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Building on our strengths: A market transformation approach to energy retrofit in UK homes

21 July, 2021

Building on our strengths: A market transformation approach to energy retrofit in UK homes

Gavin Killip

Tina Fawcett

Marina Topouzi

Faye Wade

Report   Policy & Governance

Gavin Killip, Tina Fawcett, Chris Jofeh, Alice Owen, Marina Topouzi, and Faye Wade

Executive summary

Energy retrofit must become embedded into the everyday practices of builders working in the repair, maintenance and improvement (RMI) market if we are to significantly reduce carbon emissions from housing and achieve net zero carbon emissions by 2050.

Policy efforts to develop energy retrofit have not delivered the scale of activity needed to meet climate policy goals. Firms operating in the RMI sector are ideally placed to carry out energy retrofit. However, recent policy initiatives have not served the sector well.

Opportunities for improving the energy efficiency of the nation’s homes are routinely missed because they are not planned for. These ‘trigger points’ represent around £11bn of RMI works each year. A policy mix is needed to help deliver a changed market for retrofit, so that it becomes a normal activity, sought by households and delivered by competent builders, supported by supply chains, intermediaries and other local stakeholders.

Research question

  • How can the market for repair, maintenance and improvement be transformed so that opportunities for energy retrofit are integrated into everyday practice and market activity?

Research methodology

For this report, academic researchers, industry experts, the FMB and their members have joined together to develop a system-wide approach to understanding the role of the RMI sector. Through discussion with those operating in the sector, the report identifies specific recommendations for policy makers and industry bodies to support the RMI sector in delivering energy retrofit.

Key findings

  • The market for retrofit must be transformed, supported by a policy mix including minimum standards which improve over time, better information for householders and financial incentives.
  • Occupational standards must also be transformed,equipping the workforce with the necessary competence to carry out retrofit. Skills can be acquired through on-the-job training as well as via colleges.
  • These alterations must be made together, in order to deliver a changed market for This will enable retrofit to becomea normal activity, sought by customers   and   delivered by competent builders and installers, supported by supply chains, trade bodies, and other local stakeholders.
  • The work would create significant numbers of new jobs in every UK nation and New roles and professions will emerge as energy retrofit becomes mainstream.
  • Policy is also needed to support change among other relevant stakeholders outside the construction sector; a cross- sectoral ‘systems thinking’ approach is needed.
  • Place-based demonstrator programmes are a suitable way to develop the market (as is happening in Wales and Scotland), and it is crucial that these form part of longer-term policy support.

Recommendations

There is no simple policy ‘fix’ for housing retrofit. A joined-up, cross-sectoral approach is needed with several key features: a commitment to creating a long-term market; developing finance mechanisms to leverage private investment; improved quality and competence based on a licence to trade; and space and funding to trial innovative approaches in the real world.

Policy to create a long-term market for retrofit

Building Standards need to be tightened, and existing support for monitoring and evaluation needs to be developed.

  • Building Regulations need to return to a regular cycle of revisions and be tightened over time to gradually improve the energy efficiency of homes.
  • Local Authority Building Control needs to be better resourced in order to provide all-important compliance and advisory services for the industry.
  • Energy Performance Certificates (EPCs) need to be reformed to improve accuracy and credibility, based on good-quality building surveys and design software. Recommendations in EPCs should be based on key trigger points and informed by how consumers make. decisions in the RMI market.

Finance and fiscal measures

A package of financial and fiscal measures are needed.

  • Reducing the VAT rate on all RMI work to zero or 5% in order to disincentivise cash-in-hand deals in the parallel, unregulated economy and to reduce the costs of retrofit for property owners.
  • Strategic use of public sector investment to pump-prime the market and lever in private For example, government-backed loans should provide thenecessary capital up-front, with repayment schedules that allow universal and fair participation.
  • Providing and supporting funding mechanisms (grants, loans, green mortgages) to support owner- occupied, privately rented and socially rented homes.

Improvements to retrofit quality and workforce competence

The existing RMI workforce are crucial for kick-starting retrofit at the rate and scale needed. To support the workforce:

  • A licence to trade should be introduced for the construction By applying the licence to the firm, not the individual, there would still be employment opportunities for all.
  • A broad foundation course in buildings and energy should be integrated into all construction training so that trainees have a common basis of understanding before specialising.

Supporting new approaches

Space and funding is needed to foster new approaches to energy retrofit.

  • A series of real-world field trials should be carried out in all regions to test and refine innovative processesand practices, using real homes, occupants, supply chain firms and local authorities (similar to the Optimised Retrofit Programme in Wales and the Energy Efficient Scotland programme).
  • Innovative building information management ideas, such as building renovation passports, should be trialled.

Publication details

Killip, G., Fawcett, T., Jofeh, C., Owen, A.M., Topouzi, M. and Wade, F. 2021. Building on our strengths: a market transformation approach to energy retrofit in UK homes. Federation of Master Builders and Centre for Research into Energy Demand Solutions.

Banner photo credit: Alireza Attari on Unsplash

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