Integrated approach to retrofit

• Retrofit delivery is often fragmented and disjointed, with limited integration across solution selection, project delivery, financing, insurance, and verification.
  • Stakeholders tend to engage at different stages of the retrofit lifecycle – often in isolation – creating misalignment between design intent delivery and performance.
  • Solutions, contracts and financing mechanisms are selected independently rather than as part of a unified strategy. 

• In social housing, often residents are not consulted, especially during the design phase. Residents have a diverse range of views and needs and needs change on a case-by-case basis. 
  • Resident requirements are often overlooked. 
  • Lived experience of residents is not considered during design phase, leading to dissatisfaction and potential performance not being realised. 
  • Residents can be reluctant to engage and cooperate in projects which they don’t feel a part of which creates inconvenience and barriers for on-site delivery. 
  • Consumer protection frameworks are underdeveloped, leading to concerns about quality and accountability. 
  • Retrofits are typically conducted on a measure-by-measure basis which increases disruption to residents from frequent access and information requests, increasing overall cost. 

• Design teams are likely only involved in the early stages of the projects, with limited visibility of how their specifications are implemented and perform. 
  • Lack of feedback loops on designs exacerbates issues surrounding perceived performance gap between theoretical vs actual product performance.  
  • Iterative product development with sufficient feedback from downstream stakeholders typically does not happen, increasing the risk of mistakes not being mitigated. 
  • No mechanism to validate or challenge design assumptions. 
  • Uncertainty in performance of products, whether due to manufacturers or installers. Risk of not achieving desired performance creates reluctance from investors. 
  • Verification and quality assurance are often treated as end-of-pipeline activities, rather than being embedded throughout the project lifecycle. 

• Limited vertical integration and pervasive subcontracting practices hinder unified quality governance, producing variability that challenges project reliability and client satisfaction. 
  • Contractors’ limited oversight on subcontractors further extends the risks of projects being delivered short of specifications. 
  • Fragmented communication between parties often occurs, intensifying the possibility of misunderstandings, errors, and delays.  
  • Many installers lack PAS 2035 familiarity. Few are trained in whole-house approaches. 
  • Local delivery capacity and capability varies significantly across regions. 
  • The supply chain ecosystem is underdeveloped, with limited capacity to deliver at scale. Companies operating in the space tend to be SMEs.  

• Stakeholder organisations are misaligned and short-term focused. There is a tendency to focus on immediate deliverables, rather than a shared vision of long-term outcomes. This contributes to siloes and doesn’t incentivise collaboration. 

• There is an absence of shared accountability between stakeholders for whole-house performance, following a retrofit project.
  • Lack of contractual clarity where contracts explicitly tie payment or liability to energy performance outcomes. 
  • Lack of clear roles and responsibilities during and after the retrofit project. 
  • Existence of a blame culture where various stakeholders assign culpability to each other. 

• Finance and funding mechanisms for retrofit are largely short-term cycles (SHDF, ECO4). Short-term cycles limit the ability of delivery bodies to plan and scale retrofit programmes long-term. 
  • Schemes operate on different cycles with varying eligibility criteria. 
  • Health improvements, carbon savings, and social value outcomes are rarely quantified in a consistent or credible manner. 
  • Private finance options are limited. There are few green mortgage products or performance-linked loans. 
  • Limited ability for housing providers to access health-integrated funding streams. 

• Data quality and availability on the UK housing stock is insufficient to support the detailed strategic planning of retrofit projects.  
  • ‘Identical dwelling archetypes’ have differences in the measures and parts required for a whole house retrofit. 
  • UK housing data infrastructure is underdeveloped. 
  • Housing data is limited and incomplete – there is no single source. 

• Whole house retrofits are expensive, in some instances costing upwards of £100,000, with long unattractive payback times for investors.
  • It is integral that inconsistencies across the industry regarding integration across contracts, financing, and insurance are corrected to increase accessibility to retrofit.  
  • No successful mass retrofit business models exists in the UK.  
  • Funders and landlords often have conflicting goals, especially around risk and returns. 
  • Fabric upgrades (e.g., insulation) are expensive, slow to pay back, and risky due to reliance on skilled labour.  

