Rocketing energy prices and record-breaking temperatures are keen reminders that the UK is facing crises in fuel poverty and climate change. For local authorities, housing associations and the energy consultants working on their behalf, there is an increasingly urgent need to protect vulnerable households from rising costs and achieve net zero carbon emissions. Stewart Little, CEO of IRT Surveys, explains how these important targets can be delivered through data-driven retrofits.

When Ofgem raises the price cap again in October, the number of UK households crossing the fuel poverty threshold is predicted to reach over 8 million. Within that figure, which represents a fair percentage of the entire population, will be the majority of the country’s social housing residents. This is happening against the background of worsening climate phenomena, with intense storms, floods, heatwaves, and wildfires threatening lives and disrupting infrastructure. 

Energy consultants have long understood that at-scale retrofits can play a pivotal role in helping to solve these problems: they have been proven to reduce building emissions. What is not clear, however, is what an effective retrofit strategy looks like, how much it will cost and how to find the necessary funding. That clarity can be found by adopting a data-driven, ecosystem approach in which the project stakeholders’ perspectives are combined and where retrofit plans are aligned.

Laying a data foundation 

Understanding the current state of a housing portfolio provides a secure foundation for a clear retrofit pathway. Although this is an essential first step, housing providers and energy consultants cannot simply rely on existing EPCs and stock condition surveys as these may be obsolete, inaccurate or duplicated across different properties. 

The most effective approach to tackling this issue is to deploy specialist AI tools that can eradicate data gaps and uncover inconsistencies. Once these insights have been obtained, they can be unified with thermal imaging and archetypal building performance data to provide a highly detailed overview of the portfolio’s condition. 

With thermal imaging delivering accurate, unbiased energy loss measurements across individual properties, and archetypal building data providing typical energy consumption, based on homes with similar construction, housing providers and energy consultants are swiftly given a clear view of building usage and energy consumption. This data provides an accurate baseline for the retrofit project. 

Thermal imaging is particularly useful because it is non-invasive and it detects energy efficiency issues that traditional surveys fail to discover, such as half-filled or empty wall cavities, waterproofing and rendering weaknesses, draughts and porous brickwork. Left undetected, retrofit work might still result in energy leakage and prevent residents benefitting from cost savings. 

The value of these energy insights is that they help stakeholders identify viable decarbonisation routes, not just with regards to the choice of which retrofit works to carry out, but in terms of business case viability too. 

By utilising AI, stakeholders can analyse thousands of different retrofit bundles to ascertain which is the most appropriate for their portfolio. Housing providers and energy consultants can benefit from on-screen displays of previous, current and future energy scenarios, for individual buildings or entire portfolios, together with anticipated energy outcomes, costs and savings. 

Delivering project confidence 

While it is important to predict key metrics like EPC uplift, energy bill savings and project pricing during the planning stage of a retrofit scheme, the final outcome can vary substantially from the initial expectations. This is why risk quantification has become an important strand in the journey. 

In understanding the probability and extent of project underperformance, stakeholders can be confident that anticipated outcomes will happen. What’s more, as risk is evaluated on a sliding scale, retrofit measures can be fine-tuned to match risk appetites. 

Risk quantification is of even greater value when linked with an insurer’s underwriting criteria, as housing providers are able to understand the project’s chances of success while guaranteeing retrofit performance and financial outcomes. In this sense, the project becomes a financial asset instead of a potential liability. 

Efficient funding 

As insurable, ESG financial assets, investors are better able to understand retrofit projects and are more inclined to back them. This helps stakeholders unlock efficient, high loan-to-cost institutional funding which is of paramount importance given the £96 billion it will cost to decarbonise the UK’s 4.4 million social housing properties by 2050.  

Additionally, by combining private and public funding, social housing providers are able to extend existing budgets and implement deeper retrofits. Another advantage is that by using a pay-as-you-save model, a proportion of realised energy bill savings can be utilised to pay back third-party loans. And while residents will already benefit from more energy-efficient homes, up to a quarter of the bill savings can be left with them, from the outset, to cover further price hikes in the future. Once all third-party investment has been repaid, this can increase to 100%. 

A sustainable future 

Using an ecosystem approach, energy consultants, housing associations and other stakeholders are provided with impartial, data-driven insights that highlight the optimal balance between carbon reductions, resident experience and funding availability. 

For residents, this offers the prospect of warmer and more comfortable places to live while protecting them against future price increases and the damaging impact of fuel poverty. 

From a climate perspective, data-driven retrofits with clear plans provide the most effective means to reduce energy wastage across large portfolios, significantly cutting CO2 emissions in the process. As a result, housing providers can meet legal targets and do so using off balance sheet treatment, without eating into already limited budgets.

For further information, visit: www.irtsurveys.co.uk