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People And Nature ☭ Heat pumps and insulation are the keys to decarbonising home heating in a socially just way, Tom Ackers argues in this edited excerpt from his new pamphlet. In a linked article here, he surveys fuel poverty and the UK’s broken, inadequate mechanisms for monitoring it.

□ The whole pamphlet, Remaking Home Heating in the UK, is published today on People & Nature, and can be downloaded for free here.

We need a “twin track” approach for remaking home heating in the UK: wholesale electrification, and a universal programme of deep retrofit.

In this article, I set out policy proposals on the delivery of electricity; a universal programme of low-carbon heat; a universal programme of deep home retrofit; and an overarching agenda for governance, finance and industrial policy.

These proposals diverge from those of the Climate Change Committee (CCC) – not least, because of the CCC’s (in my view) erroneous application of “fiscal constraints”, and some overly limited assessments of “value for money”.

Electricity

  • Take the UK’s energy companies into public ownership.
  • Provide direct payments to low-income households, sufficient for them never to experience fuel poverty.
  • Remove all “policy costs” from electricity, without adding to those on gas. The capital costs of decarbonising the electricity grid should be paid entirely by the energy industry and government, with the government retaining suitable ownership of the newly built assets.

Low-carbon heat

Low-carbon heat in homes means replacing all existing sources of home heat with heat pumps, with district heat powered by heat pumps, and (in a minority of cases) with electric resistive heating. Those sources of heat are all powered by electricity.

Housing campaigners calling for retrofit, not demolition, on the “People’s Assembly”
demonstration for public services in June. Photo by Axe the Housing Act

However, they are only low- or zero-carbon when the source of electricity (on- or off-grid) is predominantly renewable: powered by the wind, sun, tidal, or nuclear.

Policy proposals

Low-carbon heat in 15 million homes by 2036, and in all about 36.5 million UK homes by 2050 at the latest. This is broadly in line with the Seventh Carbon Budget (7CB); however, I favour a far greater share of households to be heated via district heat. Providing one initial installation of low-carbon heat in 36.5 million homes would cost roughly £455 billion over 25 years.
Within two parliaments—or by the end of 2035 at the latest—low-carbon heat installed in all of the roughly 30% of the UK’s housing stock that accommodates low-income households. Government should pay almost all the costs of installing low-carbon heat.
More than 1.7 million annual low-carbon home heat installations by 2035.
More than 8 million home district heat connections by 2040, and more than 12 million by 2050. This compares with just 4 million connections by 2040 in the Sixth Carbon Budget, and now only about 2 million recommended by 2040 in the 7CB.[1] The state should finance, own, and oversee all projects. It should draw on the success of converting gas pipelines from town gas to the national gas grid. When operational, district heat networks should be run on a non-profit basis.

Figure 1. Proposed pathway of home heat electrification [2]


  • Target low flow temperatures, while maintaining thermal comfort in all rooms, with no increase in operational heating costs. All flow temperatures should be below 50°C by 2050.
  • All existing plumbers, air conditioning engineers, and electricians suitably trained and qualified for installing low-carbon sources of heat. This underlying capacity needs to run ahead of consumer demand.
  • Existing workforce expanded to provide productive capacity that matches or exceeds the BNZ pathway—around 100,000 extra plumbers and heating engineers, and about 40,000 more air conditioning and refrigeration engineers—appropriately situated throughout the UK.
  • Free training, retraining, and certification to meet those targets.
  • Bulk procurement of heat pumps and other necessary components—with a view to holding down opportunities for price gouging on the part of manufacturers. Where insufficient domestic manufacturing is in place, procurement would be import-led.
  • Significant expansion of domestic manufacturing capacity for the heat pump supply chain, and other low-carbon heat components.
  • Regulation of installation standards and wage costs.
  • Gas grid safely decommissioned—learning from the conversion of town gas. All homes must be safely disconnected. The costs must be covered by, or recovered from, the gas industry itself—the cost to them of doing business.
  • Electrification prioritised, instead of directing subsidies towards an increasingly uneconomical gas grid.
  • Plans to phase out gas boilers by 2035 reinstated. Impose a ban on gas / oil boilers, and wood-burning sources of heat, in all new homes under the Future Homes Standard (FHS).
  • Gas infrastructure recycled—where possible, directly reused for district heat.
  • Sale of all firewood phased out by 2030, and from 2035 require a specific “permit to burn” wood and all other forms of solid biomass.

Universal home retrofit

  • After 2025, all new build homes should have Passivhaus standards of fabric efficiency—supplemental energy use for space heating / cooling of within about 15 kilowatt hours per square metre per year (kWh/m2/year).[3]
  • All other homes should have the option, by 2050, of a deep retrofit such as those proposed by the Low Energy Transformation Initiative (LETI). Target fabric efficiencies that permit thermal comfort with no greater than 50 kWh/m2/year of supplemental heating / cooling. For “heritage constrained” homes, the target should be 60 kWh/m2/year. This would cost roughly £380 billion over 25 years.
  • A retrofit delivery plan should be prepared for all such homes, outlining the pace of retrofit alongside installation of low-carbon heat, and targeting low flow temperatures.

