We can end fuel poverty with £15bn retrofit investment plan for our homes, says Future Generations Commissioner for Wales
Fuel poverty could be eradicated in Wales by 2030 if Welsh Government commits to a long-term plan to improve the efficiency of our homes, says the Future Generations Commissioner for Wales.
A £15bn investment plan for housing is urgently needed and would, according to Sophie Howe in a new report, be a “game-changer” for the Welsh economy and – critically – help Wales and the UK meet their carbon emission targets.
The long-term plan to ‘retrofit’* homes to reduce heating/energy demand would create 26,500 jobs by 2030, saving bill-payers hundreds of pounds each year, while also improving and modernising Wales’ housing stock – and the commissioner wants Welsh Government and Westminster to take up the challenge together.
Wales has some of the oldest and least efficient housing in Western Europe and around 155,000 (12%) of Welsh homes are in fuel poverty**, a figure which could even be higher, due to the economic impact of Covid-19.
More than 66,000 households in Wales have fallen behind on their energy bills since the start of the pandemic, says Citizens Advice, and disabled people are four times more likely to be in energy debt.
Vulnerable people living in a cold home have an increased chance of serious illness or death, according to the National Institute for Health and Care Excellence, and are at higher risk of heart attack, stroke, breathing problems, flu, depression and falls.
The commissioner’s new report, Homes fit for the Future: The Retrofit Challenge, in partnership with New Economics Foundation, finds that a Welsh housing decarbonisation programme could have a huge impact on Wales’ social, economic, environmental and cultural well-being by:
- Eradicating fuel poverty and saving £8.3bn in energy bills by 2040.
- Reducing the strain on health and social care services, particularly during the winter – generating a cost saving to the NHS of £4.4 bn by 2040.
- Creating new industries, skills and jobs, based on local supply chains – 26,500 new jobs by 2030, helping to offset the economic impact and job losses of the pandemic. Jobs could include in areas such as installation of solar panels and ground source heat pumps, retrofit assessing and coordinating. Many are roles where existing trades can upskill/ retrain into, via ‘feeder trades’ such as electrician, plumber, plasterer.
- Creating £19.32bn in additional GDP and £3.54bn of net tax benefit by 2030.
Welsh Government has a legal duty to reduce harmful greenhouse gas emissions to reach ***net zero by 2050 – and 10% of Wales’ emissions come from the residential sector, one of the slowest areas across the UK to decarbonise.
Wales’ Well-being of Future Generations Act requires Welsh Government to use joined-up thinking to develop long-term solutions and prevent problems, and a ‘Retrofit Plus’ approach, the commissioner said, should be used to improve communities in line with the Act, while housing investment should be treated as essential infrastructure – as important as public transport and power.
The poorest and most marginalised populations are least responsible for climate change but the most likely to be exposed to its negative effects, more susceptible to damage and have the least resources to respond, cope and recover, so Wales should target the worst homes first, the report finds.
Welsh Government also needs to urgently address the skills gaps in retrofit jobs, both in numbers and diversity, or risk having an ill-prepared workforce.
The report also suggests a new Welsh Energy Service Company is set up to coordinate and fund improvements, with new legal requirements for homeowners to bring their homes up to standard, alongside loans to support the improvements.
But Ms Howe said it was up to both Welsh and UK governments to fund the retrofit challenge. She wants both administrations to work together, using all financial levers available to them, to demonstrate their seriousness on climate action in the run-up to COP, the major UN climate conference in Glasgow this November.
Ms Howe said: “The climate emergency and fuel poverty are two parts of the same problem and if we are truly determined to solve it, we need ambitious and interconnected policy actions.
“Right now we have the chance to do something life-changing for the families, pensioners and people who simply cannot afford to heat their homes properly, and to eradicate fuel poverty for generations to come.
“The Well-being of Future Generations Act says that by law, the way we get to net zero has to improve Wales’ well-being as a whole.
