16 February 2023

Energy efficiency of buildings and homes is at the forefront of everybody's minds amid the ongoing energy crisis. With the UK's buildings contributing around 20% of its carbon emissions, enhancing buildings to be more energy efficient is crucial to tackling both fuel poverty and decarbonisation. Schemes like Bristol City Leap are investing in solutions with the aim of increasing energy efficiency and helping the city of Bristol to meet its decarbonisation goals. Yet such schemes at city or local level will not be the whole solution – without national investment and strategic planning, uptake of retrofit schemes will not reach the scale required to achieve the UK's net zero commitments.

Net zero strategy – falling short on the built environment

The Climate Change Committee's 2022 Progress Report to Parliament highlighted that while net zero policies covering the built environment sector are in place, policy gaps mean delivery risk has not been addressed sufficiently. The report picks out two main areas where the sector is falling short:

1. The rate of uptake of low-carbon heating solutions (such as heat pumps) is nowhere near the level required; and

2. Current policy is insufficient to ensure that buildings reach an EPC rating of C by 2035 – only two thirds of buildings meet this goal now.

The Green Homes Grant, aimed at funding energy efficient home improvements, was widely criticised and scrapped within a year. One of the main criticisms levelled at the scheme was its failure to account for the time needed to train specialist installers. Such skills shortages will be one of the delivery risks which government policy must bear in mind if its built environment net zero policies are to have their intended impact.

Energy efficiency taskforce – a step in the right direction

Many have welcomed the autumn statement's announcement of £6bn of funding for energy efficient building improvements between 2025-2028. This comes alongside a new commitment to achieve a 15% reduction in energy consumption from industry and buildings from 2021 levels by 2030.

Another measure announced in Jeremy Hunt's autumn statement that has sparked industry interest is the new energy efficiency taskforce. Full details of the taskforce's remit have yet to be released, though Jeremy Hunt said it would be "charged with delivering energy efficiency across the economy". It seems likely that the taskforce will aim to encourage energy efficient retrofit projects. Industry leaders have praised the potential of such a taskforce – indicating that it could bring about a holistic approach to energy efficiency strategy and educate the public (which in turn should increase uptake).

As highlighted by Simon Allford, RIBA president, acting on the lessons learned from the Green Homes Grant will be vital to ensure the new taskforce's success.

Financing energy efficiency retrofit – recommendations for a new model

A report commissioned by Bankers for Net Zero finds that a new government policy framework is key to promoting the private finance of these types of project: a cohesive and efficient private financing model would clearly help encourage private investment. The report recommends linking such financing to property-related reliefs, such as stamp duty discounts to enable capital investment in energy enhancements.

Key next steps – funding and holistic strategy

The autumn statement indicated a clear intention to improve energy efficiency by consolidating the built environment net zero strategy. But past policy failures and industry feedback shows that there are hurdles to overcome on the journey to decarbonising the built environment and addressing fuel poverty. Without a sustained, far-reaching strategy, focusing on skills needed to deliver energy efficient solutions, and a clear funding system, we are unlikely to see the uptake in retrofit projects required for the UK to hit its net zero targets. The positive reception of the new energy efficiency taskforce and industry engagement demonstrates that the construction industry is eager to step up.

Time will tell if the proposed policies prove to be the boost needed to set the built environment on track to net zero. 

Related article: Decarbonising UK homes - the future is retrofit is available on our website.

Key contact

Steven James

Steven James Partner

  • Construction and Engineering 
  • Energy and Utilities
  • Construction Disputes

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