A welcome strategy – but 30% of homes will still miss the target

The publication of the heat and buildings strategy last week was a relief. Already delayed by eight months, recent briefings had suggested there were major arguments within government about how far a Tory administration attempting to deal with the economic fall-out from covid-19 and Brexit should go to implement its ambitious green agenda.

Many wondered if we would ever see the strategy. Thankfully, I think the imminent COP26 summit helped to concentrate minds and we ended up with a document which sets out a wide-ranging set of policies and commitments aimed at decarbonising our buildings and laying the foundations for net zero buildings in the UK by 2050.

And it is indeed a “foundations” type strategy, mostly nudging forward existing programmes in energy efficiency and clean heat, but with nothing that could be called radical. “No one will be forced to remove their existing boilers”, the minister reassured readers, while announcing the main headline initiative: a new boiler upgrade scheme with £5,000 grants to help homeowners towards the cost of buying heat pumps.

Unfortunately, even a quick bit of maths shows us that the money for heat pumps is not going to go that far. At £5,000 a pop, the £450 million allocated for three years in the boiler upgrade scheme will probably cover a maximum of 90,000 heat pumps (30,000 a year) – just 5% of the official target of 600,000 a year by 2028.

Even if all the policies are as effective as we hope, that still leaves us with a third of homes in England alone left languishing in the lowest bands

And, towards the back of the strategy, there was another interesting admission. The majority of our homes are low performing properties with an energy performance certificate (EPC) rating of C or below. The heat and buildings strategy explained that “the policies outlined in this document could bring up to 70% of the English housing stock to EPC band C or above by 2035”. So, even if all the policies are as effective as we hope, that still leaves us with a third of homes in England alone left languishing in the lowest bands.

So how do we increase the impact of our investment in decarbonisation, and what do we do about that missing 30%?

I think the government is right when it points out, right at the start, that the journey to net zero buildings starts with better energy performance, and that means ensuring that buildings are energy efficient before a mass transition to low-carbon sources of heat. I just wish this was better reflected in the heat and buildings strategy actions.

The widely-accepted “whole building” approach to energy efficiency means looking at reducing energy demand from all elements of the building, not just its heating. The insulated fabric of the building needs to be improved, windows, lights and appliances improved, controls improved, ventilation improved.

All of the jigsaw pieces needed for a truly fit-for-purpose home energy efficiency programme – such as a robust assessment infrastructure and standards framework – are already available, but the strategy only pulls some of those pieces together. 

There was absolutely nothing in the strategy about a national retrofit programme, well researched and called for by groups such as the Construction Leadership Council, which could ensure this sort of whole-house low carbon makeover.

Instead, for this sort of energy efficient retrofit activity, we will still need to look to the public sector. Indeed, most of the heat and building strategy’s £3.9 billion is definitely being targeted at social housing and public buildings, where councils and housing associations will be relied on to do the heavy lifting on energy efficiency for the foreseeable future.

All eyes now turn to the chancellor’s autumn statement this week, and the hope that some sort of fiscal incentive might be added to the mix

There are several interesting proposals out for consultation or soon to be decided, including ideas to mobilise mortgage lenders in encouraging investment in energy efficient homes, new regulations to force private landlords to do more to help tenants out of fuel poverty, and more use of minimum standards to improve commercial buildings too.

But all eyes now turn to the chancellor’s autumn statement this week, and the hope that some sort of fiscal incentive might be added to the mix to encourage more energy efficiency measures for the millions of homes left untouched by the heat and buildings strategy. There are suggestions of a return to a lower VAT rate on energy-saving materials, previously made impossible by the EU, for example. Maybe even a replacement to the green homes grant.

So I am not hanging all my hopes on the heat and buildings strategy. It was good news to see something published, but it clearly does not have all the answers we were hoping for.

It feels like we still have a disjointed, piecemeal approach to energy efficiency programmes and the way they are funded. And, until this system is addressed, I fear we are going to fall short of our net zero targets.

Stuart Fairlie is managing director at Elmhurst Energy, an independent provider of energy assessment training, software and accreditation