DATA COLLECTION MANAGEMENT


ADDRESSING FUEL POVERTY WITH DATA-DRIVEN RETROFITS


In a year when spiralling energy prices and soaring temperatures are seldom out of the news, it’s


impossible to underestimate the fuel poverty and climate change crises faced by the UK. For housing providers and energy consultants who are working tirelessly to achieve net zero, there is now the


added urgency of protecting vulnerable households from crippling energy costs. Stewart Little, CEO of IRT Surveys, explains how data-driven retrofits can help deliver these important targets


A


ccording to a recent and much-publicised report from consultancy firm BFY, energy bills


for the most vulnerable households are predicted to reach £500 a month in January 2023. This will put 40% of the UK population – approximately 12 million households – into fuel poverty, including most tenants of local authorities and housing associations. At the same time, the UK is experiencing unprecedented extremes in its climate, including heatwaves, storms and floods. While it is well understood that large-scale


retrofit projects can reduce emissions and energy costs by 60%, what energy consultants and housing providers lack clarity on is what effective retrofit strategies look like, their cost, and where the funding will come from. The answers to those questions can be found by adopting a data- driven, ecosystem approach where the different parties’ viewpoints are merged and where there is an alignment of retrofit plans, funding availability and assured outcomes.


A FIRM DATA FOUNDATION Establishing a clear retrofit pathway relies on having an in-depth knowledge of the current condition of the housing portfolio, something which cannot be determined by relying on historical EPCs and property condition surveys that are potentially out of date, inexact or duplicated across different homes. A more prudent and effective solution is to make use of today’s specialist AI applications that can eliminate gaps in the data and reveal inconsistencies. The insights discovered through this approach can then be merged with thermal imaging and archetypal building performance data, resulting in the highly accurate overview of the portfolio that the project requires. This accuracy is achieved because thermal


imaging delivers precise, unbiased energy loss measurements and archetypal building data provides typical energy consumption, based on comparable properties. With all this data joined up, energy consultants, local authorities and housing associations are given a clear view of building usage and energy consumption, helping them establish a firm foundation for planning their retrofit project. Thermal imaging is especially beneficial at


this stage in the process as it identifies energy efficiency weaknesses not discoverable through traditional surveys – such as half-filled or empty wall cavities, waterproofing and rendering issues, draughts and porous brickwork. Should these weaknesses remain undetected, any


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retrofit work carried out might not achieve the benefits intended, leaving occupants with energy-leaking homes and higher than necessary bills. The other advantage of thermal imaging is that it is non-invasive. For energy consultants and housing providers,


these energy insights provide considerable value, helping them identify viable decarbonisation routes, both in terms of which retrofit works to implement and in business viability. By deploying artificial intelligence, it is possible to analyse the gamut of different retrofit bundles to pinpoint the most suitable option for each portfolio, with graphic on-screen displays generated for previous, existing and future energy scenarios. These scenarios can be for specific properties or entire portfolios and can include forecasts of energy outcomes, costs and savings.


ENSURING CONFIDENCE IN RETROFIT PROJECTS While estimating outcomes like EPC uplift, energy bill savings and project pricing is vital during the planning of a retrofit scheme, it is important to remember that these may not be completely achieved at the end of the project. The potential difference between the two makes risk quantification an increasingly vital element of the process. To have confidence that anticipated outcomes will


happen, stakeholders need to understand not just the probability of underperformance, but also the potential scale of underperformance. This way, as risk is calculated on a sliding scale, it is possible to adjust retrofit measures in line with the appetite for risk. What’s more, when risk quantification is aligned with an insurer’s underwriting criteria, housing providers not only understand the project’s potential to succeed but can guarantee retrofit performance and financial outcomes. As a result, instead of being a latent liability, the project becomes a financial asset.


USING FUNDING EFFICIENTLY From a funding perspective, investors are better able to understand and back retrofit projects that become insurable ESG financial assets. This makes it easier for stakeholders to secure efficient, high loan-to-cost institutional funding, something which is vital if the social housing sector is to raise the £96 billion needed to decarbonise its 4.4 million homes by 2050. With private funding combined with public funding, local authorities and


housing associations are in a position to extend their existing budgets and conduct deeper retrofits. Furthermore, by adopting a pay-as-you-save


model, housing providers can pay back third- party loans using a proportion of realised energy bill savings. The remainder of these savings, meanwhile, can be divided between more retrofit measures and helping residents save money on their energy bills. As a result, residents will have more energy-efficient homes and lower bills, funding can be paid back efficiently, and future retrofits can be partially funded from ongoing savings.


A SUSTAINABLE PATHWAY By adopting this ecosystem approach, housing providers, energy consultants and other stakeholders can access the impartial, data- driven insights that are necessary to achieve the right balance between decarbonisation, funding availability and resident experience. This ensures residents can live in better homes while being insulated against rising energy costs and the consequences of fuel poverty. When it comes to tackling climate change, clearly


planned, data-driven retrofits offer the most sustainable pathway to prevent energy wastage


and reduce CO2 emissions across portfolios. Not only does this help councils and housing associations meet regulatory targets, but it does so via off balance sheet treatment, minimising the impact on existing financial constraints.


IRT Surveys www.irtsurveys.co.uk


ENERGY MANAGEMENT - Autumn 2022 29 Stewart Little


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