UK facing battle to retrofit 1m homes a year

A million homes a year will have to be retrofitted for the UK to reach its net zero target, according to a report from Bankers for Net Zero and the Green Finance Institute.

The paper also states that retrofit industry, which today is made up mostly of SMEs, will need to grow by at least a factor of 10 to achieve this ‘retrofit revolution.’

It sets out a clear plan for scaling up the retrofit industry in order to decarbonise an estimated 29m homes – a plan fundamental to the UK reaching its goal of net zero emissions by 2050.

Heating and powering homes makes up 23 per cent of the UK’s carbon footprint and contribution to climate change. Scaling up the retrofit industry will tackle these emissions while creating green jobs and supporting thousands of small to medium sized businesses across the UK.

The paper, Tooling up the Green Homes Industry: Financing the Retrofit Supply Chain, lays out the barriers to retrofit industry investment and growth. It also provides six high-potential solutions for the investment and finance industry, and relevant business groups, to act on:

• increase access to sustainability-linked loans for SMEs;

• create dedicated “Green” or “Transition” SME funds;

• add green criteria to existing public finance schemes and use guarantees to “crowd in” private capital;

• create advisory hubs that bring together customers, suppliers and finance providers;

• create the rules and protocols to enable more accurate, real-time assessments of property performance’; and

• strengthen the ecosystem of SME accelerators and growth hubs.

The paper also shares key principles for new government policy in this area:

• front-load market support – using the funds already committed to the decarbonisation of social housing and public buildings to pump prime the market;

• set out a clear regulatory pathway for energy performance standards for all building types; and

• set out an overarching strategy for applying an adequate and consistent carbon price to every tonne of CO₂emitted in the UK.

The paper also calls for the UK government to raise the minimum threshold for Energy Performance Certificate (EPC) ratings required to lease or sell a property. Raising this requirement will drive private sector investment from landlords and homeowners across the board, complementing public sector investment to accelerate adoption.

Louise Kjellerup Roper, CEO of Volans and Bankers for Net Zero founding partner, said: “Retrofitting the UK’s outdated 29 homes is an essential part of our fight against climate change. One which will address a massive 23 per cent of the UK’s emissions while creating thousands of new jobs and driving down heating bills across the country. The retrofit industry – mostly made up of small and medium sized businesses – will struggle to take on this challenge without investment and support. Which is why we have offered six actionable solutions for finance and business to apply right now – tooling up the retrofit revolution for a prosperous, net zero emissions UK.”