Written evidence submitted by Leeds Beckett University (ENE0007)

 

Written evidence submitted by the Leeds Sustainability Institute (LSI) at Leeds Beckett University (LBU) for the Business, Energy and Industrial Strategy Committee (BEIS) inquiry into the Government’s approach to delivering energy efficiency improvements to buildings

  1. Executive Summary

At the LSI we have over 25 years’ research experience in building retrofits.  We work with a range of stakeholders including: government, energy companies, installers, suppliers, manufacturers and householders.  As a consequence, we are uniquely positioned to independently view the entire system as a whole, as well as each of the component parts, in great detail.  This has led to the development of our following critique of the existing retrofit system:

  1. Introduction to the LSI

The LSI is a leading institution in building performance evaluation (BPE), with extensive experience of undertaking field trials, energy and thermal modelling, behavioural change and data analytics.  Research by the LSI has helped establish and quantify the building fabric energy “performance gap” in domestic buildings, leading to changes to Building Regulations and Government Policy, including the inclusion of party wall U-values within Part L of the Building Regulations, and ECO.  The electric “co heating” test, developed by the LSI, is being developed into an international CEN-standard and is used by other institutions and government projects as the reference test for assessing dwelling thermal performance and for validating other evaluation methodologies. Recently, we have undertaken a number of important retrofit validation projects for BEIS, including: investigating over 60 retrofits as part of the Green Deal research project, investigating the potential for cavity party wall Insulation retrofit and understanding how novel thin internal wall insulation performs when retrofitted into homes. In addition, we have also undertaken multiple research projects for industry (suppliers and manufacturers) into the effectiveness of their retrofit products.  We are also supporting the APPG on Healthy Homes, as well as the Each Homes Counts and development of the Quality Mark for retrofits.

 

  1. Reason for submitting evidence

The LSI is concerned with evaluating the performance of domestic retrofits and testing various solutions to the different energy efficiency problems in homes.  We have observed that the cause of multiple problems that manifest in people’s homes following retrofit, often originates in the structure of retrofit policy.  We have highlighted within this document those issues that we feel are barriers to delivering more retrofits generally, and incentives for inappropriate and poor quality retrofits.

 

  1. Evidence

4.1.             Overarching approach

4.1.1.       Who should have responsibility to pay for energy efficiency?  Our research suggests that householders do not fully appreciate the benefit of retrofits or understanding how this will affect their thermal comfort or fuel bills, this represents a market failure (Gorse et al., 2017).  We also have evidence to support the idea that householders often view domestic retrofits as catalysts to improving the streetscape, identifying the public benefit of retrofits (Fylan et al., 2016a).  

 

4.1.2.       Should energy efficiency be considered a national infrastructure priority? We have evidence that suggests that householders struggle to understand how to reduce their fuel bills via switching to cheaper fuel tariffs (Hardy et al., 2019) and that simply switching will not reduce energy consumption or GHG emissions (Fylan et al., 2016b).  Thus, the market may not reduce energy use, fuel bills or carbon emissions in line with government targets.

 

4.2.             Existing housing stock

4.2.1.       Are the Government's targets to improve the Energy Performance Certificate (EPC) ratings of our existing housing stock ambitious enough? Our evidence suggests up to 60% of all EPCs contain at least one error and simply recommissioning an EPC with a different assessor could change which band a building receives (ongoing project with ESRC, publication in press). Furthermore, EPCs currently do not include aspects of the property that could potentially have an impact on retrofit success, for example: dampness, leakiness and maintenance requirements. There is also no identification of aspects of the property that may potentially lead to retrofit design problems and low performance in the installation, if not adequately considered. Therefore, currently designed EPCs may not always be the most effective measurement method or means of target setting. Our research shows that there are a substantial number of homes that would require intrusive and uneconomical retrofits to achieve C ratings (Gorse et al., 2017), yet there are simpler and cheaper retrofits that would improve the quality of lives of occupants and reduce their fuel bills. These measures should be prioritised above those that have been identified as leading to an improvement in the hypothetical rating that a house has.  Consequently, having a C target for all homes may be an inefficient way to spend public money; more benefit may be gained from flexible retrofits depending on a house’s particular needs. 