Integrated delivery model enables seamless coordination across design, installation, and verification.  

• Enable consistent outcomes, reduce delivery risk, and maximise efficiency across portfolios. 

• Reduction in fragmentation among stakeholders. 

• Multi-party agreements or contracts that align incentives by sharing risks and rewards among all parties. 

• Shared accountability across projects that contributes to more collaboration across the supply chain. 

• Facilitates standardised processes, aggregated procurement and economies of scale which reduces cost and speeds delivery. 

 Development of a resident engagement strategy. 

• Understanding how best to get residents on-board with retrofit projects by building trust and transparency. 

• Enhancement of resident satisfaction and comfort. 

• De-risks project as early and ongoing engagement helps identify and address concerns before they escalate. 

• Learning from experience of previous projects to avoid making the same mistakes. 

• Incorporate resident design choices where possible.  

Energy product monitoring becomes more accessible and valued in the sector. There is a greater adoption of monitoring technology in retrofit projects to validate EEM performance. 

• Builds trust and confidence with investors that solutions are functional. 

• Helps manufacturers iterate and improve their products. 

• Greater understanding of how specific products function on certain archetypes. 

• Helps identify installation mistakes or product degradation/ faults in advance. 

The standard retrofit approach becomes whole house on an archetype portfolio basis utilising a dwelling kit-of-parts.  

• Retrofits can be sold as a package, rather than as individual measures, which is more attractive for investors. 

• Thousands of homes delivered per project, ideally through social housing landlords. 

• Standard kit-of-parts can be developed for each archetype, enhancing repeatability and de-risking projects by using a validated approach. 

• Risks can be spread across a portfolio rather than on a per-property basis. 

• Lower cost per property as products can be scaled up as a demand is set. 

Insurance is used as a de-risking tool to increase accessibility to retrofit. It helps standardise retrofit projects, making them more palatable to investors. 

• Insurance policies are structured to guarantee performance. 

• If the retrofit fails to deliver the promised or agreed performance, insurers cover the financial shortfall. 

• Funders can treat retrofit like any other infrastructure investment, reducing complexity and increasing confidence in the product offering. 

• Reduces the due diligence burden on funders and accelerates deployment as insurance finance models can be repeated. 

• In the far future state, insurance is no longer required, as retrofit becomes a proven low risk industry  

Blended funding models are used to combine backing to help reduce perceived risk for investors. 

• Enables larger projects by pooling resources and aggregating them into investable portfolios. 

Overhaul of centralised SAP assessment database to support local authority’s planning, with detailed data, which will facilitate development of area-based retrofit strategies. 

• SAP modelling outputs are fully embedded within the PAS 2035 retrofit workflow, enabling dynamic data-driven design specification. 

• Each dwelling will have its own Digital Passport for general product and material data.  

Combine data streams from multiple sources to increase confidence level in EEM suggestions. 

• Use real-time energy consumption data alongside SAP assumptions to verify occupant behaviour and refine performance models. 

• Once a dwelling is classified, leverage monitoring and evaluation results from identical archetypes to forecast EEM performance and inform measure selection. 

Questions

• Who funds the upfront work required for an integrated retrofit? 

• How do we design retrofits for social housing which may have a high turnover of occupiers, with varying tendencies, that will significantly impact the effectiveness of retrofits and their energy efficiency measures?

Enablers

• Charter for social housing sets out the importance of listening to residents and providing opportunities to give feedback, ensuring resident satisfaction and the ability to deal with complaints promptly and fairly. 

• Funders price risk through interest rates and loan amounts. Using insurance can reduce perceived risk, enabling lower interest rates and higher lending volumes. Makes retrofit projects more financially viable for landlords. 

Key insights

• Don’t completely design to resident specifications as social housing occupiers change more frequently – new occupiers might have different needs. 

• Electrification measures offer many income streams for investors, including:
  • Energy bill savings. 
  • Export tariffs. 
  • EV charging.

Guidelines

• It is recommended that a stakeholder map and their interactions during the retrofit value chain are visually mapped. Tools such as RASIC and RACI are also recommended at project task level.