What is Systems Thinking?
Systems Thinking (ST) is a holistic approach to analysis that prioritises understanding how the various constituent parts of a system interact with one another.
Rather than examining individual components in isolation, ST considers the relationships and interdependencies between these parts. This approach also explores how systems evolve and behave over time, and how they function within the context of broader, more complex systems.
A central aspect of Systems Thinking is the identification of feedback loops, which are cycles of cause and effect that can reinforce or balance behaviours within the system.
By focusing on these interconnections and the dynamic nature of systems, ST encourages a comprehensive understanding of the whole system, enabling more informed decision-making and problem-solving.
What is Systems Engineering?
Systems Engineering (SE) is defined as a methodical, multi-disciplinary approach for the design, realisation, technical management, operations, and retirement of a system. A “system” is the combination of elements that function together to produce the capability required to meet a need.
The relationship between Systems Thinking and Systems Engineering
Systems Thinking forms the bedrock of Systems Engineering, providing the essential mindset and context for addressing complex problems. By adopting a holistic perspective, Systems Thinking establishes a comprehensive understanding of the problem environment and encourages early conceptualisation of the system as a whole. This approach ensures that all relevant factors and interconnections are considered before any technical work begins.
Building on this foundation, Systems Engineering introduces the methodological framework required to tackle system-level challenges. It supplies the technical definitions, structured processes, and disciplined approach necessary to move from problem framing to solution delivery.
In essence, Systems Thinking ensures that the right problem is identified and thoroughly understood, while Systems Engineering leverages this understanding to design, develop, and implement the most appropriate solution.
Together, these two disciplines enable a seamless transition from recognising and defining complex issues to systematically resolving them through well-engineered systems.
Why is this relevant to retrofit?
According to The Systems Thinker, problems that are ideal for ST have the following characteristics:
- The issue is important.
- The problem is chronic, not a one-time event.
- The problem is familiar and has a known history.
We can map these criteria to the problems faced within the retrofit market:
The issue is important because the UK’s housing stock is in a critical state, characterised by poor energy efficiency and unacceptable living conditions. To achieve a notional benchmark of EPC C rating in all homes by 2035, national retrofitting rates must increase sixteen-fold, as detailed in the Transform-ER Define the Need report.
The problem is chronic because the UK has one of the oldest dwelling stocks in Europe. Old buildings often rely on inefficient heating systems and are either poorly insulated or not insulated at all. This leads to high energy consumption, high carbon emissions, health issues for occupants due to exposure to extreme temperatures (hot and cold), and excess moisture which can lead to mould.
The problem is familiar and has a known history; the UK government identified the need to retrofit the existing housing stock in 2013 with the introduction of the ECO (Energy Company Obligation) programme.
People have unsuccessfully tried to solve the problem before, the ECO programme was initiated in 2013 by the UK government as a means to reduce the heating demand on homes. However, ECO 4 is estimated to have only upgraded 450,000 homes by April 2026.
Waves 1, 2.1 and 2.2 of the Social Housing Decarbonisation Fund (SHDF) has upgraded 49,500 homes (up to September 2025).
V-Model for retrofit
The V-Model is a framework used within Systems Engineering that illustrates the development process of a system in a structured and sequential way.
The model emphasises the relationship between each phase of development and its relevant verification or validation step. In simple terms, validation may be expressed as ‘Are you building the right thing?’, while verification can be expressed as ‘Are you building it right?’.
Traditional retrofit strategies address 7 of the 8 stages in isolation, with limited knowledge transfer between each stage. There is a clear gap in capability regarding Functional Integration Testing, which must be addressed to ensure the retrofit problem can be resolved using SE principles (This is discussed further in the Product Testing and Certification chapter).
RISE provide more information on this topic, specifically highlighting the need to monitor whole lifecycle performance, and to use that data to evaluate against desired outcomes to benefit future projects.
Aligning retrofit against the Systems Engineering V-Model
Requirements gathering
Generalised requirements can be found in Hypothesis Specification, however, as it stands there is no universally adopted set of retrofit requirements to deploy at scale. One development that could address this in future is the UK Net Zero Carbon Buildings Standard.
System analysis
System analysis is currently limited to single property or small project (of similar buildings) levels; this makes scaling up delivery of these projects difficult as the resource required scales linearly with the size of the project. Given the established skills and labour shortages identified in the Skills and labour chapter, we must find ways to compound effort for larger projects.
Retrofit design
Retrofit system design is currently a laborious task with each building designed in an individual and bespoke manner. System level thinking is present on a single property basis, in that individual measures are usually designed to complement each other, e.g. sizing a heat pump to the expected heat loss of the building after insulation.
However, when scaled up to a portfolio level, systems thinking requires further work and development. Currently, little is shared in terms of lessons learned or application of continuous improvement.
Retrofit coordination
PAS 2035 provides guidance for a whole house approach to retrofit coordination; however, it only touches on the complexities of retrofit at scale briefly.
Component level validation
Verification of individual components takes place through testing and certification services provided by organisations such as BRE and BBA; however, in terms of interoperability, this does not provide detailed information or considerations for installation.
EEM installation
The Competent Person Schemes (full list found here) allow installers to self-certify against building regulations, and provide legally recognised certificates for property sale, insurance, and compliance purposes.
These cover individual works, rather than whole-house retrofit, which could involve multiple organisations, depending on the organisation with which the installers are registered.
TrustMark is a UK government-endorsed quality scheme designed to provide both consumer protection and quality assurance within the retrofit and construction sectors. The scheme acts as a benchmark of reliability, ensuring that consumers engaging with home improvement or retrofit works have access to reputable tradespeople and organisations who meet robust standards.
By endorsing quality and offering a recognised mark of trust, TrustMark helps to safeguard homeowners during the retrofit process and contributes to raising standards across the industry.
There is a general lack of cohesion between bodies, which will pose a barrier to the mass adoption of whole home retrofit methodologies.
Functional integration testing
Currently, there are no facilities to verify whether retrofit measures function cohesively at a system level, testing is limited to individual components. Achieving system-level integration verification is challenging due to several factors:
- Complex interactions: retrofit elements often influence each other’s performance, making it difficult to assess integration compared to isolated component testing.
- No standard protocols: the lack of industry standards for system-level testing results in inconsistent methods and unclear success criteria.
- Property variability: differences in building age, design, and use complicate the development of universal verification methods.
- Data fragmentation: most performance data remains at the individual dwelling level and is not shared in a central database, limiting broader insights.
- Stakeholder fragmentation: multiple organisations and certification bodies are involved, leading to coordination challenges and inconsistent standards.
- Resource demands: system-level testing requires more extensive monitoring and expertise, increasing costs and complexity.
Overall, shifting from component to system-level verification demands overcoming significant technical and organisational barriers, but it is essential for reliable, large-scale whole house retrofit.
System performance testing
There are system performance tests available on an individual dwelling level. For example, monitoring of fuel consumption, indoor temperatures, and air quality for quantitative data; as well as occupier surveys to obtain qualitative data.
From a systems perspective, this data often stays on an individual property level, rather than building a functional portfolio level database of evaluated retrofit outcomes and performance.