Tony Cahill, executive director, property for Livv Housing Group, explains why Net Zero should be welcomed as a huge opportunity for the social housing sector.
The UK’s objective to meet the net zero target by 2050 is an ambitious one, and one that will involve change in many areas of society and infrastructure, as well as a need to significantly reduce our consumption of energy.
Although the country is leading the way globally in many areas, the UK is only at the start of its journey to achieve net zero carbon and there is much to do, from introducing further legislation to making large scale change to energy infrastructure and supporting the development of new technologies. Social housing providers are therefore tasked with setting net zero strategies which not only lay down the foundations for meeting our known obligations but also remain agile and flexible so that they can reflect a changing landscape of current and future government policy, while also accounting for the evolution of technology which will complement achieving our objectives.
Managing such a careful balancing act may seem like a huge undertaking but net zero should be embraced as an opportunity for the social housing sector to set standards, lead the way in changing attitudes and cultural behaviours and help reduce the impact on the environment, as well as delivering benefits to customers and making a significant contribution to the eradication of fuel poverty.
Understandably, the main issue for social housing providers is the cost of implementing net zero strategies, with much talk abound of the average spend to make each property net zero equating to between £20,000 and £25,000 each. At Livv, we look at things a little differently and estimate that the impact on our business plan will be half of the half of that cost estimate. We talk of our plans here not from a self-focussed perspective, but with the aim of sharing our methods for the benefit of others and explaining how our concepts work in practice.
As will be the case with all social housing providers, we already have pre-existing budgets for maintaining our existing properties including for example, replacing boilers every 15 years or windows every 30 years. Therefore, if we align the replacement of assets at the end of their planned life cycle for those that meet our net zero objectives, we can offset the planned expenditure against the improvements we need to make.
It goes without saying that we have to take a ‘fabric first’ approach. We cannot introduce different heating technologies into homes such as air source heat pumps, if the thermal efficiency of the home isn’t good enough for the heating system to operate effectively. But we won’t be implementing a single step approach to achieving net zero in our homes, we will set a programme that phases improvements based on fabric first but aligning the replacement of assets to the end of their planned lifecycles. For example, we will replace windows and doors at the end of their life cycle but will look to maximise the thermal efficiency of the new product to contribute towards achieving net zero, but with only a marginal increase in current business plan costs. Gas boilers will only be replaced with an alternative at the end of their life cycle and our current Gas boiler installation programme will continue until 2025.
Our existing asset strategy features many objectives which already take us on the road to net zero. This is by design and not accident. We are also taking a different approach in relation to legislation which states that any rental property should have an EPC (Energy Performance Certificate) rating of no lower than D by 2025, and by 2030, a rating no lower than C.
Our existing asset strategy – which is separate from the net zero strategy - states that we will reach an EPC rating of D on all homes by 2023 and an EPC of C by 2025. We are already on target to achieve that so, when we begin our net zero roll out programme in 2026, our starting point will be much more effective – we will be starting at a C to get to an A+.
The second major step we are taking is in gathering the intelligence we need to develop our delivery plan. We are currently updating our EPC’s on every single home, and we will have completed this by March next year. Over the next three years we will also gather additional stock condition data to put a programme together that maximises value for money by maximising the life cycle of assets whilst also gathering greater intelligence on our customers - such as those facing fuel poverty.
As we shape our delivery plan for net zero, we will prioritise those homes which are poorest and move those homes to net zero first so we will have the greatest impact, soonest.
I’m a passionate environmentalist and I’d love to be able to say ‘let’s do it ASAP and start fitting air source heat pumps now’ but that is not the logical or best value for money option. Over the next seven years the price of air source heat pumps is predicted to reduce significantly , because the volume of orders will increase dramatically, which will drive down the cost, so timing our introduction is key.
Some people will ask why I am so keen to disclose our strategy, but I firmly believe that if you share information, and someone takes even one part of it and it improves their organisation or has a positive effect on their customers, then that’s a good result. We too want to continue to learn from what others are doing, this isn’t a short-term plan, it’s a long-term strategy and we need to evolve our delivery based on new solutions, new ideas and best practice that forms over time.
With net zero – and I hark back to me being a passionate environmentalist here – the impact of sharing expertise reaches even further than that. The potential benefit from sharing our knowledge and practice is a cleaner, greener, healthier planet which many future generations can enjoy. I cannot think of a better or more effectual way of us achieving a positive social impact – our raison d’être at Livv.