 

4.2.2.       Is there sufficient support in place to deliver targets for all homes to be EPC band C by 2035?  The vast majority of ECO funded retrofits install only single measures; 1.6 million unique homes out of 2 million measures installed (BEIS, 2017). Our evidence suggests that even following extensive retrofits of single fabric elements (floors, walls, etc.), certain house types will not achieve a C rating (Gorse et al., 2017).  For example being at the top of band D would mean that a house only needs a small improvement to achieve a C, while being at the bottom of band D would require a much larger improvement. Thus, homes that are seemingly the same rating may be receiving substantially different retrofit and investment, which may be appear unfair and confusing to consumers. Current mechanisms will therefore support retrofits that will not achieve C rated homes.  However, it is not clear if the aim of policy is to achieve simply a C rated house or to achieve healthy homes.  More effective policy may look at adequate management and use of homes by occupants. We have evidence to show that some householders are not aware of the benefits of their retrofit, how to manage their home cost effectively, or to maintain a healthy environment whilst prioritising perceived low heating bills. This means they may leave rooms unheated, use low space heating set points or very reduced space heating hours. Occasionally, the occupants misunderstand the most cost-effective way to operate their central heating system. For instance, we have evidence of people using expensive electric portable heaters or even turning on their gas cooking hobs to try to stay warm, as opposed to using their radiators, simply because they do not believe that the central heating system is cheaper (Gorse et al., 2017).  Installing a new boiler to these households will not result in the envisaged savings in carbon emissions unless home energy management is addressed.

 

4.2.3.       Is the Energy Company Obligation (ECO) an adequate mechanism to ensure fuel-poor homes are upgraded to EPC band C by 2030? Our evidence suggests that fuel poor homes that have been retrofitted may remain in fuel poverty, since the retrofits that they have received have not been installed correctly (Glew et al., 2017) or the retrofits have not been sufficiently extensive to achieve Band C ratings (Hardy et al., 2018, Gorse et al., 2017).  We also have evidence to suggest that retrofits are taking place outside of ECO in owner occupied homes, as the current ECO process is too complex and it is perceived to be cheaper and simpler for householders to include energy efficiency retrofits when carrying out other home renovations.  Finally, we have evidence to show that even after retrofits some fuel poor houses are very leaky, which substantially affects comfort and fuel bills since whole house air leakage reduction is excluded from ECO payments, thus undermining the rest of the retrofit (Gorse et al., 2017). 

 

4.3.             Private rented sector: We do not have evidence to comment on the PRS.

 

4.4.             Regional disparities: We do not have evidence to comment on regional disparities.

 

4.5.             Non-domestic sector: We do not have evidence to comment on the non-domestic sector.

 

4.6.             Lessons to learn

4.6.1.       What lessons can be learnt from the devolved administrations on delivering energy efficiency measures? The following points have been derived from multiple projects undertaken by the LSI over the past few years, including the Green Deal research project an ongoing project with BEIS on Thin Wall Insulation, an ongoing project with Qbot on floor insulation, an ESRC project into EPC quality, as well as other published documents (Hardy et al., 2018, Gorse et al., 2017, Fylan et al., 2016a, Fylan et al., 2016b). 

 

  1. Recommendations to Government

 

  1. Response to Chair’s Comments

6.1.             Delivery of energy efficiency improvements consistent with targets set out in the Clean Growth Strategy, and our fourth and fifth carbon budgets. It should be recognised that there is a difference between savings reported in EPC’s and those reported in carbon budgets.  The EPC reductions are modelled or estimated, whilst the reductions in carbon budgets are based on actual consumption at the meter.  Thus, 1 tonne of CO2 reduction in an EPC may not equal 1 tonne of CO2 reduction in the carbon budgets.  In addition, it is likely that a large amount of retrofits have been undertaken outside of ECO schemes, thus the general reduction in domestic energy use reported over recent years is not all attributable to ECO policy.  ECO policy is therefore overstating its achievements. Furthermore, we also understand that even zero carbon houses in theory will not be zero carbon houses in practice, since they are used differently and perform differently to their designs.

 

6.2.             Upgrading energy efficiency.  Homes are receiving upgrades to energy efficiency only via piecemeal improvements, e.g. only the floor is insulated, or only a boiler is upgraded.  This represents a missed opportunity in terms of economies of scale and the opportunity cost of making additional savings during the same intervention. In addition our research has found that maintenance requirements that could improve the performance of the upgrade intervention have been ignored.

 

6.3.             Focus on action to upgrade the energy efficiency of fuel-poor homes and the Government’s work to drive demand for energy efficiency measures within able to pay households. Fuel poor homes may receive more retrofits, however, it is unlikely this will bring them out of fuel poverty, since the savings are only modelled savings (large performance gaps), single measures are incentivised and households use energy differently from expected models (e.g. accept lower space heating set point temperatures).  A fuel poor household without the skills to manage their home effectively (i.e. using electric room heaters) may not get the full benefit from a retrofit and may continue to use their home inefficiently.  Able to pay households are more likely to retrofit their homes outside of the ECO policy and so go unreported in government statistics, since it is cheaper to integrate these energy retrofits when undergoing other refurbishments.

