MARKET STUDY OF THE ENERGY EFFICIENCY

MARKET IN GREAT BRITAIN

Client brief
Market study of the energy efficiency market in Great Britain. The mission consists in
carrying out a synthetic study of the energy efficiency and renewable energy market in UK in
residential housing.

- Description of residential housing (flats, condominiums, single-family houses, social

housing) number / % owner, main / secondary housing average value in 10 major cities /
average surface area /

- Housing credit in UK (amount of outstanding credits, major banks, average credit, LTV,
refinancing, supervisory bodies)

- Energy situation of dwellings (number of energy diagnoses, breakdown of housing stock by

energy label)

- Reporting obligation / energy audit of housing (what are the obligations - Renovation work
carried out by dwellings (insulation, heating, solar water heaters, heat pumps, ventilation, air
conditioning, etc.) Annual renovation turnover by item, profile and number of work
companies, Aid and subsidies for renovation (% covered, name of organisations in charge,
facilitators) Objectives for 2030

- Solar energy (resale or self-consumption) solar market, number of installations, target to

2030

- Electric cars, number of electric cars sold, number of terminals installed in the residential
sector, target to 2030 For solar and charging stations Turnover of the sector, profile and
number of installers, Aid and subsidies (% covered, name of organisations in charge,
providers

Make a summary of the country's "zero carbon" roadmap to 2030 and 2050, mentioning the
names of the organisations involved Indicate the commitment and the "NEtzero" obligations
of the 40 largest companies in the country
 1. Description of residential housing (flats, condominiums, single-family houses, social
housing) number / % owner, main / secondary housing average value in 10 major
cities / average surface area/
2. Renovation work carried out by dwellings (insulation, heating, solar water heaters,
heat pumps, ventilation, air conditioning, etc.) Annual renovation turnover by item,
profile and number of work companies, Aid and subsidies for renovation (% covered,
name of organisations in charge, facilitators) Objectives for 2030
3. Housing credit/loans (amount of outstanding credits, major banks, average credit,
LTV, refinancing, supervisory bodies)
4. Reporting obligation / energy audit of housing (what are the obligations
5. Solar energy (resale or self-consumption) solar market, number of installations, target
to 2030
6. Electric cars, number of electric cars sold, number of terminals installed in the
residential sector, target to 2030
7. For solar and charging stations: Turnover of the sector, profile and number of
installers, Aid and subsidies (% covered, name of organisations in charge, providers
8. Make a summary of the country's "zero carbon" roadmap to 2030 and 2050,
mentioning the names of the organisations involved
9. Indicate the commitment and the "NEtzero" obligations of the 40 largest companies in
the country
10. And For the summary of the country's "zero carbon" roadmap to 2030 and 2050,
mentioning the names of the organisations involved and the commitment and the
"NEtzero" obligations of the 40 largest companies in the country we will see after

RESIDENTIAL HOUSING MARKET

Overview
1. Description of residential housing (flats, condominiums, single-family houses, social
housing) number / % owner, main / secondary housing average value in 10 major
cities / average surface area/
Major cities Housing type Ownershi Number Main housing Average
Flats Condominiums Social housing Single family Semi- p (%) of second average value surface
(Commonhold) % Number housing (Detached) detached homes (£)1 area (sq.ft)
London 3,871,069 12 24.02 981,938 720,199 2,070,572 62 49,980 516,285 7053
Manchester 13,900 1 27.72 1,133,193 711,563 1,913,692 12.3 6,013 211,773 861
Birmingham 50,685 - 25.74 1,052,251 39,521 798,214 41 5,562 209,245 558
Leeds 87,7104 - 3.4 140,754 40,170 110,370 30.6 958 216,280 810
Liverpool 66,988 - 27.31 1,116,433 62,241 981,654 51 32,041 171,221 860
Leicester 41,354 - 22.29 911,215 13,937 857,632 43 56,211 210,890 847
Southampton 51,112 - 22.19 907,127 28,056 689,100 53.3 25,010 222,134 699
Newcastle 19,002 - 29.53 1,207,186 89,625 645,122 36 31,586 178,220 861
Sheffield 34,999 - 25.41 1,038,760 133,358 409,654 67.5 11,025 194,325 849
Nottingham 60,823 - 29.16 1,192,060 74,635 854,098 39 8,521 175,905 871

