The UK faces a retrofit challenge of unprecedented scale. With half of all homes below EPC D and millions struggling with fuel poverty, we need to ramp up retrofit efforts 16-fold to meet net-zero targets.
But the current system isn’t fit for purpose. Fragmented supply chains, inefficient delivery models, and financing barriers are slowing progress - while the potential market for retrofit could reach £60bn per year according to project partner and report author, the Manufacturing Technology Centre.
So, how do we fix this? The Innovate UK funded Transform-ER project is pioneering a radically new approach - one that is financeable, scalable, manufacturing-led and resident-focused.
Here are five key insights from our new Define the Need report which explores why we need to transform the retrofit market, and what this could look like:
This is not news - the UK’s housing stock is in crisis. Retrofitting rates sit at 6% of what is needed to achieve Government targets (according to ECO4 data). Many households are trapped in fuel poverty, struggling with high energy bills and poor living conditions. Without urgent intervention, millions of people will continue living in cold, inefficient homes, and the UK will miss its net-zero commitments.
Retrofitting rates sit at 6% of what is needed to achieve Government targets
The retrofit market is currently valued at £1bn per year. But with roughly 50% of homes still rated at Band D or lower, it has the potential to grow to £20-60bn annually estimates the Manufacturing Technology Centre. The demand – and need - is there, but the industry must scale to meet it.
The retrofit sector has the potential to grow to £20 - 60bn annually
Multiple, intertwined market challenges are crippling the sector, including high costs and funding gaps, an underdeveloped supply chain, workforce and skills shortages, lack of industry standardisation and absence of proven delivery models including financing. This means rethinking and disrupting the status quo.
The retrofit sector's systemic barriers mean rethinking and disrupting the status quo
The project consortium has identified a ‘Manufacturing-Led’ approach to industrialise the retrofit sector and facilitate large-scale implementation through increased productivity and efficiency. This includes aggregating demand and applying technology to develop standardised kits-of-parts to enable common solutions to be applied to different archetypes.
Manufacturing-Led retrofit can industrialise the sector and facilitate large-scale implementation
Taking this ‘Manufacturing-Led’ approach, Transform-ER is developing a new retrofit delivery model for financeable, high-quality and cost-effective solutions and a radically new resident engagement programme:
The industry can benefit from a standardised end-to-end process... residents benefit from guaranteed performance - mitigating risks of damp, mould and overheating
As we continue our work on Transform-ER, we have a few calls to action for key stakeholders!
As we move beyond the R&D phase, we need an owner of the Retrofit Rulebook to update the guidance as the Transform-ER delivery model ramps up delivery of retrofit at scale.
This rulebook will set out clear guidance for industry organisations wishing to adopt the Transform-ER approach and deliver high-performance, cost-effective home energy upgrades at scale.
This will likely be, at least in part, managed by the new retrofit delivery vehicle but support from other industry bodies would be beneficial. Get in touch if you are interested in supporting this work.
Define the Need helps clarify what a manufacturing / platform approach is for achieving retrofit at scale, and the benefits of this in working with a new delivery model such as Transform-ER. Transform-ER's retrofit delivery vehicle will be launched in 2025 - sign up for updates.
From manufacturers and installers to retrofit assessors and architects, we need new organisations to join the retrofit revolution.
Define the Need illustrates the size of the retrofit challenge, why transformation is required, how transformation can be achieved through a Manufacturing-Led approach and delivery model designed for scale, and insights into some of the market potential.
Our work on streamlining accreditation and certification pathways is designed to support you in this journey - sign up for updates.
Define the Need demonstrates how retrofit at scale can be delivered by new delivery models such as Transform-ER as part of a procurement framework, and why this is so essential to the health and environmental wellbeing of the country.
Read the Define the need summary report or full report, including 5 key points for policymakers.
Check out our blog with Steve Nesbitt, Sector Director – Built Environment at the MTC.
