and value of investments mean they will have to be long-term in nature with defined payback terms.

These funding solutions must work in tandem to benefit both a public and private sector perspective. Wave 2.1 of the Social Housing Decarbonisation Fund is a good example of how this can work in operation. On announcement of the successful bids, the government highlighted that it was providing £778m of funding under the £800m tranche, with an anticipated additional £1.1bn in match funding. This shows how government funding can work as a lever and a multiplier effect to bring in further private sector investment.

As we write, there is visibility on government funding at the present time with £80m of Wave 2.2 coming to market. With the announcement just before Christmas 2023 of the intention of Wave 3 to be delivered beyond 2025, this builds additional certainty for the sector.

We understand the volume that has been committed to this parliament, and we also have seen signs of what the government wants to invest in the next parliamentary cycle. Long term certainty is vital in the scale of programmes we are talking about it. That requires consistency and consensus around policies to support the wider decarbonisation agenda and ultimate UK target of 2050.

Elections can naturally mean a change of government, and that means new plans and policies. To provide true confidence for investment decisions long-term plans and visions are required so that people understand their commitments. It is why a political consensus about climate change and the work required to adapt and mitigate its challenges has been so important.

The government is legally committed to the 2050 net zero target and the 2030 (68% reduction) and 2035 (78% reduction) targets

with roadmaps in place for delivery. But it is the detail in the policies to deliver these specific reductions across multiple interconnected sectors that is important to identify and articulate so they can be resourced and funded accordingly.

A more stable policy landscape will provide greater confidence to allocate funding actively. It will require a mosaic of solutions including public and private funding streams.

There are natural conflicting priorities for spending when you are operating in a harsh economic environment which we have in the last few years. On the desk of a finance director at a housing association it is not just a bill for retrofit and decarbonisation activities they have to fund. There are many other competing needs – tackling damp and mould, fuel poverty, ongoing building and fire and safety concerns – to highlight but a few. All are major capital investments that need to be made to not only keep up with ongoing operations but also invest in the growth and future of the housing portfolios they operate.

The job is not made any easier when we are also facing periods of increased inflation, continued interest rate rises (in large to curb inflation) and rent rate caps which means the pool of finance available has to work harder with real headroom pressures being placed on the capital that is available for investment.

Harsh economic environments can and do drive short-term focus and thinking, the tackling of the immediate challenges. When faced with the net zero transition, this is a question of a longterm programme of activity (at least a quarter of a century out to 2050) that is going to require long-term funding solutions to be in place to support.

When considering these conundrums, we should not lose fact that it is called a transition for a reason. We have highlighted the scale of what we are trying to change so it reinforces the need for long-term planning. Whilst milestones will be part of these long-term plans, we should

9.Funding

be aware that budgets and funding that are allocated (whilst appreciated) can cause some intense issues when they have to be spent in distinct timeframes. This is amplified when external economic factors (such as inflation) have real adverse effects on initial budgets presented at proposal stage against the reality of a delivery stage.

To deliver a long-term change programme which decarbonisation is, we therefore need long-term finance structures and investment plans, that reflect and understand the return on investment might be longer in nature that what has been the norm in previous times.

To effectively deliver low carbon housing we are going to require a real consistency in funding streams. These models should be balanced and borne of pragmatism and reflect the long-term nature of the programme they are supporting. The effects of climate change have the potential to radically impact the value of assets in housing. Therefore, the value of retrofit investment in the assets – the homes themselves – must be seen in the long-term value they will hold against a potentially altered environment. The home has to be sustainable in the long-term to hold its value, and as we have seen so many of the homes in situ now will be homes in 2050 as well across all tenures.

This means that we need a new approach and new funding models to deliver retrofit at the scale that is required. Retrofit does not readily fall into normal credit parameters. Against this backdrop there needs to be a broader discussion to better understand the value of investing in retrofit will provide. It simply cannot be measured just in immediate financial returns but has to include the wider social impact that itself will help drive further economic activity.

This thinking must be long-term in nature. Given the volume of work that needs to be delivered it becomes important to create working environments that avoids any shortterm scrambles for funding to deliver. We need to be able to plan with certainty and confidence to deliver the right solution. 2050 should be

the lens that we continue to look at everything through and the value of assets (the homes themselves) should be measured against this yardstick.

There is a need to look at new long-term borrowing parameters to make the borrowing itself more efficient against the retained value of the asset because of the retrofit work undertaken against it. Models should be developed that are linked specifically to retrofit and the payback that greater energy efficiency of the home can provide.

