The Conversation has shared five numbers that show the efforts needed to insulate Britain’s homes.
image: for illustration purposes only
…about 80% of all the houses that will exist in 2050 are the houses that people are currently living in…
The Conversation writes:
… Here are the five numbers that explain just how big a task it really is.
1. 68 million tonnes
About 15% of the UK’s total carbon emissions – 68 million tonnes – comes directly from homes, mostly from boilers burning gas for hot water and space heating. That’s more than the entire agricultural sector at 10%, and many times the 2% from industrial processes, such as cement, steel and chemical manufacturing in 2019.
2. 26 million
Some of the UK’s existing 29 million homes will be demolished by 205O, but it’s estimated that around 26 million will still be around. These will all have to be retrofitted to net zero standard.
To put that another way, about 80% of all the houses that will exist in 2050 are the houses that people are currently living in. Only 20% of the houses will have been built from scratch to net zero standard.
3. £26,000
The cost to retrofit a typical family home to net zero standard is estimated at about £26,000. This is based on an analysis of work by the Climate Change Committee – a body of experts that advises the UK government.
Multiply those 26 million homes by £26,000 and the overall price tag is £676 billion. Averaged over the next 25 years, retrofitting Britain’s homes could amount to £27 billion a year. That is about the same as the entire annual spend on home repairs and maintenance, and more than half as big as the market for new-build homes.
A mass retrofit campaign wouldn’t just be a step-change in the construction industry, it would be an entire additional sector. But it would also be time-limited….
4. 20 years
How quickly savings from an investment repay the initial expense is known as the payback period. In theory, a net zero house could have zero energy bills, as it would save and generate as much energy as it uses. The average annual energy bill is £1,289, so the payback period for a £26,000 retrofit would be just over 20 years.
But the payback period for each individual retrofitting measure tends to be longer. Improving window glazing tends to pay for itself after about 40 years….
5. 20%
The VAT rate applied to any work on existing homes – whether it’s maintenance, extensions, or retrofitting – is 20%. While there are some exceptions where the rate is reduced to 5%, these are only available to a small range of homeowners, such as those over 60, and only where the works are exclusively for the sake of energy efficiency, rather than as part of a broader home-improvement project. So the use of this rebate is minimal.
For private homeowners who are required to pay for retrofit measures like wall insulation or heat pumps from their own pocket, the so-called “able to pay” market, that 20% VAT might represent more than £4,000 of the estimated £26,000 cost.
By comparison, building a new home is zero-rated for VAT. This creates a financial incentive to demolish and rebuild rather than retrofit.
There have been many attempts to make the government change the VAT rules on this, including a recent one supported by the banking sector, but so far without success.
Decarbonising Britain’s housing stock is a huge challenge, but also a huge opportunity….
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