What is retrofit and how can it be used for decarbonisation?

What is retrofit?

Retrofit refers to making improvements on an existing building to increase energy efficiency. This can be through making it easier to retain and remain heated, and replacing fossil fuels with alternative renewable energy sources. The types of projects involved in retrofit can range from small scale improvements such as fitting energy-efficient LED lighting, to larger scale projects including the upgrade of HVAC heating systems.

Why is retrofitting key for decarbonisation?

Government data suggests that 80% of buildings which will be in use in 2050 already exist. Whilst construction of new buildings can be carbon intensive, retrofitting existing buildings provides “the greatest scope for decarbonising the UK building stock”. RICS states there is “a significant opportunity” for retrofitting commercial buildings to reach current energy standards.

According to data from RICS, 39% of non-residential buildings were built pre-1970, when thermal regulations were introduced for properties. 19% of the UK’s carbon footprint is a result of emissions from the energy used to heat, cool, and power buildings.

The built environment is directly responsible for 25% of UK emissions. In order to reach built environment targets to reduce emissions by 78% by 2035 and achieve net zero by 2050 as established in the Paris Agreement, commercial retrofit may be an essential driver of UK decarbonisation initiatives.  

In response to party manifestos, the UK Green Building Council (UKGBC) urged the new government to invest in a £64bn retrofit programme over the next decade. The UKGBC produced a manifesto seeking national investment into British offices, public spaces, and houses through the installation of heat humps, solar panels, and improved insulation.

In their recommendations, the UKGBC addressed the challenges faced by vacant high street units and businesses, stating that “the opportunity to fix this through retrofit and energy efficiency improvements of commercial and public buildings” has been “largely overlooked” by parties.

Louise Hutchins, the head of policy at the UKGBC stated that whilst the built environment industry “stands ready to help as an active partner”, the government must “put their shoulder behind a much bolder approach than we’ve seen up to now” in order to show tangible improvements for Net Zero. 

What are the changes to EPC standards?

As of 1 April, all tenanted commercial properties in the UK, including warehouses, offices, and retail must have an EPC rating of E according to Minimum Energy Efficiency Standards (MEES). An estimate of 5% of commercial property currently fails to meet EPC requirements, presenting a growing challenge for landlords in the commercial property industry.

On 18 July, the Secretary of State for Energy Security and Net Zero, Ed Miliband, declared in parliament that landlords must reach an energy performance certificate (EPC) of standard C by 2030 for properties in the private rented sector. There has been rising concern expressed by landlords that they may require further assistance or time to meet these deadlines established.

Growing appetite for green-rated property 

Non-domestic properties with an EPC rating below E can no longer be leased according to these changes. However, whilst increasing pressure on landlords, this may present an opportunity for commercial property investors and developers to improve the sustainability of their leased buildings. There has been increasing occupier interest in green-rated properties, especially across the central London office market as ESG has become a higher priority. 

What are the benefits of retrofitting?

In order to meet MEES standards, adopting retrofit-first projects can be used to achieve desired EPC ratings. Considerable advantages of updating existing structures include cost reductions, reduced carbon footprint, and increased market value and rental returns for commercial property landlords. By adopting a ‘fabric-first’ approach, landlords can take active steps to integrate sustainability with the building’s energy performance and efficiency. 

If you would like to receive more information on how to approach improving your properties’ energy efficiency in order to reach Net Zero goals, contact our building consultancy team to receive specialist advice for your sector, whether in corporate offices, industrial warehouses, or retail property.