There number of households by tenure type in England in 2020 was 24,658,000. Tenure types are;
 Owner occupied – 15,739,000
 Rented privately or with a job or business – 4,799,000
 Rented from Housing Associations – 2,505,000
 Rented from Local authorities – 1,583,000
 Other Public sector dwellings – 32,000
Total; 24,658,000
But Social housing = (Rented from Housing Associations + Rented from Local authorities)
1
https://www.statista.com/statistics/1006395/average-house-price-in-the-uk-by-city/
2
https://www.leaseholdknowledge.com/the-15-commonholds/
3
https://www.housebeautiful.com/uk/lifestyle/property/a35405209/average-house-price-england-square-foot-yes-homebuyers/
4
https://observatory.leeds.gov.uk/housing/#/view-report/198f8d62d0ea4d989ebcf6911cf73fd5/___iaFirstFeature
 = (2,505,000 + 1,583,000)
Total social housing in England = 4,088,000
Therefore, number of social housing properties is a percentage of the total social housing of England i.e. a percentage of 4,088,000.
Renovation works
2. Renovation work carried out by dwellings (insulation, heating, solar water heaters,
heat pumps, ventilation, air conditioning, etc.)
 Annual renovation turnover by item,
 profile and number of work companies,
 Aid and subsidies for renovation (% covered, name of organisations in charge,
facilitators)
 Objectives for 2030

 Renovation was the second most activity partaken by UK homeowners for the
period 2019-2021 after decoration/ furnishing according to the 2021 Houzz &
Home UK report.5
 The average annual spend on renovation for the years 2018, 2019 and 2020 was
£18,000, £11,000 and £15,000 respectively.
 The major source of funds for home renovations by 85% of home owners on their
primary homes was cash or savings.

Top renovation funding sources

85%

80%
60%
40% 14% 12% 9%
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Renovation funding sources

 The most frequently done renovations done by UK homeowners for the year 2020

pertaining to home system upgrades were heating, plumbing and electrical.

Major home system upgrades of 2020

5
https://www.houzz.co.uk/magazine/2021-uk-houzz-and-home-renovation-trends-study-stsetivw-
vs~154085393
 Home system upgrades Frequency Average number of upgrades
2018 2019 2020
Heating 37% 2.94 2.77 2.73
Plumbing 34%
Electrical 32%

Characteristics of homes renovated in 2020

 The largest percentage of homes renovated were built between the years
preceding 1901 (23%) followed by those built between the 1961 and 1980
(17%).

Year built
2001-2010 5%

1981-2000 13%

1961-1980 17%

1941-1960 9%

1921-1940 15%

1901-1920 13%

<1901 23%

0% 5% 10% 15% 20% 25%

Year built

• The most commonly renovated house type of 2020 was the detached house

accounting for 45% of house renovations and the semi-detached house with 28%.

• 44% of the homes renovated were reported by their owners to have a value of

£500,000 or more making it the largest category of houses renovated in 2020.

 Home Type Owner reported home value
25%
9%
18%
44%
45%

28% 31%
Detached house Semi-detached house £500,000 or more £300,000 - £49,000
Terraced house Other Under £300,000

Objectives for 2030

 In 2019 the UK became the first major economy to pass laws to reduce its greenhouse
gas emissions to net zero by 2050.
 In April 2021, an ambitious target was enshrined to reduce emissions by 78% by 2035
on 1990 levels into UK law.
 Decarbonising energy used in buildings for a Green Industrial Revolution, to “build
back better and build back greener”.
 This means improving buildings’ fabric efficiency, changing the way buildings are
heated and cooled and improving the performance of energy-related systems
 Provide grants and funds are not only vital for
 Meeting the Net Zero target, but also represent a key part of our strategy for tackling
fuel poverty.
 Vision for a greener future, which creates hundreds of thousands of green, skilled jobs
by 2035, drives the levelling up agenda and generates opportunities for the growth of
British businesses.
 The strategy outlines a transition that focuses on reducing bills and improving comfort
through energy efficiency, and building the markets required to transition to low-
carbon heat and reducing costs, while testing the viability of hydrogen for heating.
 Aid and subsidies for renovation (% covered, name of organisations in charge, facilitators)

