With some of the least energy efficient housing in Europe, there is an urgent need to retrofit the UK’s housing stock to reduce energy consumption and improve energy efficiency. Retrofit Area Based Schemes (ABS) offer a unique approach to whole house retrofit, where a community intermediary is established within the local area. This creates collaboration in a locality, involving local authority partners, together with community energy organisations, local institutions and local supply chain delivery or training social enterprises.
Because this approach is being used across many projects at Carbon Co-op we’ve authored this blog – to set out our approach and share our thinking and learning. The Levenshulme ABS is trialling a street-by-street approach to retrofit to create savings and local benefits. The Retrofit project in Calderdale aims to train up a set of retrofit champions in Calderdale and local workshops to upskill people and local contractors in engaging in retrofit, creating relations with Calderdale Council and Todmorden College. One of Carbon Co-op’s most recent projects is a partnership with Connected Places Catapult and Oldham Council is also looking at an ABS feasibility ‘resilience’ project in Oldham looking at health and climate resilience.
Area based retrofit involves undertaking retrofit projects in large numbers in one local area. This approach brings together innovative forms of finance, contractor training and householder and community engagement for a closed-loop economic system for local domestic retrofit. By combining different tenures in similar properties, the process is more cost-effective because bulk procurement facilitates one process for design and delivery. This creates a model for neighbourhood energy action that places householders and collective action at the centre of the process.
What’s the role of an intermediary?
The role of a trusted intermediary is crucial to an ABS. Carbon Co-op acts as the client community intermediary within the ABS in Levenshulme. This role involves negotiating finance, detailing designs and construction works on the behalf of clients and upskilling the supply chain involved in the retrofits. It should be noted that the intermediary also plays a key contractual role in the project, entering into agreements with multiple householders on one side and a lead contractor on another. This results in a greater degree of control for the intermediary and the ability to manage works specification and quality, but also results in increased risks for the intermediary, for example in the instance of cost or time overruns.
Energy efficiency schemes have often used large contractors working on a national scale and using large subcontracting chains to undertake work. The involvement of private companies, often headquartered many miles from the work and utilising sub-contracting can lead to greater levels of householder distrust, particularly in the context of retrofit disasters, for example the scheme in Preston where up to 390 homes were impacted by poorly installed external wall installations. In contrast, an ABS is designed based on community engagement. In the Levenshulme ABS, there has been great value in engagement from the start of the project, which has built trust between householders and the architect, Progress in Practice and the contractor, B4Box.
In Scotland, strong partnerships between the Council and local organisations has led to the success of the Energy Efficient Scotland: Area Based Scheme (EES:ABS). This programme was introduced in 2013 by the Scottish Government to support private tenure houses to install energy efficiency measures, in particular those in fuel poverty. A key strategy was engagement with community-based groups to improve uptake, for example working with Newcastleton and District Community Trust on promotional materials and building.
Who finances it?
Housing retrofit is often viewed as complex and high-risk by major investors. Therefore, institutional funders, for example pension funds, will likely only enter the market once they are confident it can deliver stable returns. Austerity and the use of market based approaches such as the ECO scheme (Energy Company Obligation) have meant that finance for these schemes now relies on private sources of capital due to the lack of funding and resources within the local government to invest in retrofit. Therefore, it is important to explore new funding and lending methods for retrofit schemes.
For the Levenshulme ABS, the capital works are funded through a mixture of grant money and loans for property owners. Manchester City Council has played a proactive role in offering 0% interest free ‘group works’ loans of up to £35,000, which only need to be paid back once householders are selling their home. This financing mechanism is found to be less daunting for householders as there are no upfront costs. The grant pot was funded by the financial re-payments from Carbon Co-op’s 2015 Community Green Deal deep retrofit project and the eligibility test set up by Carbon Co-op which was created was similar to that of ECO flex with a set of criteria.
However, individual circumstances and the grant money not being available for everyone has impacted the incentives for householders to invest in the project. Different ‘financial personas’ mean that the motivators for young families or elderly people’s motivations for being a part of the schemes will vary. In this way, the intermediary plays an important role in staying engaged with householders throughout the process to understand their position.
Retrofit for Health and Climate Resilience
There are an estimated 2.6 million inadequate homes in the UK. This is leading to higher energy bills and poor health due to cold and damp homes, which is not only impacting the householder but also costing the NHS money. Retrofitting the UK’s housing stock could save the NHS £540 million annually.
Brenda Boardman is an Emeritus Professor at the University of Oxford’s Environmental Change Institute and her research emphasises the effectiveness of street-by-street provision of energy efficiency measures, in particular when addressing fuel poverty. Where retrofit is needed to increase energy efficiency, there is also a social need for retrofit to make homes warmer and healthier which will lead to greater social benefits. Therefore, it is suggested that a shift is needed from individual property improvements to community-scale refurbishment. Area-based approaches can provide this opportunity to focus on places where there are high levels of fuel poverty and also recognise that each property and household is individual and therefore given flexible, sensitive solutions.
Carbon Co-op’s new partnership with Oldham Council and Connected Systems Catapult is set within the context of Oldham’s Green New Deal Strategy. The aim is to unlock retrofit and support community resilience in the face of climate change and how we can bring communities together to achieve a healthy and resilient future together. Placing health and resilience at the centre of efforts to accelerate housing retrofit will benefit both the climate and support a healthy population with the aim to find new solutions to assist those out of fuel poverty.
The Oldham Green New Deal Strategy is Oldham Council’s climate change mitigation strategy which was adopted in March 2020 as the UK’s first local authority Green New Deal strategy. The strategy sets two stretching carbon neutrality targets- for council buildings and street lighting by 2025 and for the borough as a whole by 2030, within the context of the Greater Manchester carbon neutrality target of 2038.
Retrofit has been recognised as one of the most important ways to reduce carbon emissions. However, there are key challenges in carrying out retrofit at the scale and pace required. Unlocking barriers and finance are key challenges to improving the UK’s energy efficiency. ABS bridges the gap by rolling out a trusted local intermediary and advocating for whole house retrofit as the only way to improve energy efficiency, while also securing community buy-in and supporting the local supply chain. This is the citizen-led answer to building back better with warmer homes, lower bills, better health and new jobs.