Given the volume of private sector finance that is available it is important that housing has a good story to tell investors and highlights why investment in the home and a home that is both low carbon in operation and in construction (when we look towards new build) becomes an attractive asset to hold.

In addition, the value created to the wider economy and communities from good effective retrofit programmes must be a key consideration for investing. It is important to recognise the need to adapt to our changing climate and the extremes weather patterns might throw up if we do not address. The insurance bills for “cleaning up” after weather events are becoming greater and are also putting a strain on the insurance market as well. So collaborative thinking across the piece is again needed to ensure we can all benefit.

The economic prize in both what we can create and what we can save is huge. We should not be blind to this, but it will require a new way of thinking and approach, long-term in its aspiration and nature.

*WWF/E3G Unlocking the economic opportunity of the 21st Century through private finance https:// www.e3g.org/wp-content/uploads/Unlocking-theEconomic-Opportunity-of-the-21st-Century-ThroughPrivate-Finance.pdf

**Savills Decarbonising housing associations’ homes to cost £36bn, according to National Housing Federation https://www.savills.co.uk/insight-andopinion/savills-news/320272/decarbonisinghousing-associations--homes-to-cost-%C2%A336bn-according-to-national-housing-federation

***House of Commons Business, Energy and Industrial Strategy Committee – Decarbonising heat in homes https://committees.parliament.uk/publications/8742/ documents/88647/default/#:~:text=The%20CCC%20 estimates%20that%20an,on%20average%2C%20 under%20%C2%A310%2C000.

Discussion questions:

• What is the cost for retrofitting social housing in the UK?

• What is the impact of government funding schemes on the retrofit market?

• Why should people invest in retrofitting?

• Can you put an economic value on retrofitting for a resident?

10.Collaboration

Should

expand the impact of collaborative bodies like NHDG and the National Retrofit Hub

Only achieve when everyone reaches net zero, in our interests to work together Volume of retrofit means it can’t be delivered by isolated parties

key themes

Break the perception of any competition this is a collective challenge we need to overcome

When we talk of decarbonisation – no one technology, no one government, no one organisation can deliver it in isolation. It is too big and the energy system and economy too interconnected to deliver in silos. It requires partnership and it requires collaboration to deliver it. Including service providers to the social housing sector.

This is as pertinent to retrofit as it is to any other part of net zero activity. We have identified the numbers involved. That requires partnerships and collaboration to deliver upon.

Retrofit cannot be delivered by isolated parties, the scale of work to be undertaken is too big. To date the sector has seen collaboration, but it has come about almost in an organic manner. A collection of like-minded individuals driving it forward for like-minded organisations as the volume of retrofit work has grown and evolved. So, collaboration does exist today, but is still not enough and it tends to happen in pockets. Programmes like the Social Housing Decarbonisation Fund have driven the need for collaboration. To be truly effective, collaboration needs to become front of mind and a businessas-usual approach to retrofit work.

We talked in the skills chapter about how we need a variety of skills to deliver effective retrofit. That means we also need a number of parties to work together to produce the solutions we require and produce them at scale.

Whilst individual properties will have nuances, retrofit to an extent can be classified a common problem. One that is common to housing providers and homeowners alike - how to make the home energy efficient and low carbon in operation?

If we are all facing the same challenge, does it not make sense to share our own knowledge so that everyone can benefit? Especially when we are talking about a solution that should benefit everyone mainly because we all share the same environment and the natural resources that support it.

It is not a case that you can afford any privilege because of your wealth. The natural resources are the same for everyone. What wealth does allow is the volume you can consume. Emissions do not discriminate; they are a byproduct of consumption and use.

Given that we are sharing the same set of challenges, it is hoped that people can see this as a combined effort, not a competition. Because of the cumulative consumption of resources if we can increase the level of collaboration then hopefully, we can drive accompanying cultural change. A shift to zero/low carbon should not be seen as a burden but instead an aspirational state that we all want to get too.

Both large and small service providers face the same challenge. We should not discriminate between them, rather we should work together. At the end of the day net zero is a national target not an individual organisational target. This is quite a change of mindset to respond too but one that true collaboration should be able to deliver.