Figure 2. Pacing for a 25-year LETI-depth national retrofit programme[4]


  • A robust alternative to the Standard Assessment Proceedure (SAP), should be established, with the fabric efficiency of all homes documented through in-situ testing.
  • Wherever home heating is electrified before deep retrofit, shallow retrofit measures must be included—wherever necessary—during heating electrification.
  • The government should retrofit the homes of all low-income households to a LETI-depth standard within two parliaments—or by the end of 2034 at the latest.
  • Retrofits paid for by the government should in general be held back in all other homes, until the low-income objective is met.
  • As with low-carbon heat, the government needs to ensure sufficient training, standards, and wage guarantees are in place, to recruit a large retrofit workforce to the national retrofit programme. About about 440,000 such workers will be needed by the mid-2030s, across a variety of specialisms. The UK should seek to downsize new construction (especially “bullshit construction”), and thereby retrain and redeploy existing construction workers.[5]
  • Ensure a clear evidence base for fabric improvements through in-situ testing.
  • In-situ assessments should also be used to close any “performance gaps” that become evident during retrofit.
  • The quality of all retrofit work should be assessed, and the quality of all materials and labour underwritten by a universal guarantee. Any substandard, under-performing, or malfunctioning work should be redone, at no cost to householders.

I explore the likely total costs of a LETI-depth retrofit programme below. This should be purely elective on the part of householders, and the government should begin by paying all the costs of retrofit to all low-income homes.

Beyond low-income households, I think that the government should commit to paying for all of the costs of a LETI-depth retrofit, up to some designated maximum of (say) £25,000—beyond which all non-low-income home owners would pay the rest themselves, receiving 0% interest loans from the government to do so.

Governance, finance, and industrial policy

  • Government needs to proactively push electrification and fabric retrofit into people’s homes. Both tracks also require detailed planning. This should include:Establishing a National Home Heating and Retrofit Agency
  • Project management devolved down to the local and neighbourhood level
  • Overall project management run by civil servants in partnership with retrofit specialists and civil engineers. The process should not be blindly outsourced, but remain “in house” as far as possible, and remain subject to democratic oversight.
  • State management, guarantee, and audit of all commissioned work, nose-to-tail.
  • Households guided through the combined programme of electrification and retrofit by a reputable, state-guaranteed, third party. Decisions should be made on a household-to-household basis.
  • A home heat and retrofit delivery plan for each home, a combined strategy comprising a low-carbon heat delivery plan and a retrofit delivery plan. Plans put together in collaboration with households, and tailored according to their needs.
  • For all low-income homes, a low-carbon heat source, and a LETI-depth retrofit, within the next two parliaments, or by the end of 2034 at the latest. “Low income” corresponds to roughly the bottom 30% of households by income under existing support schemes, and this definition should stand or be expanded to include more households. “Fuel poor” homes should be front of the queue.
  • Large-scale programmes of education and retraining, to make sure that the right workforce is in place. Guaranteed, high-quality employment.
  • A rigorous system of standards and in-situ testing, to ensure high quality workmanship, and to close whatever “performance gaps” emerge.
  • Exacting and transparent standards of public procurement, keeping private rates of profit by contracted retrofit and plumbing firms within strict guidelines, and preempting any opportunities for corruption.
  • A coordinated programme of industrial and agricultural policy for the manufacture of insulation products. This should include the largescale use of straw (an agricultural waste product), alongside widespread cultivation of hemp.
  • All purchases and work subject to emissions audit, and rules to minimise estimated consumption-based lifecycle emissions and material use, over a 50-year time horizon.
  • All domestic production and imports subject to ethical spending requirements, with high labour and environmental standards, and supply chain audit.

The argument for retrofit

“Heatpumpification” is the main route to decarbonising the home heating system. It is also the main route to energy efficiency savings in home heating.

Contrary to what is sometimes assumed (and contrary to how it is often presented by the CCC) the task of insulating homes plays a minor part in decarbonising the economy. That is because, as home heating itself is electrified, and the grid decarbonised, any further reductions in fossil fuel consumption brought by retrofit remain marginal.

Until comparatively recently, however, a “fabric first” approach remained the accepted wisdom when it came to energy efficiency. On that basis, significant fabric efficiency improvements were thought to be crucial for home heating decarbonisation. However, things have now changed

From a climate standpoint, nobody seriously disputes that we need to get rid of gas boilers and install heat pumps and other electrical sources of heat instead.[6] To that extent, the money “costs” of home heating electrification—whatever they end up being, and whoever foots the bill—are fixed in place, as an essential component of the UK’s political economy over the next 30 years.

On the other hand, since a decent retrofit programme is not essential for climate, the even larger monetary outlays necessary for achieving it are nowadays often balked at and avoided. This is a mistake. A “deep”, universal programme of retrofit remains compelling. The main argument in favour of such a programme is that it would improve living standards for everyone.

