Research by BCIS has revealed a huge market potential for energy renovations in the UK, considering the energy savings and associated emission reductions, coupled with the potential of job creation.
However only a small proportion of properties can be renovated within the scope of current incentives made available by the UK government.
Constructing new buildings is very carbon-intensive, in addition to the emissions produced during a building’s life cycle. The focus should be to retrofit the existing stock of buildings to make them more energy-efficient. Retrofitting has the greatest scope for decarbonising the UK building stock and will achieve relatively quick results.
UK building stock is relatively old. 50% of residential and 39% of non-residential buildings were built before 1970, around the time when thermal regulations were widely introduced. Only 29% of residential and 30% of non-residential buildings were constructed in the 21st century.
A significant opportunity seemingly exists for retrofitting, with renovation required to many buildings to reach modern energy or thermal standards.
In a RICS policy report, published in May, Dr Patrice Cairns commented on the opportunity for carbon savings in the UK provided by retrofitting, but highlighted the lack of a clear policy route.
The UK Government have since established the Green Homes Grant Scheme (GHGS), an incentive to drive economic recovery following the devastating impact of the COVID-19 pandemic, and to improve the energy efficiency of existing buildings.
The scheme has an allocated budget of £2 billion and aims to reduce the cost burden for homeowners of energy efficiency renovations. It incentivises the construction sector by increasing demand for labour while simultaneously reducing carbon emissions by improving the energy efficiency of buildings.
The GHGS will provide building owners with vouchers for up to a third of the investment in insulation, heat pumps, or solar thermal heating systems. Low-earning homeowners will be able to apply for a voucher of up to £10,000, covering the total costs of the investment in energy efficiency measures.
The analysis conducted by BCIS however shows that renovations will incur extensive costs to building owners. Only a small proportion of properties can be renovated within the confines of the GHGS.
In our opinion focusing on renovations and retrofitting should be central to the green recovery. The GHGS is a good start and we recommend that the government should consider using the scheme as a pilot project to roll out more energy renovation measures and incentives.
Buildings are central to our daily lives. They should be considered as part of the wider initiative to tackle climate change. Energy renovations to existing buildings would help the UK achieve national targets, while creating new jobs and aiding the economic recovery.
RICS has carried out a study that examines the potential for renovating the UK’s existing building stock and identifies the required investment to meet modern thermal regulations. It also explores the possibility of creating “green jobs”.
RICS Consultancy recently completed a three-year service contract with the European Commission to improve the EU Building Stock Observatory (BSO) for the Directorate General for Energy. The BSO will be used to provide a better understanding of the building stock to steer an improvement in the depth and rate of building renovations, and to design effective policy measures and support mechanisms.
The analysis was based on data contained within the BSO.
The study consisted of three scenarios designed to demonstrate job creation potential from incentivising renovation, as well as the potential energy savings associated with the renovations.
The first stage of the analysis was to identify the quantum of the building stock to understand the scale of all buildings that will eventually require some form of renovation.
Buildings constructed post-2010 are not in need of significant renovation and were therefore excluded from the analysis.
The quantum of the built stock was calculated using data extracted from the BSO and estimated by calculating the average historical growth rate of the built stock up to 2016 and extrapolating that average rate for the following year. This provided a total figure of approximately 29 million residential buildings and 1 million non-residential buildings.
Scenarios 1 and 2 used the quantum of the 2017 building stock (excluding renovations), resulting in the total number of buildings that can retrofitted to improve energy efficiency.
Scenario 1 predicted an average energy saving of 12kWh/m2 for residential buildings and 33kWh/m2 for non-residential buildings. Scenario 2 assumed that renovations will produce a greater level of energy savings:16kWh/m2 for residential buildings and 34kWh/m2 for non-residential buildings
Scenario 3 was different due to the staggered nature of the analysis. Although identification of the quantum of the stock requiring renovation was the same, another layer of calculation was added to establish the total surface area of the buildings by age. By separating the buildings by age groups, this scenario allowed a more detailed picture of the renovation potential of the built stock. Each age group has a different renovating cost and energy-saving potential.
Regarding construction employment, some estimates in the analysis suggested that the total amount of jobs created per £m expenditure could range between 10-21 jobs per £m. To maintain a conservative approach, a range of 10-13 jobs per £m expenditure served as the lower and upper bounds for the study.
The study revealed there is significant potential for energy efficiency renovation, the associated energy savings, and job creation in the UK.
Considering the most and least conservative scenarios, the analysis showed that the estimated energy savings achievable from retrofitting the existing building stock could potentially lie somewhere between 51,000,000 kWh up to 182,000,000 kWh saved per annum, combining both residential and non-residential buildings.
The residential sector is one of the biggest emitters of carbon. Retrofitting domestic properties is recognised as a cost-effective route to achieving UK decarbonisation targets, in addition to the health and social benefits derived from such a programme.
The potential energy savings emphasise the importance of considering renovation of existing building stock as a key strategic approach in the plan to reach agreed climate change targets.
Furthermore, the potential job creation and boost to the economy could stimulate a “green recovery” in the UK as we move forward post Covid-19.
For more information, download Time to Retrofit – Decarbonising UK building stock and economic recovery