We have stated before, the volume of work that needs to be undertaken is known. At present it is safe to say for operators in the sector and the

wider supply chain there is enough work for all. This is an important aspect to understand. Time will be a constant challenge in the net zero transition, and it makes sense not to distract ourselves by looking to compete with each other. Rather we should pool knowledge, skills, and funding to deliver the greater goal.

This requires leaving behind the notion that there is a competition to complete programmes first and replace it with one that focuses on the need to complete all programmes for all to benefit, given the wider human and economic benefits of retrofit.

As a large organisation and a big player in this market, we understand that we have a key role to play in developing this culture of collaboration. We are drivers behind a number of projects, and we should constantly challenge ourselves to use our knowledge, our resources and our network to share widely learnings on how to undertake and deliver retrofit projects effectively. Hopefully this report is an example of that in action.

It would be safe to say that the sector is still operating today in a hamster wheel of competition. When considering the cultural change, we are talking about here, we must be mindful of the language we use. Some of the funding schemes that are made available use the terminology of competition, successful bidders, winners etc. This can create the wrong impression and reinforce behaviours that we need to overcome to deliver the full retrofit programme that the country needs.

How do we encourage this increase in partnership and collaboration across the sector? The sector needs champions. It needs clear voices to provide consistent messaging around retrofit, its impact and its value. This is to position retrofit as an aspirational activity that improves residents’ lives. Like too much of the conversation about net zero or sustainability at the moment it is framed as a burden, as an inconvenience, most notably around the cost of its implementation.

Speaking with a consistent positive voice will help people understand better that we are all facing the same issues, but the solutions lie within the sector itself to deliver. One way to speak with a collective voice is through collaborative bodies.

We are proud to be a founding member of the National Home Decarbonisation Group. * This is a membership body of retrofit service providers, construction companies and repairs, maintenance and investment contractors who are delivering large-scale, high-quality energy efficiency retrofit installations in a PAS 2035 compliant manner to all tenures of UK housing. Focusing in the areas of skills development, support of innovation and informing policy development the grouping provides a forum for the sharing of best practice in technical, operational, and strategic collaboration towards the shared goals of UK decarbonisation.

Having a group that is focused on the subject of retrofit is powerful. It will provide specialist conversations to support the wider sector voices of organisations such as the Chartered Institute of Housing ** and the National Housing Federation *** who themselves are working closer together on sector wide challenges, over and above that of decarbonisation.

What is important is that the impact of these

10.Collaboration

collaborative bodies is expanded. Because of the common challenge it is important that learnings are shared and can be absorbed by many. Collaboration to succeed requires an open and transparent approach, which means that people are open and willing to share their experiences for others to learn from.

This should also be from a perspective of not only sharing what works well, but also identifying what did not work so well. For many the most important lessons come from understanding what does not work as well as what does work. Culturally this can be difficult as people do not like to highlight things that have not worked, but it can prove highly beneficial, especially if it avoids people investing limited resources unduly.

Open and honest sharing of information will act in a similar way to the development of standards. If people work with a clear shared understanding it will allow for greater volume of activity to be undertaken and people and systems can benefit from economies of scale in operation.

This might sound like an idealistic way of looking at the challenge, but it is driven by one factor.

We can only reach decarbonisation and net zero when everybody reaches that level. The benefits come when everyone has reached the same goal. There is no competitive advantage to achieving whilst others fail in this matter. This is because it is the level of emissions that will determine the level of impact that climate change will deliver. Therefore, it is in our interests to work together to get this number down for a better outcome for all.

What this ultimately needs to succeed is the breaking of the perceptions of competition. Not something that is easy. We recognise that that is difficult and a big ask but is something that needs to be addressed if we are to enable true collaboration.

Climate change and the resultant net zero transition is change at an unprecedented scale. To deliver we are going to have to think and operate differently. It will be easier if we do it together rather than apart.

*National Home Decarbonisation Group https://www. nhdg.org/

**Chartered Institute of Housing https://www.cih.org/

***National Housing Federation https://www.housing. org.uk/

Discussion questions:

• What are the barriers to partnership working that we need to overcome?

• How do we encourage greater collaboration in the delivery of retrofit?

• How best do we share learnings (of what works and doesn’t work) for the benefit of the sector?

• Do funding schemes encourage greater collaboration and partnership working?

Retrofit is technical in nature, but it has a real human impact

Need clear standards for all to use, to create a consistent approach to retrofit

key

themes

Need wider levels of dissemination of learnings across the sector

Standards can drive wider change than subsidies

How do we look to design effective retrofit programmes?

