Social housing prefabricated retrofit and funding approach

Energiesprong is a whole house refurbishment or new build standard and funding approach for social housing providers. Developed and proven in the Netherlands, where thousands of homes are retrofitted each year, Energiesprong UK aims to scale this approach in the UK market. An Energiesprong retrofit uses money that would normally be spent on energy bills and maintenance to pay for the works, ensuring the cost of living does not increase. Installers must ensure the retrofit is net-zero energy over the year, with performance guaranteed in the long-term and verified by real life monitoring. Energiesprong can deliver a whole-house retrofits in just 10 days, providing minimal disruption to residents. The retrofits are guaranteed to be net zero energy, including real life monitoring, and targeted at social housing. Therefore, if scaled, this solution alone could significantly contribute to making UK housing net zero operational carbon by 2030.

When the market is at scale, Energiesprong retrofits produce a positive business case compared to business as usual, assessed over a 30 or 40-year period. The Innovation Partnership provides the structure for the market to scale and bring down the price needed to produce this positive business case. In the interim, grant is sought to make up the difference.

Maintenance and energy bill savings, backed by the Solution Provider’s long-term guarantees, provide income and savings to the social landlord which offsets the cost of financing the installation cost. Instead of tenants paying energy suppliers to continue to be cold, tenants pay a portion of their post-retrofit bill directly to the landlord in exchange for guaranteed comfort. The 30-year savings and income for a typical property add up to around £45-55k. The social landlord is expected to finance this amount towards the upfront cost, with grant making up the difference in the higher-cost early stage of the market. At scale, the amount to be financed will remain the same but grant will no longer be needed.

It should be noted that because the market is not yet at scale, Energiesprong retrofits on individual properties are not financially viable. The minimum project size at this stage of the market is 40-50 properties, and not all house types are suitable. When the market scales, they expect different financing options to be available and for private tenures to be possible.