Program About Coverage Organisation in Facilitators

charge
Warmer Homes scheme6  For energy efficiency improvement  Maximum of £5,500 per home The Mayor of  Happy Energy Solutions
 Provides free heating, insulation and  Houses in Multiple Occupation London’s office Ltd
ventilation improvements for low-income (HMOs);
Londoners  £2,000 per dwelling
 £10,000 per building
Green Homes Grant -  Improve the energy efficiency of homes of  Tenants: £10,000 for installation of Department for  5 Local Energy Hubs
Local Authority Scheme 7
low-income households, low carbon heating systems, Business, Energy and  Local authorities
 Help reduce fuel poverty insulation and smart heating Industrial Strategy
 Phase-out high carbon fossil fuel heating controls8.
 Landlords: Up to £5,000 to cover
two-thirds of energy efficiency
work hence can get up to £7,500
worth of measures installed for a
maximum contribution of £2,500
Energy Company  Help reduce carbon emissions and tackle  Energy companies decide which Department for  Office of Gas and
6
https://www.london.gov.uk/what-we-do/housing-and-land/improving-quality/warmer-homes-faqs/how-much-grant-funding-available-each-home
7
https://www.gov.uk/government/publications/green-homes-grant-local-authority-delivery-scheme-phase-2-funding-allocated-to-local-energy-hubs
8
https://www.haringey.gov.uk/housing/housing-advice/home-heat-loss/grant-assistance
Obligation (ECO)
The Boiler Upgrade
Scheme9
fuel poverty. energy-saving measures they want Business, Energy and Electricity Markets
 Provide help for people who might be to install, and how much funding Industrial Strategy (Ofgem)
vulnerable to the effects of living in a cold they provide.  Obligated energy suppliers
home, like pensioners or young children  £150 off energy bills
 Obligated suppliers incur the costs of
meeting their scheme obligations, however,
they recoup these costs from their
customers’ energy bills
 Launched to help homeowners in England  £5,000 off the cost & installation Department for  MSC certified installers
and Wales afford the upfront costs of of an air source heat pump Business, Energy and  Office of Gas and
installing a heat pump  £5,000 off the cost & installation Industrial Strategy Electricity Markets
of a biomass boiler (Ofgem)
 £6,000 off the cost & installation
of a ground source heat pump

9
https://www.gov.uk/guidance/check-if-you-may-be-eligible-for-the-boiler-upgrade-scheme-from-april-2022
Annual renovation turnover by item, (insulation, heating, solar water heaters, heat
pumps, ventilation, air conditioning, etc.)

 UK Homeowners Spent £21 Billion On Renovations in 202110

 Building insulation market revenue was £1.4billion in 2021, a 16% decline from the
previous year largely due to the impact of Covid-19 restrictions on newbuild and
domestic retrofit activity11.
 The market is however forecasted to recover from 2022 onwards, with growth rates of
around 4-6% per annum through to 2024.
 This recovery is likely to be driven by strong demand for new housing, recovering
levels of non-residential new work and the prospect of an improved retrofitting
market through increased ECO funding from 2022.
 Plumbing, heat and air-conditioning installation in the UK was about £16bn12 and is
forecasted to grow to $23.37 billion by 2025.13
 The installation, maintenance and repair of central heating systems is estimated to
account for 45.2% of industry revenue in 2020-21, with general plumbing services
estimated to account for 24.5%

Renovation/Repair Turnover 2021 (£)

Insulation 308K
Heating 38m
Air-conditioning 30m
Ventilation 67m
Solar water heaters 29m
Heat pumps 55m

 Retrofitting estimated to account for 22% of installations of insulation and new

installations 78%.

10
https://www.money.co.uk/loans/renovation-nation
11
https://agilitypr.news/Building-Insulation-Market-Set-to-Bounce-17911
12
https://www.ibisworld.com/united-kingdom/market-research-reports/plumbing-heating-air-conditioning-
installation-industry/
13
https://www.statista.com/forecasts/397412/plumbing-heat-and-air-conditioning-installation-revenue-in-
the-united-kingdom
  Installation, maintenance and repair of central heating systems industry is
estimated = (45% x £16bn) = £720 million.
 Plumbing is estimated to be 41%, Heating 33% and Air conditioning 26% of the
revenue (i.e. £720 million)
 Installation is estimated to take a large proportion of each item’s revenue i.e.
Installation is 58%, Repair 16% and maintenance 26%.
 The Heating, Ventilation and Air Conditioning (HVAC) UK market is estimated
to be worth approximately £15.0bn14

5. Solar energy (resale or self-consumption) solar market, number of installations,

target to 2030.
7. For solar and charging stations: Turnover of the sector, profile and number of
installers, Aid and subsidies (% covered, name of organisations in charge, providers

 The solar energy market size in the UK was £538m in 2021.15.

 The number of installers’ businesses in the UK sum up to 2,072 and the industry
employs 2,428 people.

