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Retrofit Detox

Energy Efficient Retrofit have become dirty words. However, David Pierpoint, chief executive of The Retrofit Academy CIC, explains why it’s time for:

Retrofit Detox

Former Energy Minister Greg Barker famously described the energy efficiency sector as a failed market. The Energy Act of 2012 was supposed to herald the ‘biggest home improvement programme since the second world war’, driven by two major policy initiatives you will likely recall: The Energy Company Obligation (ECO) and The Green Deal. These would create a flourishing market driven by household names that consumers would trust, with local authorities and energy companies investing in the future. We would be retrofitting one home a minute for thirty-five years and, as well as saving the planet, fortunes could be made.

As the decade draws to a close, the vision of a decarbonised housing stock appears no closer. Low demand, defective work and those dreaded unintended consequences combined to make retrofit a toxic word. But is it time for a detox? New BSI Standards, large scale pilots, new qualifications, industrialised processes and – you heard it here first – fresh government thinking are driving change. So what’s happening? How excited should you be about it? What does it mean for the retrofit industry and is it for real this time? 

Before we answer that question, we should consider what retrofit is and, importantly, isn’t. 

What is Retrofit?

The answer to this should be straight-forward – retrofit is the renovation of a building with specific objective of reducing the heat demand, making it more energy efficient. This is usually achieved through improving the building fabric but can also include building services and renewables too. The better retrofits tend to be the ones that consider the whole house as a system, rather than a collection of individual elements. 

There are 27 million homes in the UK, many of them aged and leaky. Therefore, we heat them more in order to maintain comfort, but we lose a high proportion of this heat through the porous fabric of the building. This represents money down the drain for home and business owners and makes a huge contribution to C02 emissions. With the UK government now legally committed to carbon neutrality by 2050, tackling the existing housing stock is therefore high on the list of policy priorities. Yes, it really is. 

The sheer scale of the problem and the cost of the solution is mind-boggling. Here’s the simple maths. 

Some studies suggest that for every £1 invested in to retrofit, the local economy benefits to the tune of £3. So there is the potential to create thousands of jobs too. Added to which, better insulation means lower fuel bills and therefore improved quality of living. Fuel Poverty, a blight on a civilised society, could be eradicated in a generation. Living conditions and indoor air quality could improve to the extent that the population would need less health care and older people would be able to live independently in their own homes for longer. Yes – the numbers involved in retrofit are vast and compelling.

Retrofit: A Wicked Problem

The numbers have been compelling for many years – all except for one: the number of retrofits carried out to the required standard. That 27 million homes-to-go target has never changed. In fact, we are building 250,000 new homes a year, and very few indeed are carbon neutral. Depressingly, 7% of newbuilds are classed in EPC Band D! So the number of properties requiring renovation before 2050 is actually rising. 

To make matters worse, The Green Deal and, especially, the ECO delivered a significant volume of defective work. Ofgem reported that Solid Wall Insulation projects funded under the ECO in 2015 had a 9.9% Type A Failure Rate. That’s the sort where major remediation is required, and a health and safety risk is a likely consequence. Furthermore, the wrong solution has often been applied at the wrong time with measures installed in the wrong order. Finally, even where there are no issues with the installation of a product itself, inadequate provision for ventilation has resulted in unintended consequences like damp, mould and condensation. Famous examples include the EWI Scheme in Preston where 390 houses were affected by severe water ingress due to defective workmanship. 

Defective work is typical of jobs where cost is the only real consideration and the ECO has certainly resulted in a race to the bottom. 

Chasing funding for ‘measures’ leads to inappropriate measures being installed to the wrong property at the wrong time. Under the ECO, thousands of new gas boilers have been installed without any remediation of the building fabric to reduce the heating demand. Residents may feel warmer, but the amount of heat loss would increase. This is totally counter-intuitive to the carbon-neutral 2050 vision. Likewise, insulating one external wall without addressing the remaining envelope simply leads to more heat escaping elsewhere. Providing funding for individual measures only is also counterproductive if reducing CO2 is the objective. 