 

6.4.             The current rate of improvements to buildings is far too slow.  If the way ECO is designed is changed, the rate of retrofits may increase. There are 3 possible solutions: 1) Power to deciding who shall receive a retrofit needs shifting to householders, away from energy companies who will not retrofit one house until they know it is the cheapest one to do. This disempowers householders and removes competition. If householders could directly commission their own retrofits and know that the energy company would be paying, this would increase retrofit rates.  A system to allow each neighbourhood to advertise that there will be retrofits available at certain times would be required so that economies of scale could be achieved.  2) Currently an energy company is allowed to see a row of 10 terraced houses and insulate only 7 of them if for some reasons (perhaps due to EPC errors) the carbon saving predicted by SAP for the other 3 is not enough this pepper potting is, common, inefficient, increases risk and causes resentment in neighbourhoods due to property price changes.  Ensuring a top-up budget is available so all homes in a street can be insulated would be an appropriate use of government funding.  3) Increasing the amount paid to energy companies for carbon reductions from different types retrofits could bring greater gains.  Perhaps paying less for carbon savings achieved via boiler replacements (easy) compared to different price for carbon saved in a rural solid wall off grid home (difficult), would level the playing field, making it more likely that a solid walls may get insulated as an uninsulated loft.

 

6.5.             Keen to explore the additional measures which may be needed to deliver energy efficiency improvements that could bring significant benefits.  Retrofit policy should: address behaviour change, allow individuals to choose their own retrofit options, deter under-pricing (race to bottom), prevent potential ‘lock-in’ of measures, be properly enforced (increased inspection rates), discouraging single measure retrofits, encourage difficult retrofits, enforce pre-design surveys, enforce treatment of underlying problems prior to retrofit.  ECO does not deliver these.

 

6.6.             The National Infrastructure Commission has recommended that the Government should be installing 21,000 energy efficiency measures a week by 2020, although current rates are just 9,000 a week.  Increasing the rate of insulation measures using existing ECO rules may have the perverse outcome of: further prioritising single measure retrofits, reducing retrofits (less time for surveys and design), reducing the number of companies taking on ECO work (tighter limits or delivering more with the same resources means companies do not take on ECO work), increase unintended consequences, increasing the cost of retrofit to band C (have to revisit the property multiple times instead of doing everything in one hit), limit innovation (time is needed to evaluate and take risks on novel technologies), ‘lock-in’ less efficient. It would be preferable therefore to change the way that ECO is designed, rather than simply increase retrofit targets.

References

BEIS 2017. Household Energy Efficiency Headline Release Executive Summary. In: DEPARTMENT FOR BUSINESS, E. A. I. S. (ed.). London: Statistical Release: National Statistics.

FYLAN, F., GLEW, D., SMITH, M., JOHNSTON, D., BROOKE-PEAT, M., MILES-SHENTON, D., FLETCHER, M., ALOISE-YOUNG, P. & GORSE, C. 2016a. Reflections on retrofits: Overcoming barriers to energy efficiency among the fuel poor in the United Kingdom. Energy Research & Social Science, 21, 190-198.

FYLAN, F., GORSE, C. & GLEW, D. Switch, Don’t Save. In: DASTBAZ, M. & GORSE, C., eds. Sustainable Ecological Engineering Design, 2016// 2016b Cham. Springer International Publishing, 355-366.

GLEW, D., SMITH, M. B., MILES-SHENTON, D. & GORSE, C. 2017. Assessing the quality of retrofits in solid wall dwellings. International Journal of Building Pathology and Adaptation, 35, 501-518.

GORSE, C., GLEW, D., JOHNSTON, D., FYLAN, F., MILES-SHENTON, D., BROOKE-PEAT, M., FARMER, D., STAFFORD, A., PARKER, J., FLETCHER, M. & THOMAS, F. 2017. Core cities Green Deal monitoring project. In: BEIS (ed.). London.

HARDY, A., GLEW, D. & GORSE, C. 2019. Assessing the equity and effectiveness of the GB energy price caps using smart meter data. Energy Policy, 127, 179-185.

HARDY, A., GLEW, D., GORSE, C. & FLETCHER, M. 2018. Validating solid wall insulation retrofits with in-use data. Energy and Buildings, 165, 200-205.

 

Submitted January 2019