Business leaders call for National Deal on Net Zero Homes

A heavyweight business commission has recommended the introduction of a National Deal on Net Zero Homes to help the economy recover from the coronavirus pandemic.

The Covid Recovery Commission, which is made up of ten of the UK’s top business leaders, has recommended the national deal to decarbonise the nation’s housing stock in a new report, published today.

The paper, Ambition 2030: A Partnership for Growth, has been drawn up by the group as a blueprint for the UK’s post-pandemic recovery.

It says past housing decarbonisation policies, such as the recently cancelled Green Homes Grant voucher scheme, have lacked “long-term finance, focus and political buy in”.

And the commission says “progress to date has been slow” on decarbonising homes despite reductions in emissions across the building stock via low-carbon heating, high-performance fabrics and smart Internet of Things devices.

The report says the private sector requires clarity over long-term policy in order to commit to investment and develop skills, capability, business models and supply chains.

The commission recommends the development of a National Deal on Net Zero Homes, a 15-year programme to decarbonise the UK’s housing stock.

The new deal would support “significant” investment and innovation opportunities and back the creation and growth of businesses, particularly amongst the SMEs that provide the majority of home energy efficiency installations.

The commission recommends that the rollout of Local Area Energy Planning (LAEP) should play a central role in delivering the national plan.

It says the LAEP, which has been developed by the Energy Systems Catapult and trialled in Manchester, Newcastle and Bridgend, could deliver the “tailored and localised” approaches required to meet the very different challenges and opportunities faced by specific localities.

The report also says this local planning could enable the whole systems thinking required to connect the different elements of net-zero policy to each other, such as electric vehicles with the distribution network, at a grassroots level.

The commission also recommends the introduction of immediate steps to spur housing decarbonisation while the new deal is developed.

These are modernising energy performance certificates (EPCs), exploring the creation of a Green Homes Bond and a commitment by the government to retrofit all social homes by 2030.

The report describes EPCs as a “completely flawed” method of measuring building energy efficiency, which need to be replaced by solutions that more accurately measure the actual performance of a building, as opposed to its modelled performance.

And a competitive process for financing the retrofit of all council-owned homes by 2027 would stimulate the energy efficiency market and pave the way for the requirement that all homes meet the EPC C standard by 2035.

Decarbonisation is one of the key factors shaping the economy, which the report says the wider plan must address.

Sinead Lynch, chair of Shell UK and commission member, said: “Cost and disruption are the two biggest barriers to home retrofit, for example, but successive government schemes have added rather than eased the complexity.

“That is why we are proposing a new approach: a customer-led National Deal on Net Zero Homes – a negotiation between households, industry and government to set out the barriers to decarbonising homes; how industry can best overcome these; and a commitment from government to provide the policy and financial backing industry needs to invest.”