So painful lessons had to be learned. In 2015, the government’s chief construction advisor Peter Hansford wrote a report on the solid wall sector. This concluded that standards were low, and the industry was not fit for purpose. Later that year, a new government-sponsored Review was set up to consider the state of all retrofit, including both fabric and renewables. It was eventually to become known as the Each Home Counts Review. It concluded that consumers were being put at risk by defective workmanship, and spawned dozens of Working Groups to examine solutions. It concluded that a new Quality Mark should be introduced that householders would become familiar with. The government-endorsed Trustmark has been selected for this purpose. To protect consumers, TrustMark endorsed schemes would have to abide by a Code of Practice and a Code of Conduct which would represent enormous change from current practices.  

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The New World

You may not have noticed, but in late June BSI published PAS 2035:2018 – Specification for the energy retrofit of domestic buildings. This has the potential to revolutionise the entire retrofit process. The government have proposed to make compliance with the Standard a mandatory requirement for all projects delivered using public funding, following a transitionary period expected to run until January 2021. It has the full backing of government, who have sponsored its development. In fact, they have been unwavering in their support. Even when powerful lobbyists representing the powerful supplier groups went on the attack, the commitment to the core principles at the heart of the PAS remained intact. Nobody in the energy efficiency sector can afford to ignore it, and those who do will fall foul of the new regime.

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So what are the key elements of PAS 2035? 

In terms of first principles, the PAS is a commitment to “Whole House Fabric First Retrofit”.

By “Whole House”, this means a detailed consideration through a comprehensive assessment of the significance and context of the house and the relationships between the fabric, services and occupants. This ends the era of ‘incremental measures’, by which individual measures are installed because the funding happens to be available, irrespective of what the correct solution is for that property. This is a sea-change for almost the entire industry and one for which you need to prepare.

By Fabric First, priority should be given to reducing the heat demand for a property as low as practically and economically possible before addressing building services or renewables. Walls, windows, ceilings and floors should be considered as one energy efficiency system, and the plan to improve them should be holistic in order to achieve airtightness. In concert with this, a strategy should be put in place to ensure adequate ventilation to compensate for the reduction in air leakage caused by the improved airtightness of the building envelope. Only once the new heat demand can be accurately determined should new building services be specified.      

This will end the market for installing funded, single measures. Instead, PAS2035 introduces a new retrofit process featuring: 

  1. The appointment of a Retrofit Coordinator to oversee the project from cradle to grave, with full professional accountability for compliance with PAS2035 and risk management;
  2. An in-depth retrofit assessment of a property, far more in-depth than the typical EPC surveys conducted at present. A Retrofit Assessor will be responsible for collecting the data, but it is to be provided to the Coordinator in order to develop plans for remediation. This is to be used by a Coordinator to develop an in-depth Medium Term Retrofit Plan (MTRP) and an Improvement Options Evaluation bespoke to the context of that property. The MTRP will outline a plan for the maintenance and upgrade of that property over a period of 25 years, essentially creating a roadmap to a carbon neutral state by 2050. Think of it like a car service schedule but for our most valuable asset – our homes. 
  3. A risk triage approach, in which measures in isolation or combination are assessed as low, medium or high risk. Dependent upon that risk assessment, the Coordinator will appoint specialist designers and installers with demonstrable skills and competences appropriate to the job.   
  4. Post-installation, the Coordinator should ensure that appropriate commissioning, testing, monitoring and evaluation is conducted, to ensure the building is performing as intended, without leaving a performance gap.  

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Retrofit Going Dutch?

