The failure to decarbonise our built environment could result in a 40% shortfall to our economy-wide decarbonisation targets by 2030, report finds.
The report, Financing energy efficient buildings — the path to retrofit at scale, published by the Coalition for the Energy Efficiency of Buildings (CEEB), as part of the Green Finance Institute (GFI), says there is an urgent need to increase the pace and scale of investment into the energy efficiency and resilience of UK residential buildings.
The report points out that meeting the UK-wide Energy Performance Certificate (EPC) target rating of ‘C’ by 2035, as part of the UK’s efforts to achieve net zero by 2050, will require a total investment in energy efficiency upgrades of up to £65 billion.
To deal with the current shortfall in investment, CEEB proposes setting up 21 “demonstrator” solutions, which it says will help overcome financial barriers that inhibit retrofitting projects and assess suitable policy levers to bolster the commerciality and scalability of these solutions.
Commenting on the report, Dr Rhian-Mari Thomas OBE, Chief Executive, Green Finance Institute and Chair, CEEB, said the report is in line with GRI’s aims for the financial sector “to profitably support the transition towards an environmentally sustainable economy.”
“The Coalition for the Energy Efficiency of Buildings is developing the market for financing net-zero and resilient homes through the co-design and launch of viable and impactful financial ‘demonstrators’ that provide the catalysts for further financial innovation and scale,” Thomas said.
The demonstrators fall into six groups.
Lending products — including Property Assessed Clean Energy (PACE) loans, equity release mortgages.
Savings and investment products — including community municipal bonds and ISAs.
Guarantee mechanisms — backed by the Government or by insurance companies.
Tenancy agreements — green leases.
Energy service products — enabling housebuilders to recoup investment.
Data and enabling frameworks — including building renovation passports and standardised energy saving methodologies.
Colin Fyfe, member of CEEB and Chair of Building Societies Association Green Finance Taskforce said: “As we think about the future of our society, finance and the economy, I see a real opportunity for change that could open up new jobs and provide longer-term economic stimulus as we reduce carbon emissions and heating bills.”
The GRI says it aims to progress the development of the demonstrator finance packages and facilitate cross-sector collaboration to support the Government’s commitment to move towards net-zero carbon, whilst growing its economy.
Last reviewed 20 May 2020