Energy efficiency: improvements in existing buildings

3 June 2016

Rob Warren discusses how to improve the energy efficiency of existing buildings

---

After the government's Spending Review in November, which targeted the delivery of 400,000 new affordable homes by 2020, you could be forgiven for thinking that the policy focus is firmly on new housing.

But old homes deserve attention too. There are around 26 million households in the UK, and they are responsible for a large proportion of carbon emissions from the built environment, as well as keeping most of the population warm through the cold weather. The energy efficiency of older houses is likely to be worse than their more modern counterparts, too – although this need not be the case if homeowners take positive action.

Energy efficiency schemes

The UK government has tried various ways to encourage action on energy efficiency. The most effective was probably the requirement imposed on the so-called "big 6" energy firms in the UK to hit carbon reduction targets, through measures such as installing more energy-efficient boilers and insulating lofts and cavities. The former Carbon Emissions Reduction Target saw almost 4 million lofts and 2.6 million cavity walls insulated. However, only 59,000 solid-wall properties were treated.

Homeowners are likely to be more convinced by measures that will clearly improve their properties

The current Energy Company Obligation (ECO) scheme was originally designed to concentrate on energy efficiency in harder-to-treat properties, though as of November 2015 the number of solid-wall installations completed was only just over 100,000. As there are around 8 million households with solid walls, there is still considerable potential for improving the energy efficiency of a significant proportion of existing stock and lowering associated carbon emissions.

The next phase of ECO is due to start in March 2017. The Spending Review suggests this will cover 200,000 houses, cutting the energy bills of each by around £300 a year. Its focus on the fuel-poor is a significant change, as ECO has up to this point also included those who are able to pay. Many households in fuel poverty live in solid-wall properties and if this new scheme targets such housing it could begin to tackle this issue. However, it may be more likely to look at the lowest-cost options first.

Solid-wall insulation

Given that solid-wall insulation is more expensive than filling lofts and cavities, it tends to be overlooked and is perhaps the hardest measure to persuade a householder to consider.

The coalition government's Green Deal, now no longer with us, showed that when enough money is offered as an incentive though schemes such as the Home Improvement Fund, installations see a surge in popularity. But as well as representing a financial hurdle, older, solid-wall properties need to be treated with a whole-house approach, offering the most appropriate solutions and taking into account airtightness and ventilation strategies to maintain good indoor air quality.

Figure 1: A well-insulated extension to an existing building

The many benefits of treating existing properties with solid-wall insulation were summarised in Solid Wall Insulation: Unlocking Demand and Driving Up Standards, a 2015 report by the governments then Chief Construction Advisor Peter Hansford.

The Department of Energy and Climate Change and Department for Communities and Local Government have now asked BRE's Dr Peter Bonfield to lead an independent review of consumer advice, protection, standards and enforcement for energy efficiency and renewable energy. There have been high-profile cases where inappropriately installed insulation has caused damage to the building fabric, and the desire to ensure this does not happen again is one of the key drivers for this review. If householders' lack of enthusiasm is partly down to the difficulty of engaging with the retrofitting process and partly due to a fear of problems that may arise from it, then the findings of the Bonfield Review, published in March, may well help.

Regulation

Another key driver for retrofitting energy-efficiency measures is regulation, but the current government is more inclined to deregulate. For instance, it chose not to amend Part L in England – the approved document concerned with the conservation of fuel and power – to introduce zero-carbon housing or require the construction of more energy-efficient extensions. The current regulation in England remains Part L 2013, which covers not just new-build but also existing housing.

Another key driver for retrofitting energy-efficiency measures is regulation, but the current government is more inclined to deregulate

Equally, the policy of Consequential Improvements for smaller domestic extensions – where any increase in habitable space would require the rest of the existing building fabric to be improved – did not appear in the most recent Part L changes for England, even though it was first considered in 2012 and is already in place for commercial buildings and larger extensions.

As this measure would have required householders to spend a percentage of the cost of extensions improving the rest of their homes, it perhaps looked too much like a tax, and there were concerns that it would damage the extensions and conservatories market.

When Wales introduced Consequential Improvements in its version of Part L in 2014, it took a more reasonable approach, stating that householders need only do what is practical, such as insulating lofts, cavities and hot water cylinders, rather than requiring them to make a specific monetary outlay. Perhaps this common-sense approach will be considered the next time Part L changes are proposed in England?

Financial incentives

Another way to motivate householders to improve their properties is appealing to their desire to save money, perhaps by linking the Energy Performance Certificate (EPC) rating of a house to some kind of discount: the more energy-efficient the house, the greater could be the reduction in stamp duty or council tax, for instance.

As this would be aimed at those who are able to pay, though, it would present policy challenges for those who rent or are unable to find the resources for the necessary improvement works. Nevertheless, changes to stamp duty would be easier to implement; as the Spending Review adjusted rates for those buying second homes, the government seems to be willing to use this as an incentive to change behaviour, and may be warming to the idea of linking higher EPC ratings with lower stamp duty.

...all the reviews, obligations and incentives in the world will struggle to overcome a significant hurdle – that householders have the luxury of choice

An area where financial incentives have long played a part is that of the Feed-in Tariffs (FITs), which are paid to householders who generate their own electricity with solar photovoltaics. However, FITs have been cut dramatically – and there is the added issue that as of 1 August, the full 20% level of VAT will apply to such energy-saving technologies, a move that would increase the cost of a typical 4kW installation by around £900. This could significantly dampen homeowners' enthusiasm for such measures.

Regulations and FITs aside, all the reviews, obligations and incentives in the world will struggle to overcome a significant hurdle – that householders have the luxury of choice. People tend to prefer a new bathroom or kitchen to energy-saving measures, probably because the former make their homes more practical and pleasurable places to live and offer a tangible result for the hefty spend.

Comfortable buildings

Many campaigns and policy proposals for existing buildings lead with energy bill savings rather than other benefits, but perhaps this is where they are going wrong. Homeowners may engage more with measures where they can experience a tangible difference for their investment, making the home a more comfortable place to live regardless of the British weather.

The idea of constructing healthy, comfortable buildings is starting to move higher up the list of clients' requirements for new-build homes. If the indoor environment is free from draughts and cold spots, can be kept at a comfortable temperature in both winter and summer and is adequately ventilated for good indoor air quality, then the occupants will benefit.

Feeling comfortable in other kinds of building such as schools or places of work increases occupants' ability to learn and be productive. The fact that home improvement measures might also save on fuel bills, increase property value and win a tax break could then be a bonus rather than the main reason for that change.

If policy, reviews and obligations provide consumers with a robust framework for home improvement through energy efficiency, this would help drive demand from the bottom up rather than the top down. The performance of existing buildings may then finally start to make progress, and move the UK away from having the least energy-efficient homes in Europe.

Rob Warren is head of Technical at Celotex