Following the electrification of home heating, deep retrofit would also substantially reduce electricity consumption needs across the whole of the UK, compared with the electrification of home heating on its own.

I favour a “twin track” approach, with an ambitious and universal programme of fabric renovations for all the UK’s homes, mostly funded by the government.

One of the reasons that the comparatively high costs of deep retrofit are feared is that it is assumed that high upfront costs are inevitably a barrier for the delivery of social goods. In the case of retrofit, it is further assumed that households would foot the bill themselves—either directly, or indirectly through taxes.

All such work as is necessary should be “paid for” primarily by the government. As notional “investment”, it should come from deficit spending. However, this should be funded primarily by the Bank of England (monetary finance); additional borrowing should only be undertaken to the extent that those monetary instruments (and any corresponding government interest payments) are judged to be independently beneficial to the population at large.

The government should pursue a “full employment fiscal deficit condition”. A range of new wealth taxes should additionally be used to compensate for the likely unequal distributional impacts of a universal retrofit programme. (I explain these proposals in more detail in Appendix A of the pamphlet.)

Focusing only on the amount of money needed to deliver social goods is in any case an analytical mistake, in my view, as well as morally wrong. But on a crude “cost benefit” analysis it is also economically nonsensical. There are three aspects to this.

The first is straightforward, but comparatively insignificant. It concerns the amount of spending that the UK government undertook to support household energy consumption in the months after Russia’s invasion of Ukraine. The government paid out about £39 billion between October 2022 and March 2023, according to the Department for Energy Security and Net Zero—primarily in support of the Energy Price Guarantee (EPG).

If the UK’s homes were already insulated to the LETI retrofit standards, then the costs of supporting customers through 2022-23 would have been about 60% less—a saving of about £23 billion. Similar costs would be avoided in the event of “another Ukraine”.

Nevertheless, £23 billion in one year is a lot less than £383 billion over 25 years.

The second, and most important point, is more long term, and therefore drives deeper economic benefits. In this regard, a useful calculation by the Building Research Establishment (BRE) indicates that the costs to society of cold and damp homes amount to about £19 billion annually, just for England alone (2023 prices).[7] If true, then that suggests a needless ongoing cost to the UK as a whole of about £23 billion annually (2023 prices), driven by misery. Only about 6% of that derives from the direct costs to the NHS.

Hemp fibre insulation. Photo: AdobeStock

At current GDP levels (about £2,500 billion annually), that represents a loss of about 0.9% of GDP per annum.[8] Many of those costs could be eradicated by a universally-applied, LETI-depth retrofit programme, which at its peak would “cost” less than that amount per year: about £20 billion, or roughly about 0.8% of GDP.[9] If the BRE estimate is accurate, a universal LETI-depth retrofit would have likely “paid for itself” by 2055.[10] It would leave everyone better off, in better health, and happier than they would otherwise be—all while providing opportunities for rewarding work and decent pay.

The benefits of deep retrofit would be durable and long-lasting. Even if the BRE’s estimate of the economic cost of leaky homes proved to be an over-estimate, or if the economic “net benefit” arrived later than 2053, the health and economic benefits would still be long lasting. A gas boiler lasts around 15 years, and a heat pump lasts perhaps 25 years. The service lifetime of an improved building fabric (provided it is done well) can last for centuries.

Meanwhile, the annual “cost savings” after universal retrofit was complete would continue to accrue during a time of acute social and environmental crisis—when such savings in materials, wellbeing and monetary resources could be very useful indeed. The social savings would leave us, collectively, with more resources to spend—so that money, materials and labour could be redeployed elsewhere, providing other useful things, and addressing other needs in society.

There is an assumption, implicit in the position of the CCC and others, that the large ongoing economic costs to society from cold and damp homes are concentrated in low-income households—and that public spending on retrofit should therefore be targeted on those homes and nowhere else. No doubt there is some truth to that—although, counterintuitively, research by Southampton Data Observatory finds “little evidence to show a clear relationship between deprivation and winter mortality”, including for people over 85 years old. In my view, a “triage” approach to spending is broadly correct.

I suggest that all low-income homes (roughly the lowest 30% of households by income) should receive a LETI-depth retrofit by the end of 2034 at the latest. However, it seems implausible that the social costs of poor housing are strictly confined to those who are economically worst off. Triage should be just the beginning.

Moreover, the prevailing approach to retrofit, consumed as it is by worries about costs, limits the depth of retrofit to something far short of a LETI-depth programme. How far short is difficult to say, because the CCC and others (as yet) provide no physical benchmarks for retrofit.

Comparatively deep retrofit is best, and a universal programme of retrofit is preferable. Together, they would secure the deepest, broadest and most durable benefits, in terms of improved health and wellbeing.

The third economic argument for deep retrofit is about energy efficiency. This runs parallel to the first point about the Energy Price Guarantee and the Ukraine war.