“A long-term plan to decarbonise Wales’ housing stock isn’t merely an aspiration, it’s an absolute necessity – and it’s the only way to pull thousands of people out of fuel poverty as part of a true green, just and equal recovery – and show just how far we can go as a country as the world combats climate change.”
Lead author of the report, Donal Brown, sustainability director at Sustainable Design Collective, said: “This report makes the case for a ‘Marshall plan’ scale investment for Wales to get on track for housing decarbonisation. While we see a central role for government in reducing fuel poverty and helping those on low incomes, we also propose a major role for private investors in the form of green bonds and green mortgages. Importantly, finance alone will not solve this challenge with regulation, skills and coordination essential to deliver the vast benefits of this program over the next decade.”
Chaitanya Kumar, head of environment and green transition at NEF, added: “The housing stock in Wales is some of the leakiest in the UK and needs urgent upgrading. This comes at a cost but it also brings immense benefits by creating thousands of jobs, slashing energy bills and improving public health. Our report lays out a clear roadmap for the next decade that brings public and private finance together to help bankroll Wales’s ambitious decarbonisation targets but Welsh government needs to lead the way with urgent public investment at scale.”
Jack Wilkinson-Dix, Policy Officer, Energy Saving Trust, said: “We can reach Wales’ carbon emission reduction targets while improving the lives of all residents and tackling fuel poverty, but this will require significant investment in the improvement of home energy efficiency.
“The Future Generations Commissioner’s new report, Homes fit for the Future: The Retrofit Challenge report gives a clear picture of the scale of the challenge and sets out a series of suggested pathways to address it across different housing types and tenures in Wales with the costs not unfairly placed onto households.
“As well as improving our homes, reducing carbon emissions and lowering energy bills, investing in home retrofitting is projected to create tens of thousands of jobs and boost local economies across the country. This programme must be an infrastructure priority and we continue to look forward to working with Welsh Government to deliver the necessary improvements to homes across Wales.”
Andy Sutton, co-founder, Sero: “We welcome this report, which highlights that decarbonisation can deliver benefits for current and future residents beyond the climate emergency and net zero. Finding and reframing financial solutions is key to unlocking these, and we’re fortunate to be working with many social housing providers and financial institutions to explore the multiple routes that are needed. Together these can align and support the necessary grants with public and private financial solutions to keep Wales leading the decarbonisation journey.”
Ben Saltmarsh, Head of NEA Cymru, said: “Everyone in Wales should be able to afford to enjoy a warm and safe home. This is a crucial decade, in which we can make serious progress. In the path to net zero lies a critical opportunity to improve the lives of fuel poor households as we decarbonise and upgrade the energy efficiency of our existing housing stock.
Whatever pathways are chosen, housing retrofit is of central importance. It sits at the heart of decarbonisation and tackling fuel poverty, is good for the Welsh economy, and will bring vital benefits not least to the well-being of low-income and vulnerable households.
We strongly welcome this report from the Future Generations Commissioner for Wales. Eradicating fuel poverty requires ambitious, joined-up policy action, with appropriate and guaranteed support for those who need it. Wales must target the worst homes first to ensure a just transition. We cannot afford to leave those most in need, behind.”
Notes to editors
- *Housing retrofit is the process of improving and future-proofing homes to make them more energy efficient, reducing energy demand and therefore emissions, while also considering issues such as damp and ventilation. Retrofit involves alterations and renovations to homes as well as installing new features such as renewable energy, in response to rising fuel prices and the environmental need to reduce energy consumption and achieve climate change targets.
- **A household in fuel poverty is defined by Welsh Government as one where someone is living on a “lower income” in a home which cannot be kept “warm” at “reasonable cost”.
- ***Net zero refers to the balance between the amount of harmful greenhouse gases (which have far-ranging environmental and health effects) produced and the amount removed from the atmosphere.