For non-traditional homes, including the many post-war system builds, the prefabrication of panels made in a factory and craned in to position on site holds great potential for upscaling. It is an approach most often associated with Energiesprong, which means Energy Leap in the Netherlands homeland of the initiative. Successful pilots of this approach in Nottingham and Essex have yielded strong results in terms of energy performance, with disruption to tenants minimised. Jobs can be completed onsite in just a few days or less. Contractors don’t just build and leave but guarantee the energy performance of the building for many years. However, the approach remains costly and the number of suppliers able to deliver is small. 

To support the development of this market, the Department for Business, Energy and Industrial Strategy (BEIS) have launched a Whole House Retrofit Competition. The focus of this is to demonstrate how increasing the volume of properties to be transformed can lead to scale economies and process efficiency. Current projects are understood to be costing over £80,000 per unit, and one of the Government’s Grand Challenges is to halve the cost of deep retrofit by 2030. This is no easy task and you should track these projects carefully. If you are a retrofit contractor with no background in offsite construction, or a supplier not currently engaged in that market, I suggest you may want to get it on the agenda. 

Driving Demand in the Private Sector

The Green Deal was designed to create a market in the able-to-pay sector – homeowners with the resources to fund their own energy efficiency projects through affordable borrowing. The scheme was holed below the waterline when comparatively high levels of interest rates were announced and demand for Green Deal measures fell well below even the most pessimistic of forecasts. 

It was evident throughout that neither the government or the industry had understood the drivers of consumer choice around home improvement. A succession of campaigns based on environmental benefits met an audience more concerned with upgrading kitchens and bathrooms than saving the planet. Household names like B&Q, M&S and Tesco were touted as new entrants, took a long, hard look and made the sensible decision that The Green Deal was a dead duck. 

Recognising that generating demand is actually the most difficult challenge, BEIS have invested in to a series of pilot projects aimed at stimulating demand through local community groups and local marketing. Each of the projects in Bristol, Manchester, Sussex, Oxford, London and Cornwall have been tasked with properly understanding the needs of their would-be customers. If successful, their approaches will be rolled out nationally.           

Case Study: Retrofit Works

An initiative involved in these BEIS projects that is potentially signposting the way ahead is Retrofit Works. A cooperative of installers and assessors, Retrofit Works acts like a main contractor but acts on behalf of its members. They employ all the 2035 methodology and have trailblazed the Retrofit Coordinator role. Russell Smith, MD of Retrofit Works, explains why. 

Why have you decided to “go-early” with PAS2035?

In the context of timing, I’m sure it looks like we have ‘gone early’, but the reality is that with our members and other stakeholders, all we did back in 2013 when the Green Deal was emerging was to look at the needs of customers and the needs of the supply chain, and designed a model that considered all of their needs. 

We now have a project delivery mechanism that satisfies both the needs of customers and supports our contractor members through the entirety of the customer journey with a Retrofit Coordinator at the heart of that relationship. 

Does employing Retrofit Coordinators give you the quality control you need? 

A Retrofit Coordinator with appropriate experience suited to the job in hand, aligned with a competent contractor gives us the quality we need – and the customers service levels we need. We therefore have Retrofit Coordinators with a range of backgrounds from Architects to Gas Safe Engineers that we assign to jobs that most suit their backgrounds. The £4.5m Warmer Homes project for the GLA has utilised this approach throughout for over 1100 homes and the customer feedback has been outstanding.  

What have been the major lessons you have learned about driving demand in the private sector through your BEIS projects? 

It’s still very early days on these projects, but on all we have run workshops with contractors and RCs to work through their needs, and it has surprised me just how supportive the contractor community is toward the role of the Retrofit Coordinator. Across our three projects, 90% of the contractors have expressed support for the role of the Coordinator and how it can help them to do a better job for the customer.

The one major thing that has emerged from all of our work, however, is that the Coordinator is an essential translator of technical and commercial needs between the householder and the contractor members; one of the major reasons that conflicts arise in construction is either a lack of effective communication or lack of clarity on the design or aims for the work – the Coordinator cuts through all of that.

