The Race To Retrofit: Government’s Essential Role In Enhancing The Energy Efficiency Of Existing Buildings

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The Race To Retrofit: Government’s Essential Role In Enhancing The Energy Efficiency Of Existing Buildings

Historically, most countries have approached retrofit policies in an inconsistent and insufficient manner, resulting in a sluggish annual retrofitting rate of only 1% for existing buildings. However, awareness of the criticality of deep building renovation is starting to spur government action. Why? Because a staggering 80% of the buildings that will exist in 2050 already stand today, making it essential to retrofit these properties for countries to achieve their 2030 and 2050 decarbonization targets. The scale of this challenge has left governments feeling the pressure to introduce new financial and policy instruments. These measures aim to establish the framework for comprehensive building renovations across asset types, incorporating principles related to target-setting, investment and regulation.

On January 3rd 2024, the UK Government unveiled new plans aimed at boosting energy efficiency in existing residences, as part of its pledge to reach net zero by 2050. The commitments set out include reforms to the planning system to support building improvements, modifications to energy performance certificates (EPCs) to ensure they are accurate and reliable, and a new national development management policy specifically for historic buildings. Currently, most UK homes have gas heating systems and only 40% have an EPC rating of C or higher, underscoring the mammoth task that lies ahead. Consequently, these commitments necessitate equally mammoth levels of investment. To support property owners seeking to retrofit, consistent funding programmes akin to the Boiler Upgrade Scheme are required. This scheme provides households with grants ranging from £5,000 to £7,500 to cover the replacement of fossil fuel heating systems with a heat pump or biomass boiler.

The UK is not alone in the retrofitting endeavour; the US continues to roll out its federal building retrofit plan, armed with $3.4 billion allocated through the Inflation Reduction Act. The plan aims to transform the US General Services Administration (GSA) real estate portfolio into net zero buildings by 2045. Several EU countries are also stepping up to the challenge, including Germany, the Netherlands and France. Germany, for instance, announced a whopping allocation of €56.3 billion from the federal budget to support building retrofits between 2023 and 2026. Despite these strides, significant gaps in global retrofitting efforts remain apparent; China, South Africa and Indonesia are devoid of comprehensive retrofitting policies and possess building stock that is woefully unprepared for the future.

The Global Retrofit Index, developed by 3Keel in association with Kingspan, delivers a stark message that governments are still under-investing in energy-efficient building upgrades, and that retrofitting rates are falling short of the necessary levels. This calls for policymakers worldwide to step up and ignite government action, recognizing that upgrading existing buildings is not just an option but an essential strategy to decarbonize the built environment. To get there, we need tougher minimum building performance standards, time-bound targets on the path to a net zero 2050 and – most importantly – financial support, including grants and tax breaks for those embarking on the retrofit revolution. These government-led initiatives have the greatest power to instigate large-scale change, surpassing what organizations or homeowners alone can accomplish.

To learn more about retrofit and improving existing building performance, check out Verdantix Smart Tech For Building Retrofits: What Are The Viable Strategies?

Amelia Feehan

Senior Analyst

Amelia is a Senior Analyst in the Verdantix Smart Buildings practice. Her current research agenda focuses on digital twins, IoT solutions and architecture, engineering and construction (AEC) software. Prior to joining Verdantix, Amelia worked as a façade engineer at Arup, where she gained experience in sustainable building design and construction. She holds an MEng in Civil, Structural and Environmental Engineering from Trinity College Dublin.