Reducing the original need for home heat would significantly reduce overall energy consumption. That energy reduction would stand in place forever. There are different phases to this:

Within the UK, while the home heating system remains dependent on non-renewable sources of energy, any reductions in energy consumption would serve to decrease ongoing needs to burn fossil fuels or biomass—whether in the home, or to generate electricity.

However, retrofit would bank long-term reductions in energy consumption. Those could prove crucial, as the whole of society comes to depend on electricity derived from renewable sources.

There are two sides to this. First is the issue of everyday energy consumption. Reducing the need for thermal energy means reducing the consumption of gas, electricity, and other energy carriers. If and when a 100% renewable electricity system is in place, retrofit would reduce our physical need for all forms of electricity infrastructure—generation, transmission, and storage.

Second is the issue of providing sufficient sources of power at “peak” times of energy consumption—for example, during the coldest days in winter. Even with a nominally decarbonised electricity grid, the energy companies and government are presently indicating that the grid will depend on “dispatchable” power at peak times—with electricity coming from natural gas and biomass combustion. Alongside that, buffering supply and demand will depend on sufficient energy storage being in place: whether in the form of pumped hydro, thermal storage, electrical storage batteries, or other methods. All such sources of stored power impose material footprints. Once again, all such needs would be radically constrained by retrofit.

Looking beyond the UK, reducing all kinds of material consumption is also a moral imperative. That is especially the case for rich countries like the UK, with our currently outsized material and environmental consumption footprints. I have already mentioned the need for “contraction and convergence”.

Moreover, the argument for reducing energy infrastructure is especially strong so long as the critical minerals for batteries, wind turbines and solar panels remain limited in supply, and bound up, as they presently are, with appalling conditions of exploitation, displacement and environmental degradation.

In addition to the benefits to health and welfare that would accrue domestically from a LETI-depth retrofit programme, some clear infrastructure savings would uphold some degree of moral obligation to the rest of the world.

The likely money “costs” of providing a universal LETI-depth retrofit programme considerably outweigh the upfront money savings in energy infrastructure. However, as above: the money savings from improvements to health and wellbeing would stand in society at large. After retrofit was complete, they would accrue to the tune of about £23 billion annually. It is unlikely that there would be any additional money savings for from the reduction in necessary infrastructure.

Nevertheless, as above, households would be able to consume much less energy for heating.

As should be clear, I think that the social and material content, and the aggregate social benefits of a LETI-depth retrofit programme are far preferable to the alternatives—of either doing nothing; or pursuing more modest, incremental changes to fabric efficiency, with a superficially economical, “low cost” approach, like the one advocated by the CCC and government.

The LETI retrofit programme I put forward here would lift everyone’s wellbeing for the long term, and bring deep social benefits. It would provide high quality, skilled employment for workers in the UK. It would free up our collective capacities; reduce the quantity of critical minerals consumed; bring greater energy security, and bring durable energy efficiencies across the whole of society.

🔴This is an excerpt from Remaking Home Heating in the UK, a People & Nature pamphlet by Tom Ackers, which can be downloaded for free here. In a linked article here, he surveys fuel poverty and the UK’s broken, inadequate mechanisms for monitoring it

🔴 Two further excerpts, on electrification and retrofit, will be published by People & Nature tomorrow

🔴 More People & Nature commentary and analysis of the decarbonisation of home heating is here.

References

[1] See the Sixth Carbon Budget (6CB, 2020) Dataset; Seventh Carbon Budget (7CB, 2025) Dataset and Advice Report, p.165

[2] Author’s calculations, based on 7CB (2025) Dataset. § Forecast number of homes comprise historic data (ONS, 2019), plus 6CB (2020) forecasts for 2035 and 2050 (6CB Methodology Report, p.31). * Certified number of home heat pump installations: UK Microgeneration Certification Scheme (MCS) data dashboard. ** Primarily, electric resistive heating combined with a storage heater

[3] The Passivhaus Standard entails very high levels of building fabric efficiency. Interior temperatures are maintained at a comfortable level year-round primary via “passive” means, so that little to no supplemental energy is required for that task

[4] § Forecast number of homes comprise historic data (ONS, 2019), plus 6CB (2020) forecasts for 2035 and 2050 (6CB Methodology Report, p.31)

[5] By “bullshit construction”, I mean construction that actively harms society, while wasting valuable resources of materials and labour

[6] Hydrogen boilers are a waste of time and resources. Advocates in favour of them have mostly fallen away. See Part 10 of Decarbonising the Built Environment: a Global Overview

[7] BRE estimate for 2018. Author’s conversion to 2023 prices

[8] See data compiled by Statista, here. For UK government figures see here

[9] The UK’s GDP stood at about £2,600 billion in 2024, by the author’s calculation, based on ballpark estimates by LETI, the UK Green Building Council (UKGBC), and the Construction Leadership Council (CLC). The 0.8% figure assumes no simultaneous rise in UK GDP

[10] Author’s estimate, based on the assumption that the money-saving impacts of retrofit are proportional to cumulative spending

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Heating Homes 🪶 We Need Electrification And Universal Retrofit

People And Nature ☭ Heat pumps and insulation are the keys to decarbonising home heating in a socially just way, Tom Ackers argues in this edited excerpt from his new pamphlet. In a linked article here, he surveys fuel poverty and the UK’s broken, inadequate mechanisms for monitoring it.

