Our Roadmap to 2030Last month, the Department for Energy Security and Net Zero released the much awaited Warm Homes Plan. Dr Beck Collins gives her thoughts on the plan below.
View the full Thought Leadership Report on SWM Members Portal Library
During a recent SWM project training council officers to ‘action plan’ for large scale home energy retrofits, I was really struck by the conclusion of one of our speakers[1] that retrofit needs to move away from focusing on the fuel poor, and instead focus on the ‘self-financing’ sector. The argument was that this would lead to the sort of scale of activity that could drive down prices and make retrofit a sustainable market, in a way that ‘stop start’ grant funding for those in fuel poverty had not managed to achieve. Retrofit needed to be repositioned as something that the financially secure wanted to pay for themselves, rather than something that ‘poor people’ must have given to them because they have no other option.
It’s an uncomfortable argument in some ways (sidestep a tangential rant about the place of class and stigma in British society, and its perils for sustainability discourse!) but hey, the last ten years of small pots of unconnected and insufficient funding haven’t got us anywhere, and anyway the Treasury has limited funds, so maybe it’s time to try something different? I do see shiny extensions going up on people’s houses – you know, open plan, kitchen islands, brass effect cupboard handles, rooflights (I want a rooflight) – people must be borrowing for this, right? Would they borrow for retrofit? What would they get – don’t people want something new for their money? Insulating walls and lofts isn’t sexy – you start with a wall and you finish with a wall. There are no delicious pictures on Instagram of this type of thing (unlike those kitchen islands). If we’re borrowing a few thousand pounds, we want a shiny new toy to show for it, right?
The Warm Homes Plan is fully leaning into this. It is prioritising the decarbonisation of heat and power over and above reducing demand. It wants to help consumers access heat pumps, solar panels batteries, and it is putting serious money behind that – £15bn. I applaud this. Yes, there will be grants available to support the cost of heat pump installations through the Boiler Upgrade Scheme. However, critically, there is a budget of £1.7bn that will be allocated for low cost/interest free loans to pay for these technologies. The Minimum Energy Efficiency Standard for privately rented homes will be raised to a C, which along with money to support landlords to upgrade their properties will further drive the market. The cost of heat pumps has already come down by 11% since grants to facilitate their installation came in – the support through this Plan will turbocharge this process.
The plan is serious about the decarbonisation of heat and power in people’s homes – these grants, loans and mandates are being accompanied by regulatory changes to remove barriers (such having to have your heat pump 1 metre away from your property boundary), to introduce flexibility in the electricity system (to maximise the benefits of these technologies), and an open-minded attitude to the possible suite of technologies (two way heat pumps for flats that can cool in the summer!) There are of course grants for low-income households, but this focus on clean heat and power technologies as an aspirational choice for ‘consumers’ (those with more choices) will lead to scale, with all the opportunities for highly skilled jobs and British manufacturing that will go with that.
There is a ‘but’. In prioritising clean heat and power, the Warm Homes Plan deprioritises improvements to fabric efficiency. There will be support for insulation, but this will be for ‘cost effective’ insulation; i.e. loft and cavity. I understand their reasons. The cost of solid wall insulation has increased massively in recent years as a result of supply chain issues and a dearth of skilled labour. Solid wall insulation is currently suffering a bad reputation after so much installed under ECO4 and GBIS was found to be non-compliant. As such, the focus is on solar, batteries and heat pumps to reduce bills and maintain thermal comfort.
Will they though? Heat pumps work – SWM members BCU have been monitoring occupied social homes with heat pumps and found they worked extremely well even in cold conditions. However, the homes they are installed in need to have a reasonably thermally efficient fabric, or be an EPC C. Many homes do reach that level, but many don’t (the median average across England is only just in Band C). Heat pumps are highly efficient, but the cost of a unit of electricity is currently four and a half times the cost of a unit of gas, and the Warm Homes Plan doesn’t mention how it will address this ‘spark gap’ issue. What worries me with this plan is that the same people, living in solid walled houses with limited means, might miss out on improvements. Again.
The final challenge here is the importance of proper installation; heat pumps need to be well installed to work properly. Herein lies the rub when the UK construction industry is currently struggling with delivering quality – the solid wall insulation scandal demonstrates this, as do other examples in the press. The challenge of taking on trainees and delivering quality in an industry structured by short term sub-contracting is well known.
SWM members SHAP continue to push for the importance of quality in construction and in particular retrofit, and have just published their Retrofit Success Guides. SWM member Broad Oak Group are bucking the trend of subcontracting and directly employ over 350 retrofit specialists in whom they can invest. Here at SWM, we continue to support the work of the Local Net Zero Accelerator to develop further finance flows into retrofit in a place-based manner, to maximise the benefits for householders.
Ignore my flippancy about these technologies as ‘toys’. These technologies are a necessary part of the energy transition and they absolutely need to become part of the way we heat and run our homes. A radical and necessary step forward has been taken with the Warm Homes Plan to drive this forward. However, I argue that there is more to do to reduce energy demand, and reduce fuel poverty. SWM and our members are playing our part.
Dr Beck Collins, Senior Sustainability Adviser, Sustainability West Midlands
View the full Thought Leadership Report on SWM Members Portal Library
[1] Rachel Brain at Stroud District Council