- The report finds 12% of people in fuel poverty could save up to £613 per year on energy bills if retrofitted to EPC ‘A’, saving a total of £8.3 bn by 2040. An EPC is an Energy Performance Certificate, which sets out the energy efficiency of a property on a traffic light system of A to G – A being the most efficient. Based on existing investment plans and policy proposals, there are currently large funding gaps for social housing (£2.7bn) and fuel poverty (£3.9bn) to meet the level of EPC “A” by 2030.
- The report finds £14.75 bn is the total investment needed by 2030 to retrofit all homes in Wales. That’s £5.5bn for social housing, £4.8bn for homes in fuel poverty, and £4.4bn for homes in the owner occupied and private rented (‘able to pay’) sectors respectively.
- In order to meet the £14.75 sum, the report suggests that total government investment required is around £5.3bn over 10 years, of which £3.6bn should come from UK and £1.7bn from Welsh Government (£732m to address fuel poverty and a new £1bn social housing decarbonisation grant) with 64% of total investment coming from private finance, energy companies or self-funding by property owners.
- A new Wales Energy Service Company to coordinate and support decarbonisation in the social housing sector, along with an enhanced role for the Development Bank of Wales to coordinated funding for the private rented and owner occupied sectors, could allow Wales to explore and implement future-fit solutions for heating and improving our homes, the report finds. The WESCO would combine grants and loans into a single performance contract for homes. This would fund improvements to tenants’ homes, and would be paid back via their energy bill.
- With a remit set out in law, Sophie Howe is the world’s only Future Generations Commissioner. She took on the role after Wales introduced the pioneering Well-being of Future Generations Act in 2015. Her job as the ‘guardian of the interests of future generations’ is to advise the Government and other public bodies on delivering lasting social, economic, environmental and cultural well-being.
What’s happening in Wales?
- Welsh Government has allocated £50m this year for its Optimised Retrofit Programme to test retrofit across Wales – last year it supported schemes from four local authorities (Denbighshire, Ynys Mon, Carmarthenshire and the Vale of Glamorgan) as well as a larger collaborative project involving 27 social housing providers from across Wales, led by Pobl Housing Group and managed by Sero. The project will help 1,300 homes on the path to net zero, and develop tools and resources for a large-scale decarbonisation of all homes across Wales.
- Housing association, Pobl Group, runs a Penderi Energy Project, part-funded by the European Regional Development Fund through the Welsh Government, a flagship programme to decarbonise homes and aims to achieve zero carbon communities. The project involves the installation of 644 solar panels and battery packs. Solitaire Pritchard, director of Regeneration, welcomed the recommendations from the commissioner and said the organisation was working closely with Gower College and partner organisations to deliver its ambitions for a greener and prosperous economy. She said: “Our aim is to ensure wider community benefits through the scheme by encouraging young people and local people to access work placements, training and apprenticeships, creating a lasting legacy and impact on the goals in the Well-being of Future Generations Act.”
- Swansea Council is working on the links between solving homelessness, reducing carbon emissions and fuel poverty by working on all issues holistically through its well-being objectives and integrating energy efficient technology in affordable housing projects.
- One of the key recommendations passed by the recent Blaenau Gwent Climate Assembly, receiving 86% of the vote, was on housing retrofit, to: ‘train local trades people, create qualifications and upskill local businesses, involve FE colleges and local universities, future proof it and provide the right courses to enable them to do the work in all green construction.’
Case study 1
Jack Goddard lives in Splott, Cardiff with his partner and four children.
The 34-year-old is currently installing ground source heat pumps to 25 properties in Caerphilly, with 30 more lined up for installation later this summer.
Jack is on a four-year apprenticeship with engineering contractors, Gibson Specialist Technical Services, after making the move from gas installation to retrofit. He now spends one day a week at Coleg Gwent, studying for his NVQ two and three, in plumbing.
“Plumbers are in such short supply. I was given my own van, training – I’m learning new skills all the time,” said Jack, who qualified for ground source installation work after a week-long course.
