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From retrofit to resilience: CSE’s response to the government heating our homes consultation

A man installing a new energy efficient double glazed window unit into a Victorian terraced house.
4 September 2023

Reshaping the way we heat our homes is a vital part of our transition to net zero. It’s at the heart of our work at CSE.

The Centre for Sustainable Energy (CSE) response to the government’s Energy Security and Net Zero Select Committee call for evidence, Heating our Homes, focuses on the policy and consumer context around decarbonising homes, particularly in relation to retrofit.

Drawing from our extensive experience in retrofit programs, including ECO Flex administration for seven councils and Home Upgrade Grant (HUG) delivery for four councils, CSE facilitated the installation of 1,845 measures in 2022/23. Furthermore, we’re supporting communities to help others act to improve their homes, notably as the lead partner for customer engagement in the Bristol Heat Pump Ready programme.  CSE is also engaged in strategic policy analysis, collaborating with the ADE to assess the pace of energy efficiency deployment for the Climate Change Committee.

Heating our homes consultation response

Policy changes for a smarter, greener and fairer energy transition

Our homes are responsible for half of the carbon emissions from the built environment. That’s why we’re focused on improving their energy efficiency; it’s a critical step in fulfilling the UK’s net zero commitments. As we speak, 85% of homes are still reliant on gas for heating, and with gas prices soaring, the urgency has never been more evident.

Our most significant recommendation is for consistent, long-term policy signals that stretch far beyond election cycles. We need a ten-year program, targeting not only those trapped in fuel poverty but also the middle majority – those who want to upgrade their homes but need the right incentives to do it. Success comes through a mix of incentives and regulations to drive the retrofit revolution. Here’s some key points, but you can also read our full consultation response here.

Grant funding to power transformation

What’s needed is a nationwide initiative, just like those already in place in Wales and Scotland. Developing “Warm Front 2.0,” would create a visionary retrofit program designed to offer substantial support for an entire decade. Its mission: retrofit a million homes annually, with a special focus on supply chain constraints like solid wall insulation. Not only will this slash carbon emissions, but it will also nurture skills through apprenticeships and training schemes.

Local authorities, the backbone of these initiatives, require support and capacity building to effectively deliver area-based schemes. Additionally, financial aid and advice are essential for helping lower-income households transition to clean electric heating, a move that reduces both energy bills and carbon emissions.

Fuelling home energy efficiency with innovative fiscal measures

To encourage energy efficient home improvements, we’re proposing innovative fiscal measures. We suggest adjusting Stamp Duty Land Taxation (SDLT) based on Energy Performance Certificates (EPCs). Lowering SDLT for higher-rated EPCs and raising it for lower-rated ones. This would create a powerful incentive for home improvements.

Meanwhile, the reintroduction of the Landlord’s Energy Savings Allowance (LESA) at a higher rate, in conjunction with Minimum Energy Efficiency Standards will motivate landlords to invest in energy-efficient properties.

Regulation and education

Stricter Minimum Energy Efficiency Standards for the private rented sector are crucial, and we’re pushing for their implementation. We propose a phased trajectory and increased investment amount, with a “fabric-first” approach to energy performance improvements.

To provide quality energy advice for people, we recommend re-establishing a national network of local energy efficiency advice centres (EEACs). Additionally, a national communication program will dispel misinformation and educate the public on the benefits of heat pumps.

Policy, skills and training for transformation

Our most pressing challenge is the lack of skilled professionals across the retrofit sector. The Green Homes Grant demonstrated that demand can quickly outstrip industry capacity. For years, CSE has been calling for a “retrofit army” and the establishment of a Retrofit Delivery Agency to strategically address this issue. An additional 500,000 trade positions are needed to meet even a minimum EPC C target for all homes by 2030. This is more than double the existing workforce, as doesn’t include the 50,000 retrofit coordinators also required.

We advocate for increased standards across all builders and trades, building upon existing schemes like Trustmark. PAS 2035, a retrofit compliance framework, should cover significant retrofit activities regardless of grant funding.

Customer choice and community engagement

Heat networks are crucial for the transition to net zero because they provide efficient, low-carbon heating by distributing heat from centralised renewable sources. By reducing reliance on individual fossil fuel-based systems, they significantly cut carbon emissions, making them a vital component of towards decarbonising heat. Heat network zoning provides an opportunity to strategically identify where it’s most economically favourable to develop heat networks. The government is working with CSE to develop the model that will help map where heat networks are the lowest cost low-carbon solution to decarbonise building heating.

Once the heat network zones have been established, we need a collaborative approach to decision making. CSE’s Future Energy Landscapes (FEL) , community engagement approach involves local communities in how and where renewable energy development gets developed around them.

It considers the type and scale of renewable energy that communities might find acceptable, the potential landscape impacts they might accept, and the benefits they can derive. It has been remarkably successful in building support for expanding renewable energy generation, including onshore wind.

A similar approach could be taken to engaging the local community in the roll-out of heat networks. Unless mandated to connect to a heat network, consumers will make their own choice and may opt for a non-network alternative such as a heat pump. They are more likely to choose to connect to a network if they regard the offer as both trustworthy and fair.

Government’s role in implementation

The different levels of government, local authorities, and a dedicated Retrofit Delivery Agency all have vital roles in coordinating and funding retrofit schemes.

CSE is advocating for these changes to create a greener, smarter, and fairer future for our homes. It’s not just a vision; it’s a call to action.

Heating our homes consultation response

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