Getting Retrofit Done

By James Gemmell, sustainability and retrofit expert at Holmes Miller architects

If I had my own soapbox on which to stand and deliver a ‘call to arms’ on retrofit, I could use it to tell you the construction industry creates 40% of the UK’s carbon emissions, 80% of all buildings that need to be net zero by 2050 are already built, and 11% of households are in fuel poverty - but I won’t because (as the industry has been shouting about these statistics for the past 30 years) I’m guessing you’ve heard them all before.

A lot of retrofit ‘carrots’ and a great deal of ‘sticks’ have already been tried, in the form of guidance and legislation, from PAS 2035 and 2038 to the RICS Residential Retrofit Standard and the UK & Scottish Climate Change Acts.

Carbon emissions are starting to fall, but much more slowly than the rate of increase in the production of white papers, reports, calculations and reviews on the subject. Ideally, the more we talk about carbon emissions, and the better educated we become, the more quickly those emissions should reduce. But that’s not happening.

So instead, I’d use my soapbox to broadcast a different message – that perhaps we need to stop talking so much about retrofit and start actually doing it.

As a passionate retrofit expert, what I have witnessed over the past decade is an increasing level of both enthusiasm and understanding. When our team delivers presentations, hosts workshops, or corners people at drinks receptions, the feedback is always positive. The problem comes when they see that pesky little number in the bottom right-hand corner of the retrofit report. While this number varies from project to project, it is somehow always too high!

While it’s commendable that Mrs Miggins swaps her ailing gas boiler for a heat pump, tackling one or two houses at a time will not get us to our national or local net zero targets. Instead, we need to tackle one or two estates at a time, retrofitting at scale. We must continue to persuade the Hubs, the local authorities, the housing associations, the NHS, the BBC, and the estate managers.

"Ah but....." I hear you cry, "what about that large number you mentioned before?"

As we all know, neither local nor national governments have the necessary funds to embark on community or estate-wide retrofits. Recent budget announcements and green pledge U-turns have further dampened expectations. It is imperative that private investment is brought into the picture. But, due to memories of PPP and PFI, local authorities may be particularly nervous when the term "private finance" is mentioned, making any fruitful discussions that much harder.

It is, therefore, heartening to see Glasgow City Council forming a Green Investment Team which will spend the next two years developing the council’s relationship with the private sector to help fund their retrofitting ambitions. This follows similar schemes set up by Bristol City Council and the Greater London Authority.

Holmes Miller is also working with several partners on a financial framework that will help our clients with retrofitting their estates. The first step involves detailed research into what public funding is available, which is an ever-shifting world. Some grants focus on heating, some on fabric-first approaches and others on carbon reduction. We will compile a detailed list of available grants, what they are for and their deadlines, to help clients bring in as much public money as possible.

As part of our estate retrofit analysis, we will also investigate district heating, PV and battery storage systems. Many local authorities have feasibility grants available for this work. PV and battery storage can be used for grid balancing, which can bring in further income. The price of electricity is measured on a half-hourly basis so, for example, when the wind is battering the windows at night, the client will be paid to take electricity from the grid. This can be stored in the battery array and then be used during the day.

After these two steps, any remaining investment required would then be delivered by a finance company and ultimately by the likes of a pension fund. An annual return is then calculated and paid over an agreed term.

For example, let’s take an estate where the existing fuel bill is £10m per year. Retrofitting would reduce this annual bill to £3m, but the work costs £300m – an off-putting figure.

However, you might be able to bring in £100m in public monies and grants, reducing your private investment figure to £200m (or with 5% interest, £210m). If this is paid back over a 25-year period, the annual return would be £8.4m.

If you can bring in £1m a year through grid balancing, the annual fuel bill saving becomes £8m, resulting in a net annual payment of just £400k – a lot less scary.

In return for that investment, there are a myriad of benefits. Your estate is now much more efficient, healthy and has an extended life expectancy. The carbon emissions and fuel bills are significantly reduced while the reliance on fossil fuels is virtually eliminated. The building users are less tired, so they are more productive. It no longer overheats in summer, and you don’t need five layers of clothing and a hot water bottle in winter. In your child’s school, the pupils' learning ability has increased; Margaret’s asthma is much better; Johnny’s eczema has cleared up; your arthritis is easier - and ultimately, everyone is happier.