Retrofit is a good idea, but it needs to be done well if it is to be done at all.
The idea of a green recovery from economic crisis is not new. Many jobs are currently under threat, and the government is borrowing and spending vast sums of money to shore up the economy. Surely it makes sense to invest in creating ‘green’ jobs that will help tackle climate change.
Several reports have come out during the Covid-19 pandemic arguing that green renovation of existing housing provides the biggest benefits in terms of jobs growth and emissions reduction. Green renovation (‘retrofit’) can reduce energy consumption in homes by 60% or more, while simultaneously improving occupant health, comfort and well-being.
But the green jobs numbers are just an initial sketch, not the full picture. Key to making this work is understanding and managing the risks involved for different groups of stakeholders.
Role of construction firms
Construction firms – especially the small and medium-sized firms – are key to delivering retrofit. They have more influence over renovation projects than anyone. What the installer advises basically gets installed. For the green recovery idea to work, these influential people need to be willing and able to change their advice and their working practices. But that is not trivial. Construction firms are the ones who get called back if things don’t work properly, so they tend to stick with tried and trusted products and materials. There is no significant demand for greener solutions, so for builders there is no reason to take on the extra risk.
Innovation in construction requires an understanding client, and a bit of extra time and money. In those conditions, new ideas and ways of working may be welcomed enthusiastically. But most projects are not like that. Construction is generally a low-paid, low-prestige sector, where customers are often slow to pay and quick to complain. Project teams are also adept at passing the buck and blaming others when things go wrong, instead of working collaboratively to make things right.
Many firms in the wider construction supply chain had their fingers badly burned with the failed Green Deal policy, which was abandoned in 2015. They invested in training and new business processes on the promise of a wave of retrofit work, which simply did not materialise. The UK has a history of a stop-start approach to ‘green’ policy, where sudden withdrawal of government support leaves firms and individual workers being hung out to dry.
Investing in retrofit
Access to capital is important for retrofit. Early retrofit pioneers used private savings or extended mortgages to finance projects, but that will not work for the majority. Banks and other lenders see the potential of investing in retrofit, but they need schemes for installer accreditation and building energy ratings, against which they can measure the risks of lending. Energy Performance Certificates can provide the building ratings (although they need reform to improve accuracy). But installer accreditation is largely missing. The current fragmented and voluntary system for installer accreditation needs replacing with a proper set of occupational standards. And if retrofit is to be achieved at any meaningful scale, those standards need to be mandatory. Retrofit means quality assurance; quality assurance means a competent workforce with a minimum level of training; and compulsory training means a regulated labour market. No longer should it be possible for directors of firms (including the self-employed) to operate in the market without qualifications. Such reforms need to be handled well, with support in place for training, apprenticeships, and the employers who take on apprentices. Getting it wrong could mean mass job losses, not jobs growth.
Commitment to long-term change
Many of these risks ultimately come back to the need for government to show leadership and a commitment to long-term change. Reforms are needed in labour markets, vocational training, finance, energy performance certificates – and more besides. The need for coordination across several government departments adds yet another risk.
Retrofit of existing homes can bring all kinds of benefits to residents, businesses and local communities – but the job of mobilising the many different stakeholders should not be under-estimated. Retrofit is a good idea, but it needs to be done well if it is to be done at all. And that need for quality requires consistent leadership and policy commitment to transform a whole economic sector. It won’t happen quickly though, which makes it all the more important to make an early start.
Banner photo credit: Ronstik on Adobe Stock