□ The whole pamphlet, Remaking Home Heating in the UK, is published today on People & Nature, and can be downloaded for free here.

We need a “twin track” approach for remaking home heating in the UK: wholesale electrification, and a universal programme of deep retrofit.

In this article, I set out policy proposals on the delivery of electricity; a universal programme of low-carbon heat; a universal programme of deep home retrofit; and an overarching agenda for governance, finance and industrial policy.

These proposals diverge from those of the Climate Change Committee (CCC) – not least, because of the CCC’s (in my view) erroneous application of “fiscal constraints”, and some overly limited assessments of “value for money”.

Electricity

  • Take the UK’s energy companies into public ownership.
  • Provide direct payments to low-income households, sufficient for them never to experience fuel poverty.
  • Remove all “policy costs” from electricity, without adding to those on gas. The capital costs of decarbonising the electricity grid should be paid entirely by the energy industry and government, with the government retaining suitable ownership of the newly built assets.

Low-carbon heat

Low-carbon heat in homes means replacing all existing sources of home heat with heat pumps, with district heat powered by heat pumps, and (in a minority of cases) with electric resistive heating. Those sources of heat are all powered by electricity.

Housing campaigners calling for retrofit, not demolition, on the “People’s Assembly”
demonstration for public services in June. Photo by Axe the Housing Act

However, they are only low- or zero-carbon when the source of electricity (on- or off-grid) is predominantly renewable: powered by the wind, sun, tidal, or nuclear.

Policy proposals

Low-carbon heat in 15 million homes by 2036, and in all about 36.5 million UK homes by 2050 at the latest. This is broadly in line with the Seventh Carbon Budget (7CB); however, I favour a far greater share of households to be heated via district heat. Providing one initial installation of low-carbon heat in 36.5 million homes would cost roughly £455 billion over 25 years.
Within two parliaments—or by the end of 2035 at the latest—low-carbon heat installed in all of the roughly 30% of the UK’s housing stock that accommodates low-income households. Government should pay almost all the costs of installing low-carbon heat.
More than 1.7 million annual low-carbon home heat installations by 2035.
More than 8 million home district heat connections by 2040, and more than 12 million by 2050. This compares with just 4 million connections by 2040 in the Sixth Carbon Budget, and now only about 2 million recommended by 2040 in the 7CB.[1] The state should finance, own, and oversee all projects. It should draw on the success of converting gas pipelines from town gas to the national gas grid. When operational, district heat networks should be run on a non-profit basis.

Figure 1. Proposed pathway of home heat electrification [2]


  • Target low flow temperatures, while maintaining thermal comfort in all rooms, with no increase in operational heating costs. All flow temperatures should be below 50°C by 2050.
  • All existing plumbers, air conditioning engineers, and electricians suitably trained and qualified for installing low-carbon sources of heat. This underlying capacity needs to run ahead of consumer demand.
  • Existing workforce expanded to provide productive capacity that matches or exceeds the BNZ pathway—around 100,000 extra plumbers and heating engineers, and about 40,000 more air conditioning and refrigeration engineers—appropriately situated throughout the UK.
  • Free training, retraining, and certification to meet those targets.
  • Bulk procurement of heat pumps and other necessary components—with a view to holding down opportunities for price gouging on the part of manufacturers. Where insufficient domestic manufacturing is in place, procurement would be import-led.
  • Significant expansion of domestic manufacturing capacity for the heat pump supply chain, and other low-carbon heat components.
  • Regulation of installation standards and wage costs.
  • Gas grid safely decommissioned—learning from the conversion of town gas. All homes must be safely disconnected. The costs must be covered by, or recovered from, the gas industry itself—the cost to them of doing business.
  • Electrification prioritised, instead of directing subsidies towards an increasingly uneconomical gas grid.
  • Plans to phase out gas boilers by 2035 reinstated. Impose a ban on gas / oil boilers, and wood-burning sources of heat, in all new homes under the Future Homes Standard (FHS).
  • Gas infrastructure recycled—where possible, directly reused for district heat.
  • Sale of all firewood phased out by 2030, and from 2035 require a specific “permit to burn” wood and all other forms of solid biomass.

Universal home retrofit

  • After 2025, all new build homes should have Passivhaus standards of fabric efficiency—supplemental energy use for space heating / cooling of within about 15 kilowatt hours per square metre per year (kWh/m2/year).[3]
  • All other homes should have the option, by 2050, of a deep retrofit such as those proposed by the Low Energy Transformation Initiative (LETI). Target fabric efficiencies that permit thermal comfort with no greater than 50 kWh/m2/year of supplemental heating / cooling. For “heritage constrained” homes, the target should be 60 kWh/m2/year. This would cost roughly £380 billion over 25 years.
  • A retrofit delivery plan should be prepared for all such homes, outlining the pace of retrofit alongside installation of low-carbon heat, and targeting low flow temperatures.