We should look beyond the simple single property approach and look towards the wider impact of retrofit to inspire our thinking and approach. The benefit of retrofit does bring with it an individual benefit to the resident or homeowner, but it is the cumulative benefit to the community that should drive our overall approach, as this is where the greater impact is felt.

Given the tenure of our housing, especially in the social and affordable sector we are looking towards retrofit activity that takes in a number of properties at a time, rather than properties in isolation. Our plans need to reflect this.

A collective approach also helps with the engagement approach (more of that in our next chapter) but it allows the opportunity to show the benefit of retrofit on a larger scale and buys into civic and community pride. Data will help us to engage. It will allow us to clearly amplify the benefit to communities evidencing the health, financial and wider economic benefits

of regeneration the programme investment will encourage.

If we are not careful then we do run the risk of over complicating retrofit.

No one is decrying that it is not technical in its delivery but too often we use technical language to explain to non-technical people what we are seeking to achieve with retrofit. It is important that we are able not to lose sight of the clear overall objective of retrofit – to produce healthier, warmer, better ventilated, more efficient homes which are better for an environment. This should be the sell and the overall objective of any programme design. It is centred on the resident. If we stay true to it, it will help with the engagement and implementation of the programme.

PAS 2035 is the British Standard for retrofitting dwellings outlining how retrofit projects should be managed and delivered. It is a specification for what many call a “whole-house” or a “whole-building” retrofit. Essentially this means that it focuses on measures which take into account the whole building. According to BSI * it specifies requirements for the retrofit of dwellings, including assessment for retrofit, the identification and evaluation of improvement options, the design and specification of energy efficiency measures and the follow on monitoring and evaluation of completed projects.

These standards are welcome, driven by quality, but they are also very complicated. It is an excellent base but how can we make them understandable to all? Acceptance of the components of PAS 2035 requires a change of approach from landlords and delivery partners to ensure they comply fully with the standards requirements and with public funding stipulations also linked to PAS 2035 delivery, clear understanding is vital. This is a change process that must be managed by the sector.

A commonality of approach and language with a clear set of guidelines, standards if you wanted to call them that, gives everyone a clear shared goal to work towards. With a clear level of standards in place will that make it easier for the sector to deliver at scale, as it understands clearly what is expected and required of it? Also, a clear set of standards or guidelines helps to remove any form of the subjective. To put another way, the more mystery that is involved, the greater the opportunity that can lead to greater than needed costs.

To reach a clear level of standards, collaboration within and across sectors is required. Learnings need to be shared – between landlords and residents and across service providers. Given the interconnected level of our energy system, this should not put any barriers up.

Initiatives such as the UK Net Zero Carbon Buildings Standard ** is aiming to set out the metrics by which net zero carbon performance is evaluated aligned with science-based trajectories needed to achieve net zero by 2050 and will be applicable to existing and new buildings.

What is important is that these new standards complement existing guidelines and work in a complementary manner rather than create new differing approaches which will not be adopted by all in a wholesale approach.

This requires wide levels of dissemination across the sector of learnings from both the delivery projects and then how they perform once the project is complete. This is the collaboration approach again, and the willingness to be open and transparent for greater rather individual

benefit. This is important because as we have made clear the challenge is one of scale and volume rather than individual properties.

The design should always be driven by the end outcome, in this case reaching net zero in a manner that improves the residents lives, rather than what works best for a single organisation.

*bsi PAS 2035/2030 https://www. bsigroup.com/en-GB/standards/pas-20352030/#:~:text=PAS%202035%20specifies%20 requirements%20for,monitoring%20and%20 evaluation%20of%20projects.

**UK Net Zero Carbon Buildings Standard https:// www.nzcbuildings.co.uk/

Discussion questions:

• What impacts the design of a retrofit programme?

• How essential are resident needs to the successful delivery of a retrofit project?

• What can encourage greater levels of dissemination of lessons learnt from retrofit activity?

• How easy are current standards to interpret for effective retrofit delivery?

Tenants and residents have to understand what is in it for them

Understand the resident, their needs and their motivation around retrofit

key themes

Landlords and service providers have experience in engaging residents, use their knowledge

Use simple “human” language

How do we get people interested and then excited about retrofit?

It requires open and honest conversations. We have highlighted the level of change involved with retrofit, so we should be clear and engaging with people as to what it means for them, what it means for the wider community and then what it will mean for the wider environment.

