Warm Homes Fund to Go All-in on Solar

 Announcement in January Expected to Include Grants for Solar PV

Zero Bills Homes by Keepmoat and Platform Housing Group (C) Viridian Solar

It is widely expected that a £13bn 'Warm Homes Fund' to be announced by Ed Miliband in January will include grants for the installation of solar PV and batteries.  If so, this will represent a big departure from previous policy in this area which have almost exclusively emphasised retrofit insulation measures.

Until recently the accepted wisdom has been coined 'fabric first’.  This catchy phrase summarised a prevailing energy-efficiency orthodoxy which held that until you fix the insulation and airtightness of a building (its fabric) there is no point using ‘expensive bolt-ons’ like solar.  

Fabric first became sacrosanct for some in the energy efficiency industry (and not only those who manufacture insulation), with every consultation on building regulations met with howls of criticism from some quarters for not going far enough on required insulation levels and any inclusion of solar or other technology criticised as 'green bling'.  

Numerous government policies have been influenced by fabric first thought – with ECO, Low Carbon Buildings Programme, and most recently the ‘Scottish Passivhaus’ rabbit hole that building regulations north of the border appear to be about to disappear down all prioritising insulation over renewable energy.

This dismissal of solar bling as unserious and insulation as the only ideologically pure approach to decarbonisation misses three important points: 

First, that thermal efficiency is a game of diminishing returns.  

Second, (and linked to the previous point), having run out of easy targets such as loft and cavity wall insulation, more ambitious retrofit approaches aiming for big improvements in thermal efficiency can be highly invasive, complex and risk unwanted side effects like damp and mould.

Third, that the orthodoxy arose at a time when our energy system was dominated by fossil fuel and renewable energy was expensive.  This is now out of date.  What matters more today and in future is when you use energy not how much you use.

Diminishing Returns

It's physics.  The more you insulate a building the more difficult becomes the next improvement in performance, until you are adding large amounts of insulation for only marginal gains.  Building regulations for new homes appear to have now reached this point since the Future Homes Standard consultation proposes no change to the fabric performance of new homes over those of current (2021) regulations.

In retrofit scenarios, the payback for simple low cost measures like loft insulation chimney balloons, lagging hot water tanks and pipes and draft excluders is measured in months while more expensive improvements like external wall insulation for solid walls can take many years to pay back their costs.

Unwanted Side Effects

Once you've lagged every hot water cylinder, topped up loft insulation where you can and blown insulation into walls with cavities, you're left with a large number of hard-to-treat properties with solid brick or block walls.  These require a layer of insulation to be fixed to the external walls either on the inside face which makes the rooms smaller or on the outside face which needs to be carefully protected against the weather. 

The challenges with solid wall insulation really became apparent once we moved from theory and pilot studies to pushing into volume in the real world.  The work is complex, expensive and intrusive and has sadly proven to be easy to get badly wrong at scale, with unwanted side effects such as damp and mould widely reported. 

A National Audit Office review of works done under the ECO4 and the Great British Insulation Scheme found that an amazing 98% of homes fitted with external wall insulation and 29% of those with internal wall insulation had major issues that need fixing.

The Economics Has Shifted

Fabric first approaches to energy conservation in buildings emerged at a time when renewable energy was ruinously expensive and the energy supply system was dominated by coal, oil and gas.  At this time, the careful conservation of energy was the only logical way to reduce emissions and lower energy bills.

Renewable energy is now the cheapest form of energy.  It getting more and more plentiful as investments in new solar and wind capacity expands.  The nature of renewables is that the timing of generation cannot be controlled in the same way as it can for fossil fuel based energy, but the falling cost of battery energy storage and advent of smart controls that react to time-of-use pricing signals are combining to overcome the weakness of intermittency in renewable generation.

Those who can adjust their energy demand to use power when energy is in over-supply can now take advantage of these tariffs to pay very low (sometimes zero, sometimes negative) prices for their power.  Space heating, domestic hot water and electric vehicle charging are all amenable to time-shifting or rate shifting.

New housing developments such as Hollymead Square in Essex and Beeston Canalside in Nottingham offer so-called Zero Bills Homes where the combination of solar PV, battery energy storage and electric heating with time of use tariffs and smart energy controls allow the energy supplier, Octopus Energy, to guarantee that the householders will pay nothing for energy for ten years after moving in. 

In this approach to low-carbon living it's not how much energy you use, its when you use it and how you combine that with maximising the use of low cost renewable energy you generate for yourself.

Learn to Love the Bling 

The case for using energy sparingly has not gone away, and simple, low-cost insulation improvements will always be high up the to-do list.  

However renewable energy is combining with smart energy management, electrification of transport and heating and battery energy storage to offer an alternative vision in which the when of your energy use is as important as the how much.  If the Warm Homes Fund recognises this fundamental shift, then that is to be welcomed.