Figure 2. Pacing for a 25-year LETI-depth national retrofit programme[4]


  • A robust alternative to the Standard Assessment Proceedure (SAP), should be established, with the fabric efficiency of all homes documented through in-situ testing.
  • Wherever home heating is electrified before deep retrofit, shallow retrofit measures must be included—wherever necessary—during heating electrification.
  • The government should retrofit the homes of all low-income households to a LETI-depth standard within two parliaments—or by the end of 2034 at the latest.
  • Retrofits paid for by the government should in general be held back in all other homes, until the low-income objective is met.
  • As with low-carbon heat, the government needs to ensure sufficient training, standards, and wage guarantees are in place, to recruit a large retrofit workforce to the national retrofit programme. About about 440,000 such workers will be needed by the mid-2030s, across a variety of specialisms. The UK should seek to downsize new construction (especially “bullshit construction”), and thereby retrain and redeploy existing construction workers.[5]
  • Ensure a clear evidence base for fabric improvements through in-situ testing.
  • In-situ assessments should also be used to close any “performance gaps” that become evident during retrofit.
  • The quality of all retrofit work should be assessed, and the quality of all materials and labour underwritten by a universal guarantee. Any substandard, under-performing, or malfunctioning work should be redone, at no cost to householders.

I explore the likely total costs of a LETI-depth retrofit programme below. This should be purely elective on the part of householders, and the government should begin by paying all the costs of retrofit to all low-income homes.

Beyond low-income households, I think that the government should commit to paying for all of the costs of a LETI-depth retrofit, up to some designated maximum of (say) £25,000—beyond which all non-low-income home owners would pay the rest themselves, receiving 0% interest loans from the government to do so.

Governance, finance, and industrial policy

  • Government needs to proactively push electrification and fabric retrofit into people’s homes. Both tracks also require detailed planning. This should include:Establishing a National Home Heating and Retrofit Agency
  • Project management devolved down to the local and neighbourhood level
  • Overall project management run by civil servants in partnership with retrofit specialists and civil engineers. The process should not be blindly outsourced, but remain “in house” as far as possible, and remain subject to democratic oversight.
  • State management, guarantee, and audit of all commissioned work, nose-to-tail.
  • Households guided through the combined programme of electrification and retrofit by a reputable, state-guaranteed, third party. Decisions should be made on a household-to-household basis.
  • A home heat and retrofit delivery plan for each home, a combined strategy comprising a low-carbon heat delivery plan and a retrofit delivery plan. Plans put together in collaboration with households, and tailored according to their needs.
  • For all low-income homes, a low-carbon heat source, and a LETI-depth retrofit, within the next two parliaments, or by the end of 2034 at the latest. “Low income” corresponds to roughly the bottom 30% of households by income under existing support schemes, and this definition should stand or be expanded to include more households. “Fuel poor” homes should be front of the queue.
  • Large-scale programmes of education and retraining, to make sure that the right workforce is in place. Guaranteed, high-quality employment.
  • A rigorous system of standards and in-situ testing, to ensure high quality workmanship, and to close whatever “performance gaps” emerge.
  • Exacting and transparent standards of public procurement, keeping private rates of profit by contracted retrofit and plumbing firms within strict guidelines, and preempting any opportunities for corruption.
  • A coordinated programme of industrial and agricultural policy for the manufacture of insulation products. This should include the largescale use of straw (an agricultural waste product), alongside widespread cultivation of hemp.
  • All purchases and work subject to emissions audit, and rules to minimise estimated consumption-based lifecycle emissions and material use, over a 50-year time horizon.
  • All domestic production and imports subject to ethical spending requirements, with high labour and environmental standards, and supply chain audit.

The argument for retrofit

“Heatpumpification” is the main route to decarbonising the home heating system. It is also the main route to energy efficiency savings in home heating.

Contrary to what is sometimes assumed (and contrary to how it is often presented by the CCC) the task of insulating homes plays a minor part in decarbonising the economy. That is because, as home heating itself is electrified, and the grid decarbonised, any further reductions in fossil fuel consumption brought by retrofit remain marginal.

Until comparatively recently, however, a “fabric first” approach remained the accepted wisdom when it came to energy efficiency. On that basis, significant fabric efficiency improvements were thought to be crucial for home heating decarbonisation. However, things have now changed

From a climate standpoint, nobody seriously disputes that we need to get rid of gas boilers and install heat pumps and other electrical sources of heat instead.[6] To that extent, the money “costs” of home heating electrification—whatever they end up being, and whoever foots the bill—are fixed in place, as an essential component of the UK’s political economy over the next 30 years.

On the other hand, since a decent retrofit programme is not essential for climate, the even larger monetary outlays necessary for achieving it are nowadays often balked at and avoided. This is a mistake. A “deep”, universal programme of retrofit remains compelling. The main argument in favour of such a programme is that it would improve living standards for everyone.

