Progressing towards net zero by decarbonising housing

At Cop 26 in Glasgow last October, world leaders pledged to end deforestation, move away from coal and curb methane emissions, amongst many other revised targets.

Now, in 2022, it’s time to focus on action and progress, and for the UK that means remaining resolutely focused on achieving net-zero by 2050. To be successful in this goal, we must look at housing.

The Committee on Climate Change released their Fifth Carbon Budget last year, which states that 40% of UK emissions come from households. This means our homes have an important part to play if we are to achieve net-zero and we must all look at the impact of heating, electricity, efficiency and waste. In England alone there are five million homes that are either council-owned or managed by registered providers. So, the public sector has a huge task ahead to ensure that these homes are energy efficient.

The government, in its Clean Growth Strategy, has set the target for all social housing providers to attain the minimum rating of Energy Performance Certificate (EPC) C for rented properties by 2035. However, according to the Green Alliance, only 29% of homes currently meet this standard: They say that: “The UK has the least energy efficient housing stock in Europe. This means high energy bills and, for the poorest, a stark choice between heating or eating.”

Government data suggests that about 1 in 5 households living in social housing experience fuel poverty which is caused by low incomes, energy inefficient homes and energy prices. 3,000 people die each year from the cold as they are unable to afford to heat their homes, and with energy prices sky-rocketing this winter, it’s a huge issue that we must address.

Better insulation and ventilation will make homes warmer and cheaper to run. So, creating more energy efficient homes can improve people’s lives. This requires building greener in the first place, but also retrofitting around 15 million homes to bring them up to the required standard.

Effective decarbonisation must start with data

So how can the public sector approach this mammoth task, when it comes to their public buildings and social housing? At Capita, we’re combining our technical knowledge of construction and energy efficiency measures, with our experience of delivering large-scale projects to support public sector organisations to decarbonise their buildings. We know that the best place to start is by developing a phased data-led plan that firstly focuses on the families in greatest need.

Traditionally EPC data is used to measure energy performance of a property. But it is a theoretical energy use based on standard assumptions on fabric losses and lifestyle, not on actual bills. Two families in identical houses could have very different lifestyles and energy use but have the same EPC rating. Also, EPC data does not tell you if a family can afford fuel. That’s why using property, household and energy usage data will tell you where your most urgent priorities are, as well as saving time and money.

At Capita we understand both data analytics and smart metering exceptionally well, having implemented the national smart meter data communications infrastructure into 24 million homes. In future, social housing providers may wish to pay suppliers (or get paid) on results of actual energy use, not a predicted use based or EPC data.

Bring tenants on the journey with you

Naturally, if decarbonisation plans are going to impact a tenant’s home or their local community, they are going to have many questions. It’s crucial to bring tenants on the journey with you by explaining the specifics of how their homes will become warmer and greener and how their energy bills will change.

From my own experience of helping to create a seven-acre near net zero carbon community, I have seen that decarbonisation is an issue that really captures peoples’ imagination. It can animate every aspect of community development, so it’s important to offer tenants choices around the design, landscape and community facilities, such as the kind of green transport and ecological characteristics that they would like to see. This will generate real enthusiasm and ‘ownership’, around the concept of a net zero energy community.

Explore all funding opportunities and be submission-ready

The zero-carbon ambition should be an integral part of your business and overall investment plan, so you’ll need to pursue every scrap of funding available. You will be used to managing multi-funded workstreams, which in addition to your ‘normal’ applications to Homes England and the One Public Estate programme, could now benefit from access to government grants, including the decarbonisation fund for Heat Networks or the Social Housing Fund. It’s also possible to receive cheaper loans based on the avoided energy costs. For, example some mortgage companies offer reduced rates for low energy buildings, as well as access to loans from environmental, social and corporate governance (ESG) investors.

The Social Housing Decarbonisation Fund (SHDF) has committed £3.8bn over the next ten years, and many people think that there will probably be more. However, even if your bid is successful, the grant is £10-£16,000 per house, yet the cost to retrofit a house to a zero-carbon standard could be as much as £30,000. That means that you’ll need to develop a convincing business plan to cover all costs.

The benefits to people and planet are worth fighting for

Achieving healthier, energy efficient homes will benefit your tenants and the planet. It can also deliver you long term savings.

A report by Verco & Cambridge Econometrics also found that there are wider national benefits, stating that a national retrofit programme would result in £3.20 of increased GDP and £1.27 of tax revenue for every £1 invested in energy efficiency.

There is also the creation of ‘green jobs’ to consider, helping to realise the government’s ‘levelling-up’ agenda. Zero energy construction can help to train skilled, local people; creating enterprise and reducing costs. That’s a prize worth fighting for.

At Capita, we’re very conscious of the financial pressures and regulatory obligations that you face, and how important it is to enable projects to achieve the zero-carbon standard at minimal extra cost, often in order to allow them to go ahead. We’ve supported many organisations with their funding applications and business plans, and in addition are developing new funding solutions with other public sector clients.