Existing homes account for 99% of the domestic building stock in an average year, around 26m properties. Current trends in new build towards zero carbon can therefore do little more than help prevent overall domestic carbon dioxide emissions, accounting for 27% of total emissions, from worsening, with deep cuts in emissions only possible through refurbishment.
A detailed report* this summer by Gavin Killip of the Low Carbon Futures programme of the Environmental Change Unit, Oxford University and the current consultation on existing homes led by the UK Green Building Council (see SB20, p.3), are therefore of critical importance in informing new policy measures needed.
Since 2003, several scenarios and computer models have been developed establishing possible routes to a low carbon future for existing housing stock, with cuts of 60-80%. In addition to existing technology, most of these involve use of higher cost technology not as yet considered attractive, and major investment in new low carbon and renewable energy capacity.
However, the ECI report notes that one BRE scenario assuming mainly enhancement of current measures and technologies, including “a 100% uptake of the insulation measures currently supported by government programmes, a large-scale switch to biomass and electric heat pumps for heating, and a halving of the emissions factor for grid electricity”, led to a 60% emissions reduction by 2050.
Clearly, with additional technologies and measures, a 60-80% reduction is possible, subject to a scaling-up of current programmes, backed up by funding of selected new technologies and generation, it suggests.
However, the reasons for lack of greater action to date also need to be identified and eliminated. The ongoing UKGBC consultation, intended to “identify barriers to further progress and assess what solutions have already been proposed”, will also inform upcoming Government consultation on energy efficiency, and its subsequent Low Carbon Homes strategy due in spring 2009.
£30bn lost opportunity?
Killip points out that: “UK housing is among the worst in Europe when it comes to energy efficiency – which means there’s plenty of room for improvement. Bringing British homes up to standard is possible using existing technology but the skills and industry base to deliver the necessary change is under-developed.”
A key challenge with the refurbishment sector is that it encompasses a much wider array of smaller stakeholders, many of these different to those in the new build sector, so that a comprehensive programme will be harder to plan and implement than for new build.
Measures on reduced VAT for energy efficiency works have been demanded many times since the oil shocks of the 1970s, but few doubt the lack of political influence from the sector relative to new build has been a major factor - until now.
New imperatives, notably arising from the Climate Change Bill, forthcoming Low Carbon Homes Strategy, and Carbon Reduction Commitment are at last beginning to change the rules of the game. The ECI report says it is vital that the existing cost-effective ‘measures-based approach’, limited in both funding and time, and eventually subject to uptake saturation, must continue for the present, but that mainstreaming such change in the longer term must rely more on a ‘standards-based approach’.
Much tighter standards are already required in social housing projects, accounting for 20% of total stock in 2008 according to DCLG. While the focus has been notably on new build, the potential influence on upgrading refurbishment standards and rates is very large, and could have a much wider impact across the market, for example through Registered Social Landlords.
Major challenge
The ECI report, supported by the Federation of Master Builders, now with a membership of 13,000 businesses, assumes the need for an 80% CO2 reduction by 2050. It notes that a coherent long term policy and signal similar to that now evident in the new build sector “is needed in the refurbishment sector in order to give industry sufficient confidence to make the necessary investments to begin to meet the challenge”.
Smaller construction businesses are typically involved in repair, maintenance and improvement (RMI), with £23.9bn a year spent on RMI works to existing housing, with most of this opportunity for low-carbon refurbishment being lost, to say nothing of the large, parallel black economy. Killip estimates the additional market for energy efficiency upgrades could inject another £3.5bn to £6.5bn a year.
Given that many FMB members have already said they are turning to renovations to survive, with many of these only having enough work to last to the end of the year and looking to pull out of the market, it is clear new measures are urgently needed to protect both the market and preserve the capacity to meet future targets. It is also clear that the 500,000 low carbon refurbishments a year needed to meet target reductions by 2050 are likely to be beyond the capacity of the existing RMI sector to deliver, let alone with a downturn.
The ECI report therefore stresses that “investments are needed in training and skills just as much as in the development of products and supply chains”.
It says measures should capitalize on the increased visibility and incentive for action offered by EPCs in the sector, and introduce regulatory changes through the Building Regulations requiring consequential improvements during renovation, itself leading to major market opportunities.