Following the electrification of home heating, deep retrofit would also substantially reduce electricity consumption needs across the whole of the UK, compared with the electrification of home heating on its own.

I favour a “twin track” approach, with an ambitious and universal programme of fabric renovations for all the UK’s homes, mostly funded by the government.

One of the reasons that the comparatively high costs of deep retrofit are feared is that it is assumed that high upfront costs are inevitably a barrier for the delivery of social goods. In the case of retrofit, it is further assumed that households would foot the bill themselves—either directly, or indirectly through taxes.

All such work as is necessary should be “paid for” primarily by the government. As notional “investment”, it should come from deficit spending. However, this should be funded primarily by the Bank of England (monetary finance); additional borrowing should only be undertaken to the extent that those monetary instruments (and any corresponding government interest payments) are judged to be independently beneficial to the population at large.

The government should pursue a “full employment fiscal deficit condition”. A range of new wealth taxes should additionally be used to compensate for the likely unequal distributional impacts of a universal retrofit programme. (I explain these proposals in more detail in Appendix A of the pamphlet.)

Focusing only on the amount of money needed to deliver social goods is in any case an analytical mistake, in my view, as well as morally wrong. But on a crude “cost benefit” analysis it is also economically nonsensical. There are three aspects to this.

The first is straightforward, but comparatively insignificant. It concerns the amount of spending that the UK government undertook to support household energy consumption in the months after Russia’s invasion of Ukraine. The government paid out about £39 billion between October 2022 and March 2023, according to the Department for Energy Security and Net Zero—primarily in support of the Energy Price Guarantee (EPG).

If the UK’s homes were already insulated to the LETI retrofit standards, then the costs of supporting customers through 2022-23 would have been about 60% less—a saving of about £23 billion. Similar costs would be avoided in the event of “another Ukraine”.

Nevertheless, £23 billion in one year is a lot less than £383 billion over 25 years.

The second, and most important point, is more long term, and therefore drives deeper economic benefits. In this regard, a useful calculation by the Building Research Establishment (BRE) indicates that the costs to society of cold and damp homes amount to about £19 billion annually, just for England alone (2023 prices).[7] If true, then that suggests a needless ongoing cost to the UK as a whole of about £23 billion annually (2023 prices), driven by misery. Only about 6% of that derives from the direct costs to the NHS.

Hemp fibre insulation. Photo: AdobeStock

At current GDP levels (about £2,500 billion annually), that represents a loss of about 0.9% of GDP per annum.[8] Many of those costs could be eradicated by a universally-applied, LETI-depth retrofit programme, which at its peak would “cost” less than that amount per year: about £20 billion, or roughly about 0.8% of GDP.[9] If the BRE estimate is accurate, a universal LETI-depth retrofit would have likely “paid for itself” by 2055.[10] It would leave everyone better off, in better health, and happier than they would otherwise be—all while providing opportunities for rewarding work and decent pay.

The benefits of deep retrofit would be durable and long-lasting. Even if the BRE’s estimate of the economic cost of leaky homes proved to be an over-estimate, or if the economic “net benefit” arrived later than 2053, the health and economic benefits would still be long lasting. A gas boiler lasts around 15 years, and a heat pump lasts perhaps 25 years. The service lifetime of an improved building fabric (provided it is done well) can last for centuries.

Meanwhile, the annual “cost savings” after universal retrofit was complete would continue to accrue during a time of acute social and environmental crisis—when such savings in materials, wellbeing and monetary resources could be very useful indeed. The social savings would leave us, collectively, with more resources to spend—so that money, materials and labour could be redeployed elsewhere, providing other useful things, and addressing other needs in society.

There is an assumption, implicit in the position of the CCC and others, that the large ongoing economic costs to society from cold and damp homes are concentrated in low-income households—and that public spending on retrofit should therefore be targeted on those homes and nowhere else. No doubt there is some truth to that—although, counterintuitively, research by Southampton Data Observatory finds “little evidence to show a clear relationship between deprivation and winter mortality”, including for people over 85 years old. In my view, a “triage” approach to spending is broadly correct.

I suggest that all low-income homes (roughly the lowest 30% of households by income) should receive a LETI-depth retrofit by the end of 2034 at the latest. However, it seems implausible that the social costs of poor housing are strictly confined to those who are economically worst off. Triage should be just the beginning.

Moreover, the prevailing approach to retrofit, consumed as it is by worries about costs, limits the depth of retrofit to something far short of a LETI-depth programme. How far short is difficult to say, because the CCC and others (as yet) provide no physical benchmarks for retrofit.

Comparatively deep retrofit is best, and a universal programme of retrofit is preferable. Together, they would secure the deepest, broadest and most durable benefits, in terms of improved health and wellbeing.

The third economic argument for deep retrofit is about energy efficiency. This runs parallel to the first point about the Energy Price Guarantee and the Ukraine war.

