Since the UK government’s flagship Green Homes Grant policy was scrapped in March 2021, many have been asking – what next? The Green Homes Grant offered up to £5,000 to cover two-thirds of the cost of retrofitting homes to make them more energy efficient for those ‘in-work’, and £10,000 for those on a low incomes.
From the beginning there were claims of a lack of accredited companies who could carry out the work, and it emerged that only 7% of the possible 600,000 low-income households received the cash they could claim. Homes in the UK contribute 14% of carbon emissions, and we have some of the oldest housing in Europe. Efforts to bring our homes up to scratch are crucial, but what is being done? And how can we contribute as individuals?
What is Retrofitting?
Retrofitting is the act of making adjustments to homes to make them more energy-efficient. Retrofitting will need to take place on a massive scale in order for the UK to slash emissions by 45% by 2030, and meet net-zero by 2050.This will not come cheap, with a total of 26 million homes in need of retrofitting. And this figure does not include the 20% of homes which are projected to be demolished and rebuilt, with the need for energy-efficient measures to be added during their construction.
Every UK home has an Energy Performance Certificate (EPC) ranging from A (the highest) to G (the lowest). The government wants every home to be band C by 2035. Currently, two-thirds of homes are below par, with one-half of that figure at are band G.
What is on Offer to Help Home Owners and Renters?
Some financial incentives to improve home energy efficiency already exist in the private sector. For example, Natwest offer a green mortgage and Halifax offer £250 cashback for first time buyers purchasing energy-efficient homes. Meanwhile, the government is considering introducing targets for banks to improve the energy ratings of their lending portfolios to band C by 2030.The danger of these policies is that they may drive up costs in such a way that low-income families are either trapped in poor quality homes, or priced out of the housing market altogether.
Ideas in the pipeline that have worried some landlords include regulation in the private rental sector, which would see minimum requirements of band C for all rental properties by 2025. In general private rentals are less energy efficient than social housing. Estimates of the cost of retrofitting all these UK homes to the required standard varies. Nationwide has said on average the cost will be £8,100 each, whilst the Climate Change Committee (who advise the government on climate policy) puts the figure at £26,000, running to £676 billion in total.
Low-Carbon Heating Systems: A New Focus
The government’s Clean Heat Grant (CHG) (now to be known as the Boiler Upgrade Scheme (BUS)) will replace the Renewable Heating Incentive (RHI) due to end in March 2022. Grants of up to £5,000 will be available from April 2022 to install ‘low-carbon heating systems’. Here, ‘low-carbon heating systems’ is usually longhand for heat pumps. There are two types of heat pumps; air source (ASHP) and ground source (GSHP). More information on heat pumps and how the two types work, and cost of installation is available in our article here. Overall, ASHPs are cheaper to install but potentially more expensive to run. On the other hand, GSHPs are more costly both in money and space to install, but they are more consistent, using ground temperatures of 10oC to pump warm air into the home.
The government has £450 million earmarked for installing heat pumps. This money will only cover 90,000 of the 600,000 heat pumps the government is hoping to install by 2028. Indeed, many have criticised the replacement of the RHI policy with the far more financially-constrained BUG. The RHI offered retrospective payments of up to £28,000, far more generous than the upfront BUG grant, which additionally will cap heat pump installations at a 45KW capacity. This clearly leaves much to be desired by commercial buildings, leaving them out of the picture in favour of small-scale installations. No new gas boilers will be allowed after 2035, a date considered much too late by non-governmental organisations (NGOs) like Greenpeace, so heat pumps are set to play a huge role in the future of heating the UK’s homes.
As heat is drawn from solar energy, heat pumps are considered renewable, however they do need electricity to run. In theory as the electricity grid becomes 100% renewable this won’t be a concern. Other alternatives such as hydrogen fuel, heat batteries and in some limited cases geothermal energy are being explored. However, the other main factor in green, energy efficient homes is insulation.
Heatpumps vs Insulation
Scrapping the Green Homes Grant and focusing on heat pumps for small-scale installations shows the government is shifting its attention for making domestic homes energy-efficient. However, advice is generally to ensure that your home is properly insulated before installation of a low-carbon heating system, as heat pumps are less powerful than gas central heating. When it comes to insulation there are three main options; loft insulation, cavity wall insulation and double or triple glazing. An in-depth overview of home insulation options is available in our article here.
Of these three, loft insulation is the simplest and cheapest, and can even be done as a DIY project. Home owners need to buy u-value 0.16W/m2K, 270mm of wool insulation and lay it in the loft. The cost ranges from £6 per m2.
Cavity wall insulation requires professional injection into a wall cavity. Most homes built after 1935 will have cavity walls, and the cost is roughly £10 per m2 of insulation. Homes without cavity walls need solid wall insulation which is much more costly. Double and triple glazing require professional help and can be comparatively very expensive, but could save £100 a year on energy bills.
The government’s commitment to heat pumps over insulation has raised a few eyebrows, not least amongst climate protesters, some of whom were jailed in November. The fact that insulation and low-carbon heating must work in congruence means that, while retrofitting policies are always welcome, the focus on low-carbon heating is not enough on its own.
One piece of advice we have gleaned and are keen to pass on; if you are eligible for the RHI scheme, apply while you still can. Applications will be closed at the end of March this year. In anticipation of this, requirement for applications for the RHI scheme to be submitted within 12 months of commission were scrapped, and those rejected for this reason can re-apply. Further information on eligibility and the application process are available from Ofgem.
What are your thoughts on the replacement of the RHI with the BUG? Has installing a heat pump, or insulating your home helped you save on your energy bills? Let us know in the comments!