The best place to start is not with a series of engagement tactics but with a period of education. This should be focused on what is meant by retrofit and the outlining of its associated benefits. We started this report with a look at what retrofit means and we highlighted how it can have a number of differing outcomes for so many different parties. This needs explaining.

Underlying this activity will be the creation of trust.

We know that retrofit will bring disruption with it, it can’t be avoided. So, the resident has to trust the motives behind the action. If they do not understand why this is happening, then that can cause problems. This means we have to identify

and understand their own motivations. Retrofit can provide many benefits and so we should match the benefit to the motivation to make this an experience the resident is willing to advocate about. It can be about the perspective that we look at this. We should view from the resident perspective, not the act of retrofit delivery. Change can be daunting for people. What on paper what might look a win-win is not always that if the end recipient has no understanding why it is going to make a difference to their lives and is not simply an inconvenience.

This will be particularly relevant to retrofit. Whilst we want to get to a stage where we hope residents are demanding retrofit to happen we have to ensure that people do not feel that retrofit (or any other service) is something being done to them. They have to be part of the process so, we have to carefully manage that relationship and the dialogue with a clear consistent language.

It is important that tenants and residents understand what is in it for them. Therefore, there is an important role to help explain the why and not simply the how. We talked in the previous chapter about the danger of falling into the technical language trap of retrofit, this is even more important when it is presented to the resident. Retrofit is a process with a clearly defined end benefit, which has to be explained and explained in language that resonates with a resident. It is different to the discussion in the boardroom.

People are individuals and as such are motivated by different things. This needs to be remembered when looking at both education and engagement strategies.

For something that is focused on energy efficiency and reducing carbon emissions it is very easy to fall into the trap of only talking about these aspects when talking about why people should engage with the process. As we have noted earlier, people are worried about the climate and want to do something about it, but it might be that they don’t know exactly what to do

about it and don’t want to pay too much for it. With the current economic environment there are several priorities people are trying to satisfy. One of the problems is that they have competing priorities and behaviour inevitably gets dictated to by economic circumstances.

However good effective retrofit can solve some of these wider issues, reducing bills, improving health, and therefore thought needs to be given to motivating factors and communication and engagement matched to those audiences.

From a net zero perspective it is the end outcome (reduction of carbon) that is important, not the motivator used by people to engage in the process. This means again a “one size fits all” does not work as an engagement process.

Detailed work needs to be done to understand people’s motivations for acting. Once this is understood messaging and engagement should adapt accordingly. It is important to articulate what the hook is for people. There are a number of different motivational factors which can be employed, and they will resonate differently with different people. Given the experience social housing landlords and service providers have in resident engagement they should be contributing to defining the channels of engagement employed. Indeed because of the trust gained locally they should also play a pivotal role in the delivery of the engagement. It will involve building both staff and resident awareness of net zero and retrofit. The aim should be to make this language and approach business as usual. Today it is currently seen as something new or difficult to achieve.

We should also reflect on the language we use when discussing retrofit. We must be aware that the overwhelming majority of people are not thinking about retrofit everyday and therefore will not be familiar with industry and technical terms. We should aim to speak “human” about the subject, not layer it with technical and economic language. We are driving this programme of change for people’s health and the improvement of the environment we live

within. Therefore, lets paint the picture and tell the story of how we can achieve this in language that they clearly understand.

It is also important that we do not alienate people through this activity.

As we have commented upon earlier, this is change on a massive scale. We should take time to consider and understand how people react and engage with change. We must be careful not to alienate recipients of retrofit services or residents throughout the process. We want resident so be our advocates for undertaking retrofit so we must combine understanding their motivation and talk to them in a manner they understand and will react to.

This will include the use of different channels and mediums to get the message across. Not everyone is digitally literate, not everyone will speak English as their first language, some people will want face to face discussions. This goes to show that good communication and engagement is one of the skills disciplines needed to deliver retrofit effectively, and again creates opportunity for some to shape a career within. The careful use of language and the medium used to deliver the message all aims to build trust in the process. Once trust has been developed it is then that the practical work can take over.

Engagement should also not stop once the retrofit work has been completed. In our data chapter we stressed the importance of post occupancy evaluation to understand how people engage and use the new renewable technology. Likewise, communication and engagement strategies are needed to follow through the process and continue to build trust with the resident and then use the hopeful positive experience to use them to converse and promote retrofit to their peers, which is where the strongest trust really resides.

