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The Social Housing Decarbonisation Challenge

In its Clean Growth Strategy, the Government set out its ambitions for a low carbon future with the decarbonisation of social housing high on the agenda. As social landlords across the UK grapple with the challenge of achieving Energy Performance Certificate C ratings across all social housing by 2030, Wates and its social housing energy services partner, Energy Specifics, explore the main challenges now facing the sector.

Wates Property Services

“The sheer volume of social housing that requires retrofitting with energy-efficiency improvements gives us some sense of scale for the challenges ahead,” explains Amy Smith, Partnerships Director at Wates Property Services. “There are over five million social housing properties in the UK. If we’re to achieve the long-term target of net-zero by 2050, we would need to retrofit three homes every minute. But pace isn’t the industry’s most pressing challenge; we’re having to react fast to new legislation and retrofitting isn’t a process that can (or should) be rushed. The industry needs to catch up, to upskill and firmly understand the evolving funding solutions so we can help social landlords prepare their housing stock to meet zero-carbon obligations.”

In November 2020, Wates launched its partnership with Energy Specifics to provide a fully-compliant, carbon-reduction retrofitting service with the objective of providing landlords with the tools to deliver a ‘whole house’ energy-saving retrofit solution. Amy added: “Carbon retrofitting simply can’t be done without working in partnership. Energy Specifics is one of a few companies already operating under the PAS 2035 retrofit standards framework. They bring the technical expertise, compliance and funding knowledge and we bring the retrofitting capability. By pooling our expertise, we are better able to guide social landlords through their carbon retrofitting programmes.”

Tim Freeman, Director of Energy Specifics, adds: “The net-zero by 2050 target is undeniably vast and for social landlords the decarbonisation journey will be fraught with unknowns. Ultimately, we are all driven by the same goals – to reduce carbon emissions and combat fuel poverty. But how do we get there? It’s an ever-changing landscape; funding is constantly evolving; new carbon reduction innovations are continually brought to market. Our partnership with Wates is designed to help customers look at what funding is available within a changing landscape and work collaboratively to maximise the opportunities out there.”

Funding for Social Housing Decarbonisation

Last year, the Government formally launched the Social Housing Decarbonisation Fund (SHDF), through which it has committed £3.8bn over the next 10 years. The first wave of the SHDF provided £50m to fund demonstrator projects to inform future retrofitting schemes. A further £62m was allocated in March this year on top of £500m from the Government’s Green Homes Grant.

“There are several funding pots available for social housing retrofitting but they draw a lot of criticism for simply not going far enough,” adds Tim. “The SHDF will not be able to stretch across the homes it needs to but its shortfall isn’t insurmountable. New funding is constantly emerging but eligibility and criteria can be somewhat hard to navigate. The Local Authority Delivery Scheme (LADS) for example, which is part of the Green Homes Grant initiative, is targeted at low income families. However, residents on a qualifying state benefit may also receive funding under the Energy Company Obligation, but collecting evidence of qualifying benefits to establish potential recipients is a hefty task for local authorities. This can be further complicated by potential complexities with leaseholders in tower blocks skewing LADS eligibility. We often help clients to establish potential recipients of funding, or look at alternatives where occupiers don’t qualify.

“Likewise, the Energy Company Obligation (ECO) funding, which is now in its third phase, has a scoring system which determines the amount of funding available for a carbon reduction measure, generally covering loft insulation, cavity wall insulation, underfloor insulation and boiler replacement or repair. In my experience, the best strategy for social housing decarbonisation is to have a blended approach to securing funding where possible.”

Upskilling for decarbonisation

From 1st July this year, retrofitting service providers and those providing energy-efficiency measures will be required to be registered to the PAS 2035* standard in order to qualify for funding, a specification that ultimately ensures energy-efficiency measures have the necessary impact. The PAS 2035 standard ensures that properties are reviewed by trained and qualified retrofit assessors, taking into consideration the energy-saving opportunities, as well as the condition of the property and its suitability for improvement.

Amy adds: “At this point in time there is a bit of a limitation in terms of the number of qualified retrofit assessors and coordinators but huge leaps are being made. To qualify for funding, retrofit assessments must be done by those qualified to the PAS 2035 standard and this is a very involved process. Social landlords are turning to our industry for guidance and so it’s our duty to keep on the front foot in terms of our knowledge and skill.”

Unlike regular household surveys, a retrofit assessment must be conducted by a PAS 2035 retrofit assessor and involves an in-depth two- or three-day survey to provide a detailed retrofit plan (or ‘medium-term improvement plan’), that includes measures to reduce the carbon footprint of a property. The social landlord then selects measures to adopt, applies for funding and commissions the work. Once complete, the retrofit coordinator uploads the installation details to TrustMark, which generates a number to recoup funding.

Tim continues: “The retrofit assessment is possibly the aspect of social housing decarbonisation that social landlords underestimate. The assessment is very detailed; it includes a condition report, ventilation assessment, EPR (Energy Performance Report) and occupancy assessment. The recommendations within the retrofit plan are often numerous; it’s essentially a guide for property upgrades but it allows social landlords to prioritise the measures that will have the most impact and be most cost effective.” PAS 2035 prioritises fabric-first measures such as insulation, before heating and renewable measures.

“Not all measures need to be done at once, which makes the decarbonisation journey much more digestible,” adds Amy. “What we are also seeing is that the retrofit plans are giving our clients a better understanding of how their housing stock is performing, which then feeds into their long-term asset management plan. There is no denying that the road to social housing decarbonisation is a long one and we’re very much at the beginning of that journey but we are all heading in the right direction to create healthier homes, reduce carbon emissions and help residents out of fuel poverty.”

*PAS 2035: The new Publicly Available Specification that lays out all retrofit energy-efficient enhancements to the UK’s existing housing stock. Within this framework, TrustMark holders will be required to comply with this standard when carrying out any domestic retrofit work.

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