Retrofit Works Model

Retrofit Coordinator Qualification

You will already get the picture: Retrofit Coordinators are the key to the entire PAS2035 process. Keeping it simple, Retrofit Coordinators are the brain and conscience of all retrofit projects of the near future. Assessors no longer advise or specify, they collect data. Coordinators interpret that data, understand their client’s priorities and constraints and then develop a Medium-Term Plan and Improvement Options Evaluation. They advise on the appointment of contractors. They link together the assessment, design, installation, commissioning and handover stages, ensuring good clear communication. 

If that sounds like a very responsible, professional role – it’s because that is exactly what it is. A Retrofit Coordinator should be an experienced built environment professional, with a detailed understanding of construction, project management and possessing of all the soft people skills and technical knowledge you would expect of somebody you would trust to renovate your home. Until now, with notable exceptions, far too much influence and control has been in the hands of people with limited knowledge and training. A DEA, for example, can qualify in just a few weeks. Contrast that with the US, where DEA training lasts a full nine months and is fully paid for by the state!

Recognising both the need for appropriate retrofit training for would-be Coordinators and the financial realities of retrofit in the UK, my organisation The Retrofit Academy CIC has led the development of a Level 5 Diploma in Retrofit Coordination and Risk Management. It is awarded by an Ofqual-regulated Awarding Body, and it is referenced in the PAS2035 as the required Qualification for anybody wanting to become a Retrofit Coordinator. Only somebody holding this qualification can apply to become an Accredited Retrofit Coordinator with one of the TrustMark schemes, such as Elmhurst Energy.

There are strict eligibility criteria for the qualification, meaning that only experienced built environment practitioners with existing qualifications can be considered. However, no prior experience of retrofit is required as the course provides this. It features 12 in-depth eLearning modules containing the knowledge required to properly coordinate and risk manage the technical and process risks associated with retrofitting. Further details are available at https://www.retrofitacademy.org/.       

Sustaining the Growth Trajectory

Boom and then bust. That has been the story of energy efficiency for many years. Boom periods in which some hay is made, but which attracts the unscrupulous into an industry without adequate quality control. Followed by bust, which is just painful for everyone, but the cowboys turn themselves in to extractors rather than installers and still make a killing. This must end – but how do we achieve sustained market growth?

PAS2035 introduces a framework for retrofit which will deliver safe, high-performance projects. The numbers of projects initially may be small, but scalability can follow. Investors will need to invest in the supporting infrastructure, such as manufacturing plants for prefabricated panels and workforce upskilling. Social landlords, now more confident in their supply chains and with short term deadlines, will refocus on the task. A pipeline of work in that sector will provide a bridge to the tipping point at which owner occupiers will buy retrofit, and private landlords will be obliged to. You only have to look at the level of activity in Scotland driven by the Energy Efficiency Standard for Social Housing (EESSH) to see that the sector is easily motivated. 

With a supply-side getting itself in to shape, all that appears to be missing is clear, consistent and ambitious government policies. The successor to ECO3 will be critical. One senses that all the R&D, pilots and trials are building towards something far more ambitious. Whether that remains driven by the big energy companies remains to be seen – the motivation for energy suppliers to reduce demand for their own product has always been a seeming contradiction. The trigger could of course be a Labour-led government, who have promised a retrofit programme as a matter of national infrastructure. Perhaps we will be clearer once Brexit (yes, 2700 words into this article and I finally mention it) and the small matter of a possible autumn General Election is out of the way. Whichever way, it needs to be big, bold and decisive and you all need to be ready for it. 

It is an enormous challenge, but the built environment has thrived when forced to innovate before and there is little doubt that we will work out how to deliver retrofit at scale from a technical and supply-side perspective. There should be little doubt either that a market for retrofit in social housing is almost upon us, notwithstanding some incentives and investment from central government. Demand in the private market remains the great unknown, and where the greatest opportunities lie. But if you thought retrofit is still toxic, it may be time to break out the Mick Jagger Detox Kit and look at it with fresh eyes. 

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