Reducing the original need for home heat would significantly reduce overall energy consumption. That energy reduction would stand in place forever. There are different phases to this:

Within the UK, while the home heating system remains dependent on non-renewable sources of energy, any reductions in energy consumption would serve to decrease ongoing needs to burn fossil fuels or biomass—whether in the home, or to generate electricity.

However, retrofit would bank long-term reductions in energy consumption. Those could prove crucial, as the whole of society comes to depend on electricity derived from renewable sources.

There are two sides to this. First is the issue of everyday energy consumption. Reducing the need for thermal energy means reducing the consumption of gas, electricity, and other energy carriers. If and when a 100% renewable electricity system is in place, retrofit would reduce our physical need for all forms of electricity infrastructure—generation, transmission, and storage.

Second is the issue of providing sufficient sources of power at “peak” times of energy consumption—for example, during the coldest days in winter. Even with a nominally decarbonised electricity grid, the energy companies and government are presently indicating that the grid will depend on “dispatchable” power at peak times—with electricity coming from natural gas and biomass combustion. Alongside that, buffering supply and demand will depend on sufficient energy storage being in place: whether in the form of pumped hydro, thermal storage, electrical storage batteries, or other methods. All such sources of stored power impose material footprints. Once again, all such needs would be radically constrained by retrofit.

Looking beyond the UK, reducing all kinds of material consumption is also a moral imperative. That is especially the case for rich countries like the UK, with our currently outsized material and environmental consumption footprints. I have already mentioned the need for “contraction and convergence”.

Moreover, the argument for reducing energy infrastructure is especially strong so long as the critical minerals for batteries, wind turbines and solar panels remain limited in supply, and bound up, as they presently are, with appalling conditions of exploitation, displacement and environmental degradation.

In addition to the benefits to health and welfare that would accrue domestically from a LETI-depth retrofit programme, some clear infrastructure savings would uphold some degree of moral obligation to the rest of the world.

The likely money “costs” of providing a universal LETI-depth retrofit programme considerably outweigh the upfront money savings in energy infrastructure. However, as above: the money savings from improvements to health and wellbeing would stand in society at large. After retrofit was complete, they would accrue to the tune of about £23 billion annually. It is unlikely that there would be any additional money savings for from the reduction in necessary infrastructure.

Nevertheless, as above, households would be able to consume much less energy for heating.

As should be clear, I think that the social and material content, and the aggregate social benefits of a LETI-depth retrofit programme are far preferable to the alternatives—of either doing nothing; or pursuing more modest, incremental changes to fabric efficiency, with a superficially economical, “low cost” approach, like the one advocated by the CCC and government.

The LETI retrofit programme I put forward here would lift everyone’s wellbeing for the long term, and bring deep social benefits. It would provide high quality, skilled employment for workers in the UK. It would free up our collective capacities; reduce the quantity of critical minerals consumed; bring greater energy security, and bring durable energy efficiencies across the whole of society.

🔴This is an excerpt from Remaking Home Heating in the UK, a People & Nature pamphlet by Tom Ackers, which can be downloaded for free here. In a linked article here, he surveys fuel poverty and the UK’s broken, inadequate mechanisms for monitoring it

🔴 Two further excerpts, on electrification and retrofit, will be published by People & Nature tomorrow

🔴 More People & Nature commentary and analysis of the decarbonisation of home heating is here.

References

[1] See the Sixth Carbon Budget (6CB, 2020) Dataset; Seventh Carbon Budget (7CB, 2025) Dataset and Advice Report, p.165

[2] Author’s calculations, based on 7CB (2025) Dataset. § Forecast number of homes comprise historic data (ONS, 2019), plus 6CB (2020) forecasts for 2035 and 2050 (6CB Methodology Report, p.31). * Certified number of home heat pump installations: UK Microgeneration Certification Scheme (MCS) data dashboard. ** Primarily, electric resistive heating combined with a storage heater

[3] The Passivhaus Standard entails very high levels of building fabric efficiency. Interior temperatures are maintained at a comfortable level year-round primary via “passive” means, so that little to no supplemental energy is required for that task

[4] § Forecast number of homes comprise historic data (ONS, 2019), plus 6CB (2020) forecasts for 2035 and 2050 (6CB Methodology Report, p.31)

[5] By “bullshit construction”, I mean construction that actively harms society, while wasting valuable resources of materials and labour

[6] Hydrogen boilers are a waste of time and resources. Advocates in favour of them have mostly fallen away. See Part 10 of Decarbonising the Built Environment: a Global Overview

[7] BRE estimate for 2018. Author’s conversion to 2023 prices

[8] See data compiled by Statista, here. For UK government figures see here

[9] The UK’s GDP stood at about £2,600 billion in 2024, by the author’s calculation, based on ballpark estimates by LETI, the UK Green Building Council (UKGBC), and the Construction Leadership Council (CLC). The 0.8% figure assumes no simultaneous rise in UK GDP

[10] Author’s estimate, based on the assumption that the money-saving impacts of retrofit are proportional to cumulative spending

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