Engagement needs to be as well thought out as the practical implication.

We cannot just focus on a message of emissions reductions to change people’s behaviour and we need to explain clearly why retrofit can reduce some of the wider concerns people have about heating and the health of their home environment. We should be flexible in the way we get to reducing carbon not fixated on how we persuade people to partake in retrofit but instead focus on celebrating successes and learning from our mistakes.

Once again, we should look not to over complicate and concentrate effort on using language that resonates with people.

A large focus and emphasis should be put on promoting the successes of retrofit and use these successes to develop advocates to help explain what is “in it for them” to their peers to nudge and help change behaviour when it comes to retrofit. There is no stronger form of credibility than someone who is living with the benefit.

Discussion questions:

• Does retrofit boil down to a question of trust?

• How can we learn from previous engagement programmes?

• What channels should we use to engage residents in retrofit?

• How do we create retrofit advocates?

13.What other housing issues could retrofit solve?

• Retrofit provides a platform for integrated asset management

Should take a wider holistic view to housing challenges and avoid tackling each aspect in isolation

key

themes

Retrofit can provide a solution to wider housing issues such as damp and mould

When we look at the to do list for an asset manager in housing today there are a wide range of issues they need to address. Today, carbon reduction and tackling damp and mould are key strategic challenges that housing providers are grappling with, but should they be looking at them in isolation? Can retrofit provide a solution for damp and mould as well as for other housing issues, whilst reducing the level of carbon emissions used in the heating of our homes.

We have identified that retrofit is not just a benefit to the physical property itself, it provides benefits to an individual’s life. And it does not just stop at the individual either, it can have multiple positive benefits to the wider community as well.

If we use the thermal efficiency, fabric first approach to a building, the work undertaken will ultimately help to combat damp, mould, and condensation problems because the framework of the building will have been improved. Making a building breathable, well-ventilated and with healthy indoor air will provide wider health benefits to residents.

In essence, effective retrofit can provide a longterm solution to the home and its operation. It is not simply a sticking plaster, more a targeted fundamental intervention in the operation and structure of a building that will repay its investment in a number of ways.

We should not underplay the health benefits of retrofit. This ultimately is why we are undertaking the work in the first place. Warmer, better ventilated homes will lead to better health and a diversion of demand away from the NHS.

According to the House of Commons Library, * cold homes are costing the NHS £1.4bn every year on treating illnesses associated with living in cold or damp housing.

Many people are worried today about how they can pay their energy bills. That is placing an untold pressure on people’s mental health. The ability to make their homes warmer and cheaper to run can have a positive effect on this situation and it is one that is probably not quantified at the moment as we are living through this cost-ofliving crisis.

There is a wider benefit to the asset – the property itself. It makes the property sustainable and therefore able to retain its value as an asset. Its benefits run far and deep.

Effective retrofit should improve the disrepair timeline of housing portfolios. It should reduce the repair time of properties and reduce the number of voids in existence. It adds up to a calculated intervention in the property that should provide value for money, covering the investment required for retrofit by delivering long-term and cyclical benefits. If we get this right with the right retrofit intervention, it should mean that disrepair should not happen. This should improve the economic benefit of investing in retrofit activity. It is the act of good strategic asset management.

The benefit can reach beyond the individual property as well.

Communities can recognise the benefit of retrofitted properties. The physical economic

investment into the community with retrofit works will also produce wider benefits. There is a broader benefit on the physical environment as well – providing better air quality, healthier environments to live and work within to help regenerate areas.

Good retrofit should also reduce the turnover in residents, because it will provide a home that people want to stay in and want to make their home for a long-time. This outcome should produce a win-win for the housing operator and most importantly for the resident themselves. A holistic view to housing concerns that uses retrofit as a key intervention to tackle a number of issues provides a platform for integrated asset management and net zero. This allows for better management, monitoring, and maintenance of physical assets (homes) across the portfolio. By taking a wider holistic view it can create a position to help to tackle the either/or argument of competing priorities in stretched economic environments. This is because the investment and its return can be better modelled as the benefits are shared across a number of streams. If each individual aspect is looked at and treated in isolation it can create additional cost and challenges that could otherwise have been avoided.

The holistic whole building approach of PAS 2035 looks at the whole building allowing a “futureproofing” approach which should in theory reduce the level of follow up investment needed in the property.

Like we said at the opening of the report, net zero is a systems challenge which requires a whole systems solution. So, retrofit is a whole building challenge which should be solved with a whole building solution, that also provides whole building benefits.

