How Much Would it Cost?

Robin McAlpine – 7th October 2021

Did Glasgow City Council do Scotland a favour by saying out loud how much it would cost to get all its housing stock up to reasonable energy efficiency standards but then unconvincingly fluffing the line about how it was going to pay for it? Yes, it probably did, because it prompted a debate we very much need to have which we’re not having.

Heating houses in Scotland produces nearly three times as much carbon as all of our transport combined and many multiples of how much we belch out generating electricity. Everyone knows we need to fix this; no-one is talking about how to pay for it. But we really need to talk about it.

Glasgow has priced the cost of retrofitting insulation to all its houses at about £11 billion and that is roughly in line with Common Weal’s costings for the whole of Scotland where we think that about £40 billion is needed (plus another £25 billion to replace current heating systems).

This is big money because fixing the environmental performance of housing is expensive, time-consuming and varies greatly from house to house. We priced it at about £15,000 per household (£25,000 including heating) based on real-world case studies. Those case study numbers are higher but they have tended to be based on houses with particularly poor environmental performance. Economies of scale should help too – if it’s all done right.

But these are averages; some houses will cost a lot more, some much less. The problem is you don’t really know until you start looking at a specific house (though a street of houses of the same construction will have similar issues). There really is no ‘one size fits all.’ 

So there isn’t a cheap way to do it because it is labour- and material-intensive. Doing it ‘nearly’ properly can be as bad as not bothering. Insulating a loft badly is like fixing two out of three punctures in a bicycle tyre.

But there is an expensive way to do it. Do a house at a time so contractors drive to the same street on multiple occasions. Avoid efficiencies of scale by not bulk purchasing materials. And above all, do it twice.

Doing it twice is what happens if you upgrade a Band D house to Band C, and then go back later to get it from Band C to Band A. On your second visit you’ll create all the disruption to the householder again and then you’ll very probably have to undo work you did the first time.

For example, a more efficient gas boiler might get you from D to C but will then have to be replaced again if you want to get from C to A. Retrofitting a house is not an incremental process.

There are very broadly three steps which need to be taken to get to a decent environmental efficiency – they can and should all be done at the same time. First you need to stop heat that is escaping through surfaces which let heat pass through like single pane windows or uninsulated roofs. These need to be replaced or insulated.

Then you need to stop heat that is simply leaking through gaps in the form of drafts. That means tackling leaky window frames or gaps in the fabric of the building. By far the two biggest factors are heat escaping through roofs or windows and heat lost in drafts. Wall insulation is usually less important than draft-proofing.

The third element is reducing the energy needed to run the house by installing more efficient heating and using measures which reduce the amount of hot water needed for things like washing or electricity for lighting.

Common Weal would add to this that being environmentally responsible also means selecting what materials you use to carry out the work. Sure you we can buy foreign-produced plastic-based insulation products but the environmental impact of domestically-produced wood-based insulation is much, much lower.

So if this is the broad picture of where we need to go and what we need to pay, where are we now?

For years governments across the UK have ducked the issue by basically farming the problem out to householders through small grant schemes. You can do the survey, get told what needs installed in your house and get a partial grant to install it. You’ll be given a list of possible contractors (if they haven’t already cold-called you) and you need to get on with it from there.

But if you do a web search on the words ‘home insulation’ and ‘scandal’ or ‘scam’ you can spend the rest of your day working your way through examples of how this system is rife with abuse. And, problematically, it is not unreasonable to call the official approach dodgy as well.

Even if you go through a government-approved scheme administered by a government-approved agency you are still getting a shoddy service. You fill in a questionnaire, but you’re not a qualified surveyor and the entire remedial plan will be based on your guesstimates.

And the work will be done by a contractor but the quality of their work won’t be assessed after the job is done – and badly-fitted insulation can produce results which are in the ballpark of ‘not bothering’. (If you get solid foam insulation and the installer doesn’t taper it right in to the edges of your loft, heat will simply pour up the inside walls of your house and straight outside the big gap round the outside.)

Oh and if someone tells you that you’ll recoup the cost in saved energy bills they’re almost certainly not telling you the truth. At an average cost of installation you’d be lucky to save enough on your energy bills in your lifetime to break even.

But this is all very attractive to policy-makers because it’s cheap (for them) and it offloads the costs onto householders. Unfortunately it doesn’t deliver the outcome. The houses that need upgraded most are the ones which this scheme won’t help (often the poorest households which can’t afford the enormous costs, small grant or no small grant) and it’s hit and miss whether you get anything like the outcome the computer model says you will.

This is the problem Glasgow has – the Council hope that some of its other green schemes can pay for themselves through effective privatisation but there is no real financial return on fixing housing. It just needs done and someone needs to pay for it.

Until we bite this bullet we’ll continue to push this problem into the future. It will take time to scale up supply chains and train a workforce to do this properly and the longer we wait the more certain it becomes that the next 30 years will just be a string of missed environmental targets and increasingly desperate ‘offsetting’ measures to massage the figures and make it look like we reached ‘net zero’.

Common Weal has a clear plan. We would pay for this collectively through taxation so the burden is shared fairly. We’d link it to an industrial strategy to train a workforce and build up domestic supply chains. We’d set up a National Housing Company to employ staff and do the work.

We’d get rid of the daft guesstimate that is an Energy Performance Certificate and instead use real energy usage data to assess environmental performance and get professional surveyors to assess a building and prepare a plan for upgrade. We’d have the work done a neighbourhood at a time to maximise efficiency and minimise disruption.

And we’d do everything possible to repay the cost by maximising the economic impact of the work by integrating it into a comprehensive Green New Deal – with our model it could all pay for itself, but we’d really need the powers of independence to pull that off.

That model works – so if it’s not this, what is it? Setting more targets, chucking around a few million for insulation (which will just be sucked up by the ‘home energy efficiency empire’ which has grown up around the current scheme), and faking it for another ten years until it is clear this has all failed?

Sadly that seems to be the current plan. Which is why anything that will stimulate a serious national debate has to be welcomed.