The use of an industrial strategy for home decarbonisation

here are always competing challenges for the housing association sector. Over recent years, the building safety crisis has dominated the sector’s thinking but it’s fair to say that decarbonising our housing stock is finally getting the attention it deserves.

The drive to net zero, and the impact that rising energy bills has had on people’s finances has been central to this, but it’s something that we at Stonewater have been focussed on for a number of years.

Yesterday I spoke at the IPPR event looking at how to develop an ‘industrial strategy’ for home decarbonisation, alongside a panel of extremely knowledgeable and passionate speakers.

A cohesive and longsighted approach

We took the view a long time ago that providing warm and safe homes should the driving force of what we do. That’s why Stonewater supports the drive to decarbonise and retrofit our homes, as well as to work with others to find solutions. In It’s good for the planet, and it’s good for our customers.

In the past few years, we have worked closely with research organisation IPPR, supporting two major reports that seek solutions to the challenge of how to fund and how to implement retrofit at scale. These have had significant influence, leading to major government announcements on the use of heat pumps, and support from the Labour Party.

Alongside this, we have secured almost £10 million in funding from the Government’s Social Housing Decarbonisation Fund, to  over 1000 homes – some of which are already completed.

But still more needs to be done, and we can’t do it alone. A cohesive and longsighted approach to decarbonisation is critical if social housing providers such as ourselves are going to reach net zero carbon and ensure our customers’ homes are comfortable and affordable. This is now more apparent than ever during the current cost-of-living emergency and with a damp and mould crisis in the sector.

Whilst some funding is available for decarbonisation works, and the DESNZ has been engaging with the sector, there is still a way to go. Long-term political backing, funding and direction is vital to provide certainty and consistency for all sectors to invest in energy-efficiency measures with confidence. If you only have two years of funding, the supply chain will only plan for two years; no-one invests in anything if it’s only short-term.  

And alongside that, getting the staff we need to deliver our retrofit programmes (and everyone else’s) is going to be a big challenge. It’s all very well having the funding available if we cannot actually spend it because there are not enough people trained to do the work.

The benefits of an industrial strategy

An industrial strategy would provide recognition of the scale of the challenge that faces us, and a stronger impetus behind doing what is needed. It would coordinate government departments involved in the different elements of delivering a national decarbonisation programme and it would recognise the role this work can play in economic and regional development and growth.

It would also give organisations like Stonewater the confidence to invest at scale, knowing that funding and support will continue to be available, in a similar way to the approach taken for building new affordable homes, through drawing down grant funding from Homes England. This has proved itself a successful way of delivering funding in a more flexible way over a longer period, with the potential to be replicated for retrofit.

A coordinated approach between national and local government, businesses, third sector organisations including housing associations, and the public is needed if we are to deliver on the decarbonisation mission and capture the economic benefits.

How and when?

An area-based approach would seem to be the most efficient way to do this, and could take advantage of more localised energy systems such as Kensa’s heat the streets model. But we need more flexible funding if we are going to deliver retrofit to whole streets and areas, just as we need the supporting policy to level the playing field between the cost of gas and electricity. This would take away the main barrier to rolling out heat pumps – that they are more expensive to install and maintain than a gas boiler. Plans to decarbonise will go nowhere if the alternatives are costing more than what we currently have.

And central to all of this is that we must take a ‘fabric-first’ approach – improving the insulation and energy efficiency of our homes. Putting a heat pump on a poorly insulated home would be like putting lipstick on a pig, and will do nothing to address the scare stories we already see about them in some parts of the press.

In an ideal world, all of this would be rolled out sooner rather than later. But we need to be patient, as any industrial strategy needs careful, long-term planning to avoid future shifts and changes in regulation and funding.

We need to work with the supply chain to understand their ability to scale up and the costs involved, as well as working with the energy sector including network distributors to ensure the whole energy system is prepared.

We also need to tackle the lack of available skilled workers and invest in the expansion of training and education in this area across the country, perhaps using a similar approach to the Institutes of Technology model, set up by the Department for Education to increase the supply of highly skilled technicians across key industries that our economy needs.

Practical steps

To overcome the practical challenges of upgrading homes, firstly we need more monitoring of homes in use, using the data and information we gather to ensure we put our funding where it is most needed. We also need time to deliver more retrofit works so we can learn from them, and we need to be continuously upskilling the workforce.

In terms of delivering retrofit works to different property archetypes, retrofit assessments and designs could be made publicly available in the same way as EPCs so homeowners and landlords can get a better understanding of the work required to improve each home type. This might also help to reduce the cost to the private sector of ensuring retrofit meets the required standards and complying with best practice such as PAS2035.

We at Stonewater would also like to see a retirement living-focussed pilot scheme, in addition to the current spotlight on general needs housing.

With the competing challenges for Stonewater’s funding, investment in retrofit works and related research doesn’t come easily. However, we're committed to providing homes that are energy efficient and contributing to the Government’s net zero targets, and so we will continue to strive for a long-term, cohesive industrial strategy that delivers the decarbonisation work that the social housing sector, the country and the planet needs.