The price of retrofit success: why £6,500 won't cut it for social homes

Bill Taylor of Fusion21 talks to Housing Excellence about the coalition Government’s Green Deal.

For Taylor the £6,500 per home, which has been allocated through the Government’s Green Deal simply isn’t enough.

“When it comes to retrofitting, social landlords are ahead of the game. But will the sector’s progress in making homes more energy efficient soon become a chain around its neck?” he says. “It’s time the government acknowledged the fact that the £6,500 per home allocated in its ‘Green Deal’ won’t cover the major retrofit improvements most social housing organisations now need to tackle.

Taylor says that while the costs of basic ‘easy’ fixes should be covered by £6,500 per home, the figure is far too low for housing organisations which have already done significant energy efficiency work to many of their properties as costs are higher for making additional retrofit improvements.

Taylor explains that the next step for most social properties that are already at a higher level of energy efficiency is major works like internal wall insulation. Any property without cavity walls – 800,000 in the social housing sector - and those not on the gas network, will need substantial spend to significantly reduce emissions and energy costs further.

“This additional, more substantial retrofit work also has less of an effect on fuel bills per pound spent on works, as the cost of making improvements increases the higher up the scale you go,” he says. “Payback periods are longer and for the poorest householders, whatever the tenure, paying for these improvements from the energy savings is going to be more difficult than paying for the initial work. So willingness of residents to sign up for improvements with longer payback periods may be in question - we need a way of building up trust so people will welcome the opportunity for improvements.”

Pilot projects have indicated that £20,000 plus is needed to effectively retrofit properties. For the more problematic properties - where structural repair such as rebuilding of bay window or the replacement of flat roofs is needed the figure will be much higher.

Taylor says that the cost of these advanced works needs finance that social landlords are able to afford and that won’t penalise the occupiers. This must include some non-repayable element because the payback periods from energy savings will be much longer than for the ‘quick fixes’. He says transparent procurement linked to Energy Company Obligations (CERT, CESP and their replacements) is also needed to ensure best value for money.

“Another key consideration in the retrofit debate is to avoid the market being tainted by a plethora of ‘cowboy’ builders and salespeople exploiting property owners,” he says. “The current arrangements are not tight enough. Social landlords deal with larger reputable firms and monitor contracts professionally – we need to ensure that when retrofit is rolled out to other tenures there is a better system to ensure good quality work.

“We need to link good quality training schemes to spend on the Green Deal and other Energy Company Obligation work to ensure that we build a skilled workforce that can then move on to the private sector.

“Overall we need a retrofit approach that delivers value through economies of scale but also builds skills levels to provide a good quality workforce that can eventually move on to delivering into the private sector.

“Retrofitting can generate jobs whilst reducing fuel poverty and carbon emissions but only if the government is realistic with investment. Why should social landlords have to suffer for their retrofit achievements so far?”