Retrofit: Domestic buildings

The refurbishment of our homes and buildings is one of the greatest challenges we face to reducing carbon emissions. The majority of our existing stock requires some level of retrofit to enable us to live and work more sustainably. Refurbishing the existing housing stock will be key to reducing the UK's carbon emissions so that we can achieve our ambitious carbon reduction targets.

Our existing housing stock

The UK's housing stock is amongst the least energy efficient in Europe, and is responsible for nearly a quarter of our annual carbon emissions. In recent years, this has driven an ever-increasing focus from both Government and the private sector on finding ways to help households save money on their bills, reduce their emissions, and make their homes warmer and more pleasant places to live.

Information for householders

If you are a householder looking for information about how you can improve the energy efficiency of your home, the Energy Saving Trust website is a good place to start your search for advice.

Home energy efficiency as a national infrastructure priority

In the run-up to the 2015 General Election, UK-GBC is collaborating with 19 other charities, environmental groups and trade associations to raise the profile of energy efficiency and challenge the parties to make bold commitments in their manifestos. Together we are calling on all political parties to:

  1. Make home energy efficiency a top infrastructure priority
  2. Support investment with a long term revenue stream
  3. Achieve 1 million deep retrofits each year by 2020

At a Parliamentary event in June 2014, this broad coalition published a joint report setting out these three asks and summarising the economic benefits of energy efficiency retrofit. Download the joint report.

The Green Deal

The Green Deal is Government's flagship energy efficiency policy, aiming to drive improvements in millions of UK homes at low or no up-front cost to the customer. Launched in January 2013, the Green Deal is the Government's flagship retrofit initiative. It is a market-based mechanism which aims to overcome three major barriers to home retrofit: a lack of upfront finance; the availability of reliable information about which measures to install, and the low levels of consumer confidence in the building supply chain.

Green Deal Finance

The scheme is designed around a 'Pay as You Save' model with private finance being provided to meet the up-front cost of Green Deal-eligible energy efficiency measures. The householder receives this up-front finance in the form of a loan which is paid back by savings made on their energy bill. But, unlike a normal loan, the responsibility for repayments is attached to the property's energy meter rather than the householder. This means that if the current householder moves out, the repayments are passed on to the next occupier who is now benefitting from the installed measures.

A key aspect of the scheme is the 'Golden Rule', which states that repayments should not exceed the expected energy bill savings from the installed measures. The Golden Rule is intended to ensure that householders are not worse off because they will not be paying more for their combined energy bill and Green Deal repayments than they had been on their energy bill alone before the measures were installed.

Green Deal Assessments

A home energy assessment is needed before measures can be installed under the Green Deal. The Green Deal Assessment rates the current energy performance of a property and provides the householder with information about potential energy saving measures that would be eligible to receive a Green Deal loan.

Green Deal Accreditation

Measures available under the scheme must be installed by an accredited Green Deal Installer and the loan offered by a registered Green Deal Provider company. Green Deal Assessments also need to be carried out by accredited Green Deal Assessors. This accreditation framework is intended to ensure high quality installations and assessments and provide householders with a complaints and redress process if there are problems.

Green Deal Home Improvement Fund

The Home Improvement Fund is an incentive scheme which offers householders cashback for installing certain energy efficiency measures. Householders can receive £1,000 for installing two from a list of twelve eligible measures, or can receive £4,000 for installing the more expensive solid wall insulation. More information is available on the DECC website.

Green Deal Communities

The Green Deal Communities fund allocates money to Local Authorities to help drive local programmes of home energy efficiency. These Local Authority programmes are intended to drive interest among local residents and encouraging the installation of measures under the Green Deal or funded through the Energy Company Obligation. Local Authorities can find out more about how to get involved in the Green Deal here.

Our involvement in the Green Deal

The UK-GBC has been involved throughout the development of the scheme and played a key role in developing the "Pay as You Save" model. Since the launch of the Green Deal we have continued to work with Government to shape its development, and to help members play a leading role in its delivery through roundtables and events.

We are keen to ensure that there are sufficiently strong incentives for businesses and households to take up energy efficiency measures (including via the Green Deal), and to create a compelling market opportunity for industry. Our Retrofit Incentives report outlines proposals for the three most promising options - variable stamp duty, variable council tax and an energy efficiency feed-in-tariff.

Another priority for UK-GBC is reducing the interest rate charged on Green Deal loans. Interest payments have a direct impact on the amount that can be borrowed by each household and higher interest rates can make more expensive measures ineligible for Green Deal Finance. Our Green Deal Finance report examined the impact of high interest rates charged on Green Deal loans and explored options for reducing these charges.

Energy Company Obligation (ECO)

The Energy Company Obligation (ECO) policy sets targets for the major energy suppliers to deliver energy saving measures to households. The delivery of ECO is funded by the energy suppliers via levies on household energy bills. The targets are split between delivering bill savings to low income households and making carbon savings through cost effective measures. ECO subsidies was originally intended to be combined with Green Deal finance to fund more expensive measures, but in practice this blending of finance has been largely unsuccessful. Find out more about ECO here.

Minimum Energy Performance Standards (Private Rented Sector)

From 2018 it will be illegal to rent out the least energy efficient properties, under regulations due to be introduced in 2015.

The private rented sector (PRS) has the highest proportion (11%) of homes with the lowest energy efficiency rating (those in energy performance bands F and G).  By comparison, less than 2% of social housing is F and G rated.

The 2011 Energy Act placed a duty on the Secretary of State to introduce a minimum standard for private rented housing from April 2018 at the latest. The regulations underpinning the Act were laid before Parliament on 5 February 2015 and are expected to be passed before the General Election.

Under the proposals, properties which are EPC band F or G will be required to undertake cost effective energy efficiency improvements, defined as measures which can be funded under the Green Deal or ECO. This will apply to properties at the beginning of a new tenancy from 2018 and will be extended to all rented properties from 2020, although exemptions will be granted where a sitting tenant refuses the works.

The Government's proposals for the regulations are available here and the draft legislation can be found here.

UK-GBC welcomed the laying of the draft regulations. Our full response is available here.

Renewable energy Feed-in-Tariff (FiT)

The Feed in Tariff (FiT) is the primary financial incentive to encourage uptake of renewable electricity-generating technologies in the UK. Most domestic technologies qualify for the scheme, including solar electricity (PV), wind turbines, hydroelectricity, anaerobic digesters, and micro combined heat and power (CHP). The electricity supplier pays the generator a generation tariff for any electricity generated and, where applicable, an export tariff for any surplus electricity exported to the grid. Domestic properties are required to have an EPC rating of D or better to be eligible for the full payments. Find out more about FiTs here.

Renewable Heat Incentive (RHI)

The Renewable Heat Incentive (RHI) is intended to encourage uptake of renewable heat technologies among householders. Participants of the scheme are offered fixed payments over seven years for generating and using renewable energy to heat their homes. The scheme supports heat from biomass boilers, heat pumps, solar thermal collectors, biomethane and biogas. Properties are required to have meet basic insulation requirements to be eligible. Find our more about RHI here.