Reporting obligation/energy audit of housing (what are the obligations –

Energy audit of housing in the UK.
• For all records up to March 2021, the median energy efficiency score for houses in England
was 66, and 64 in Wales, which is equivalent to band D.
• In both England and Wales, flats and maisonettes were the most energy-efficient property
category, with a median energy efficiency score of 72, comparable to b and C whereas social
leased houses had the highest median energy efficiency score of all property types.
• In both England and Wales, new houses were more energy-efficient than existing dwellings,
but there was more variation in median energy efficiency scores across property types and
tenure in existing dwellings. In both nations, over eight out of ten homes used mains gas as
their primary source of central heating.16

14
https://www.hallidays.co.uk/views-and-insight/sector-report/heating-ventilation-and-air-conditioning-hvac-
industry
15
https://www.ibisworld.com/united-kingdom/market-research-reports/solar-panel-installation-industry/
16
Energy efficiency of housing in England and Wales: 2021 Office for National statistics, 2021
• Over half of the dwellings in one out of every ten local authorities had an energy efficiency
score of band C or higher; two-thirds of these were in London or the South East.17
The majority of new homes in England are in the most energy-efficient bands, according to
the latest figures. In the last quarter, 84% of new homes across the country were given an
energy rating of A or B, compared to 79% in the previous quarter. Statistics also show, that
392,000 domestic Energy Performance Certificates (EPCs) were lodged in England, an
increase of 10% from the same quarter in 2019.18
Reporting obligation.
Through various government support programs, such as the Energy Company Obligation, the
Green Deal, Green Homes Grant Vouchers, and Local Authority Delivery, around 3.6 million
energy-saving measures were installed in 2.5 million properties by the end of 2021.19
• Approximately 460,300 measures were implemented under these programs in 2021, a 42
percent increase over 2020. • The number of measures delivered by ECO in 2021 was
398,200, up 23% from 2020.
• Measures delivered through ECO accounted for 87 percent of all measures installed in
2021. • The provisional estimated lifetime carbon savings of measures installed under ECO,
Cashback, GDHIF, and GD Plans were up to 59 MtCO2 by the end of 2021. The provisional
estimated lifetime energy savings were up to 221,800 GWh. Of these totals, an estimated 4.2
MtCO2 and 13,700 GWh were from measures installed in 2021.
• By the end of 2021, 14.5 million properties had cavity wall insulation (70 percent of cavity
wall properties), 16.8 million had loft insulation (66 percent of loft properties), and 794,000
had solid wall insulation (nine percent of properties with solid walls).
Energy efficiency measures have already saved the average British household about £1,000 a
year in energy bills, and further insulation and home improvements could halve future bills,
analysis has shown. Electrical appliances such as light bulbs, fridges, and washing machines
now use much less power than 20 years ago, owing to EU directives. A 2005 UK government
regulation mandating the use of condensing boilers has brought down average gas use
significantly.

Energy consumption overall has declined by 16% since 2000 despite a 15% increase in the
number of homes, the average home is 10% larger, and the rise in appliance ownership.
Insulation, double glazing, and similar home upgrades have also somewhat reduced energy
use.20

17
https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/
energyefficiencyofhousinginenglandandwales/2021
18
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/
1018725/efus-Household-Energy-Consumption-Affordability.pdf
19
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/
1062658/HEE_Stats_Detailed_Report_Release_March_22.pdf
20
https://www.theguardian.com/environment/2022/jan/28/green-energy-measures-saving-households-
money-analysis-shows
Since 2002, the use of space heating units has declined by 35%. However, consumption of
space heating units increased slightly from 9.11 to 9.4 koe/m2 between 2016 and 2018.
However, between 2002 and 2018, the amount of energy used for water heating, cooking, and
electrical appliances declined by 26%, 29%, and 15%, respectively. Improved insulation,
heating system upgrades, and more energy-efficient electrical and gas appliances are all
contributing to the overall lower trend.
Consumption in 2020 was significantly affected by the Covid-19 pandemic and restrictions
put in place in response.
• Total energy consumption in the UK decreased by 17.9 million tonnes of oil equivalent
(Mtoe) (or 12.9 percent) between 2019 and 2020 to 121.0 mtoe.
• Consumption fell in industry, services, and transport but increased in the domestic sector.
Transport contributed 16.2 mtoe to the overall decrease slightly offset by a 0.9 mtoe increase
in domestic.
• With the exception of bioenergy and waste, all fuels saw a decrease, particularly petroleum
which fell by 15.9 mtoe (25 percent).
Government policies in the United Kingdom encourage the usage of renewable energy to
continue to expand. Nuclear power is likely to be an option for energy firms in the future,
despite the fact that a decision has yet to be taken. Nuclear power is, of course, enormously
divisive, and any plans for more reactors will almost certainly be met with fierce opposition.21
Flexible technologies like batteries will form part of the UK’s smarter electricity grid,
supporting the integration of more low-carbon power, heat and transport technologies, which
it is estimated could save the UK energy system up to £40 billion by 2050. Last month
ministers invested £10 million in the world’s largest and first liquid air battery facility in
Manchester. The 50 MW project, to be built in Trafford, will be able to store energy for
longer than a lithium battery – helping power 200,000 homes. But today’s announcement
could usher in batteries that are even bigger.

21
http://www.reuters.com/article/pressRelease/idUS82989+18-Feb-2008+BW20080218