The route to decarbonising social housing is finally becoming clearer

Will Jeffwitz, 02 November 2021

You wait months, even years, for a strategy on the climate crisis and then – like electric buses – several arrive at once.  
 
Tuesday 19 October saw the launch of our guide to decarbonising housing association homes, and our research with Savills on the costs of decarbonisation for our sector. Together, they set out the trajectory to net zero for our sector and the opportunity we have to improve quality, comfort and affordability for residents. But they also show the scale of the challenge ahead and the challenges we will need to overcome – alongside residents, the government and industry – to decarbonise our homes.  
 
Coincidentally the government chose the same day ahead of COP26 to launch their long-awaited Heat and buildings strategy, alongside the economy-wide Net Zero Strategy. Running to over 200 pages, the Heat and buildings strategy is considerably longer than our modest 30-page guide, but reassuringly, they cover much of the same ground:

  • To decarbonise our homes by 2050 we need to replace every fossil fuel heating system with a form of ‘clean heat’ – appliances powered by net zero energy sources.  
  • Heat pumps powered by a decarbonised electricity grid are likely to heat the majority of our homes, with a smaller role for heat networks and possibly hydrogen. 
  • It’s too early to tell exactly which technologies will work out best and we need heat pump technology to improve and prices to fall before we can expect to see widespread adoption. The government identified 2026 as the year when this big decision about the future mix of technologies will be made.
  • But in the mean time we should invest immediately in ‘no or low regrets activity’ – primarily improving the energy efficiency of as many leaky homes as possible to bring down bills and emissions and improve comfort for residents 

The Heat and buildings strategy also touched on many of the same barriers as our guide – and reassuringly, it set out plans to address many of them. These included:  

  • The need for funding – with £800m confirmed for Wave 2 of the Social Housing Decarbonisation Fund, which will run for three years from 2022.  
  • The importance of public engagement and support for decarbonisation. 
  • The need for clarity about the standards and regulatory environment for social housing – with a consultation due in the next few months. 
  • The need to bring down the cost of electricity – with a consultation promised for next year. 
  • The need to build the skills and supply chains to unlock delivery – with a further net zero skills strategy promised in 2022. 

While it marks a big step forward, there’s still more we need to see from the government, not least on funding. For our sector, £800m over three years is a great start but the big spending comes further down the line and Savills estimates there’s a £36bn gap to make up between now and 2050. The government are betting on falling prices and improving technology to bridge much of this but even then there will be a significant shortfall.  
 
Meanwhile there are several references to ‘hard to decarbonise’ homes but no real strategy for addressing them. We agree with the government that it’s probably too early to make irreversible decisions given the uncertainties ahead, but we do think a clearer strategy is necessary, and we are planning work on this over the next few months.  
 
More broadly, the Net Zero Strategy makes clear the government’s headline approach to net zero, which is also reflected in the Heat and buildings strategy – a reliance on market mechanisms and technological innovation to bring down costs, long term regulatory standards to drive private sector behavior, and public sector investment to stimulate markets and support people on the lowest incomes. As the independent Climate Change Committee said in their positive response to the strategy, 'The success of this transition will depend on the government’s ability to implement and sustain the market-based approach they have opted for – and manage any associated risks. This includes being prepared to step in with alternative approaches should the market under-deliver.' 
 
The NHF and our members will work closely with the government to deliver, track progress and propose alternative approaches where needed. The journey to 2050 will be a long one, but last month the route to getting there became much clearer. Hopefully, these examples of best practice will help members to see what this journey looks like in practice. 

What does COP26 mean for housing associations?

Find out in our briefing.

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