The wider benefit of personal and community benefits should also be heavily highlighted when seeking to engage residents in a retrofit programme. People have emotional attachments to their homes, but they have stronger attachments to their family and friends so if they see a direct reward and return for investing in retrofit activity, they will provide strong advocacy to others to undertake the action.

It is a combination of activity that produces a combination of benefits to tackle a combination of housing challenges. Retrofit can be a catalyst for change and should be part of the wider housing conversation not limited just to one about net zero and carbon emissions.

*House of Commons Library – Health inequalities: Cold or damp homes https://commonslibrary. parliament.uk/research-briefings/cbp9696/#:~:text=Each%20year%2C%20the%20NHS%20 spends,in%20cold%20or%20damp%20housing

Discussion questions:

• What can we learn from retrofit to embed into other housing challenges?

• Should we focus beyond just the property benefit to the personal benefit and the wider community benefit as well?

• What is good integrated asset management and what is the role of retrofit within it?

Conclusions

and

recommendations to deliver effective retrofit?

As we have written this report, some themes have become very clear. When they are written down, they seem quite basic, but that is part of the dilemma about the net zero transition. We do not deny that the delivery of solutions will be difficult and technical in nature, but we run the risk of over complicating the vision of what net zero and what retrofit should be.

Retrofit is about improving lives. It is about improving the viability of the asset (the home), it is about invigorating the community – it is at the end of the day about healthier, warmer, better ventilated, cheaper to run homes – that do not damage the environment.

To achieve these aims we recommend that:

Retrofit is delivered through long-term planning and thinking

Given the volume of homes that need to be retrofitted in both the social and affordable homes sector and beyond, it can only be achieved with the support of long-term policy support. 2050 is the end target date, this is over a quarter of a century, so frameworks need to be established that recognise this and help manage the transition in a cost-effective and just and fair manner over this period.

Base decisions on retrofit on evidence

Invest in and ensure you get your data right. Without this retrofit activity could cost more and the benefits it can provide not fully recognised. All that can be asked is that

decisions taken are based on evidence and not driven by ideology. The decisions should be technology agnostic and focused on the end outcome for the property and its resident.

Retrofit is viewed as a volume challenge

Recognise that we are currently behind the curve and focus efforts on making retrofit a sector that works at pace and at scale. Any further delay will cause wider problems and avoid adding to the retrofit challenge with poor new build practices.

Retrofit is viewed as being more than just technical Whilst the application of the measures to the property are physical and technical in their nature, do not lose sight of the positive impact that

retrofit has on the resident, providing numerous benefits both financial and health related to individuals and communities.

Standards drive behaviour They have the potential to have a bigger impact than any financial subsidy, because they can drive consistency across everyone’s work. For this to work the sharing of knowledge and an open approach to collaboration is key.

Break any perception that retrofit is a competition Place a clear focus on collaboration and view the actual target as the total number of homes the sector needs to decarbonise, not just those of an individual housing provider. This will

identify that there is enough work for everyone and that working in partnership will bring mutual benefit.

We concentrate on using clear communication and language

Let’s demystify the retrofit process, removing where possible technical language to increase understanding of what retrofit is trying to achieve. Let’s also position it in an aspirational manner as well.

We engage tenants by focusing on their needs Retrofit should not be about what organisations want residents to do, rather we should focus on encouraging the motivations of residents to undertake the process. The importance is the end outcome – in a net zero

capacity that is the reduction of carbon emissions, but it might not be residents’ main motivation. Let’s accept that is ok. If it is to save money, make their homes warmer then let’s focus on that as the engagement method.

New funding models are created

Based on a long-term calculation of the value of the retrofit investment. Essentially if properties are not future proofed to adapt to climate change their value will drop. Invest now for the future.

Make retrofit and the social housing sector appealing

To highlight how retrofit is a growing industry and one that has a strong future, emphasising why it should be seen as a viable career

choice for the future.

Place an emphasis on the social value of retrofit Both to attract residents to participate in the programme, but also to act as a mechanism to attract new talent into the industry and the sector. Show people the true value of their work, not just through a financial microscope.

Housing providers take a holistic view Don’t isolate housing issues. Use retrofit as a mechanism to deliver true integrated asset management which will provide multiple benefits in an economic model that is ultimately cheaper than if each issue was tackled separately.

www.mearsgroup.co.uk