While consequential improvement requirements were dropped from the current 2006 regulations, the report notes that one local authority, Uttlesford District Council in north-west Essex, has introduced the principle where planning permission for refurbishment is sought, for extensions and conversions. It has had no apparent impact on planning permission for refurbishment, though limited to the most cost-effective options, suggesting major potential if added to updated Building Regulations, Part L.
Quick wins?
In the short term, much can be done through EPCs. The ECI report says these could provide the reliable, accurate information necessary for upgrades, particularly once rental properties are covered from October. However, it points out that 97% of EPCs have been calculated using the quickest assessment method, the ‘reduced data Standard Assessment Procedure’ (rdSAP), which “does not capture the true performance of advanced low-carbon refurbishments”. These technical shortcomings need to be rectified urgently, but while a crucial prerequisite, are unlikely even then to lead to wholesale market transformation in themselves without other major measures.
Several other current measures are capable of delivering far more, but are generally unambitious. The Carbon Emissions Reduction Target (CERT) obligation on energy firms to invest in home energy efficiency tends to lead to a narrow focus on lowest cost solutions. The only standard applying to existing homes is the Decent Homes standard for social housing, providing for vital improvements to kitchens, bathrooms, central heating, and a potentially major role in energy efficiency upgrade. However, energy efficiency requirements are set low, with minimum loft insulation thickness set at just 50mm compared to 270mm recommended depth, it says.
The new Green Homes Service, providing one-stop advice currently focused on the worst performing households, could be far more effective if EPC data collected could be used nationally for monitoring housing stock, to target improvement advice and programmes over a much wider range of circumstances, it says. The Low Carbon Buildings Programme has had notable successes, but is very limited in scope, and its future remains in doubt. Uptake rates for Low- and Zero-Carbon technologies (LZCs) remain very low compared to Germany, and even Spain, amounting only to an estimated 107,000 homes.
One possible reason for this is the lack of a much more widely available low interest loan scheme comparable to those in Germany. Such a scheme could complement, not replace expanded grant schemes concentrating on the fuel poverty issue. Green mortgages, private specialist loans and carbon offsetting products are still a minute proportion of the market.
The replacement of the EcohomesXB voluntary standard by a more demanding Code for Sustainable Existing Homes covering refurbishments to match that for new build is overdue, it says. Such a voluntary standard could then be promoted through the new Homes and Communities Agency from 2009, pump-priming innovation through the social housing sector.
Fiscal reform measures are frequently demanded, with reason. Cutting VAT levels to 5% from 17½% was associated with increased growth rates in the construction sector from 14% in 1999 to 25% a year later, reducing pressure on greenfield sites and increasing employment on the Isle of Man (see box). On CERT insulation subsidies, the ECI report notes that British Gas found take-up rates “rose from 15% to 60% when the subsidy was in the form of a rebate on Council Tax as opposed to a direct grant”, and adjustments to Stamp Duty to encourage upgrades is also proposed.
Buildability
Mainstreaming sustainability considerations in refurbishment in an integrated way must be the ultimate aim, with legislation seen as the key driver, but this is a long way off. EPCs and other legislative measures are seen as an opportunity by SMEs, but they also complain of the need for far better information to act on them. Consumers also need better access to information covering economic benefits as well as sustainability performance of a bewildering array of options.
The complex networks of cooperating trades in the sector could be applied to a more effective ‘whole house’ approach to upgrade if this barrier is addressed, for example by EST through trade associations and use of regional networks, it says.
In the longer term, the building trade will need to go through a major learning curve to successfully exploit the opportunities offered, aided by a major training drive that will only materialise if the demand is there.
However, perhaps most important of all, the services they are called upon to deliver must be seen as practicable, that is quick and easy to deliver, replicable, affordable, reliable, sellable, available on time, guaranteeable and profitable – or they will fail to be implemented. “Buildability” is likely to be the new trade watchword.
*Building a greener Britain: transforming the UK’s Existing Housing Stock. Killip, G: 2008. ECI, Univ. of Oxford.
www.buildingagreenerbritain.org.uk/index.aspx; www.eci.ox.ac.uk; www.fmb.org.uk; www.ukgbc.org; www.gov.im/treasury/customs/notices