‘’On an average day, we’ll be taking out the old solar thermal from a house, taking it apart, installing a new ground source heat pump – the whole thing takes about five to seven days per house. You’d be amazed by how much money people save, just by adding a new boiler, insulation, maybe some solar panels.
“One tenant on another scheme told me she had saved £40 on her electricity bill every month.
“A lot of people just need to see it to understand it, and once you get the technology fitted, and you can look at the meter and see how much less electricity you are using, or gas, it makes it real for people. They can literally see that their house has generated 7,000W of electricity while they’ve been out at work.’’
Jack said working in retrofit had made him more aware of the part that homes can play in fighting the climate emergency, and that people should be given financial help to retrofit their homes.
“I live in a pre-fab and I’ve said to my landlord – he needs to apply for these schemes so we can get our house done. I remember when we were doing one scheme [through Arbed, Welsh Government Warm Homes, which works with local authorities to install energy efficiency measures in properties across Wales] they let us do the private homes too, and that was a big help because otherwise it causes a lot of tension if you’ve got people who own their own homes living next door to people who are having their house retrofitted by their housing association.
‘’Since I’ve been doing all these green energy installations, it’s definitely changed my own behaviour – I’ve switched to using my boiler on eco mode, put in energy saving lightbulbs, I’ve installed insulation in my loft.’’
Jack said his youngest daughter is now keen to follow in his footsteps in a job in housing retrofit.
‘’I would say to anyone interested in a job in housing retrofit to just go for it – there’s a huge shortage out there in plumbing especially – and don’t wait.
“I messed around when I was young and it’s only now I’m going to college and getting properly trained up. If you are interested don’t hold back, get yourself on a course.’’
Case Study 2
Engineer Rebecca Davies, 30, from Llysfaen, Old Colwyn, is spearheading a campaign to inspire more women to enter the construction industry.
Rebecca, who performs vital work at thousands of properties, is helping to shatter stereotypical views about all gas engineers being male, in her role with housing association Cartrefi Conwy.
Many job opportunities in the decarbonisation industry will involve people, like Rebecca, in existing trades, who have plumbing and gas installation expertise and can be upskilled or retrained to move into installing ground source heat pumps, solar thermal and other technologies. A recent report by the Future Generations Commissioner found white males were currently over-represented in many green jobs in Wales.
Rebecca said: “‘I’ve got a little girl, so when I think of the importance of taking my work in this direction, I think about it being for her future.
“I think my role will definitely change in the future because of the need to decarbonise homes – I’m keen to keep up-to-date and continue learning new skills so I can be a part of this work over the next few years.
“When I started for instance, I only had my natural gas certification, and now I’ve registered for LPG (Liquified Petroleum Gas), and there’ll be more changes to come so I can get involved with the installation of greener options.”
The role is having an impact on the choices she makes in her own home, too. Rebecca recently had solar panels installed, and is using half the electricity on average per month.
She said: “The panels have really got me thinking, what next? Anything that can save me money as well as making a difference [on climate change] has got to be a win-win.’’
When Rebecca told her teacher she wanted to be a plumber, she was told it wasn’t possible. Spurred on to prove the teacher wrong, she completed her plumbing apprenticeship at Coleg Llandrillo in Rhos-on-Sea, following it up by becoming qualified as a gas engineer. She’s worked for Cartrefi Conwy for seven years.
She has since helped inspire women as guest speaker on an exclusively female Passport to Construction course, run by Creating Enterprise, a subsidiary of Cartrefi based in Mochdre, near Colwyn Bay, and hopes more women will feel confident to start out into construction and engineering trades like plumbing.
“People can still have a stereotypical view of what an engineer should be like and act surprised when a woman turns up at their door, even though we have done the same courses as the men to become qualified,” she said.
Creating Enterprise is now holding further Passport to Construction courses in North Wales, open to men and women who have been unemployed for more than 12 months.