Improving home energy efficiency - retrofit assessment review: policy report

Objective 2: Gaps in current methodologies

What are the shortfalls of current methodologies to deliver HEETSA’s objectives and how to overcome them.

Unsuitability of individual methods for comparative assessment

Current retrofit assessment methodologies do not fully capture the costs and benefits of fabric improvements in a whole-building approach and potentials for consideration of communal and district heating schemes. While tools like SAP, RdSAP, and PHPP measure heating demand, they fail to consider factors such as user behaviour, regional cost variations, and long-term operational savings. While they can be adapted to compare different heating solutions or communal heating systems, doing so requires significant effort and expertise, which is rarely feasible in resource-limited projects.

Obstacles to comparative analysis

PAS 2035 and PAS 2038 may prioritise ‘fabric first’ considerations (insulation and airtightness) before recommending heating upgrades. These frameworks may allow for more holistic assessment of risks, cost benefits, long-term energy and carbon emissions reductions and occupant comfort. However, these standards are voluntary, and adherence relies on the expertise of the assessor and quality of implementation. Other standards, such as the Royal Institution of Chartered Surveyors (RICS) ‘Residential Retrofit Standard’ and ‘BS 40104 Retrofit assessment for domestic dwellings – Code of practice’, provide valuable professional conduct guidance but are not intended for cost-benefit or comparative analysis of options.

Many tools are limited in scope, providing generic recommendations, without context specific retrofitting scenarios required for adequate comparative analysis for energy efficiency and clean heating options. This process can be time consuming, relying on building specific data analysis and expertise of the assessor.

Although some methodologies prioritize a ‘fabric first’ approach essential for optimizing thermal efficiency and enhancing communal heating system performance, there is little focus on assessment of building condition and maintenance.

Lifecycle impact and post occupancy evaluation

Current assessment tools fail to adequately integrate whole-life carbon analysis, lifecycle costs, and mandate POE in line with BS 40101:2022. These gaps limit informed decision-making on material sustainability, considering toxicity, impact on indoor air quality and safeguard long-term health of the occupant in future operational scenarios. Additionally, appraisal of delivered projects would allow for learning from experience, supporting customer-focused delivery.

It was also noted that methodologies should incorporate whole lifecycle assessments of products and measures. This would help in understanding maintenance and replacement cycles while ensuring proper reuse and disposal planning in line with national circular economy strategies. Such evaluations would be especially beneficial in supporting phased retrofit approaches.

Barriers to deployment and scalability of Communal Heating and District Heating

While assessments such as SAP include communal heating schemes, they all have their limitations, for example overlooking critical elements such as fuel sources, combined heat and power (CHP) systems, and heat pumps in district networks, limiting their usefulness in evaluating system-wide efficiency. Assessment methods often fail to capture complexities such as shared infrastructure, collective energy management, scalability, and cost allocation, overly relying on assumptions, rather than context-specific analysis. Additionally, a major obstacle to district heating expansion is the lack of reliable data on building energy demand.

Current methodologies, policies, and funding structures often favour individual heat pumps over communal heating. A more balanced approach requires:

• detailed performance data,
• whole lifecycle assessments,
• localised planning considerations to enhance communal heating’s viability
• transparent methodologies improving public confidence

Regulatory and Planning Barriers

Planning regulations often lack the flexibility needed to adapt communal heating systems to new technologies or changing demands. Local Development Plans (LDPs) may not align with LHEES goals, hindering scalability. The approach needs to be location specific, with tailored solutions required especially in rural areas.

Current Local Heat and Energy Efficiency Strategies (LHEES) depend heavily on estimated energy consumption from Energy Performance Certificates (EPCs), leading to overdesigning systems for peak demand scenarios that rarely occur. This creates financial and operational inefficiencies, increasing costs and investment risks. Additionally, concerns about technical failures in some district heating systems and high energy prices for users, particularly in gas-fuelled networks, contribute to public scepticism.

Opportunities for HEETSA

It has been recognised that existing methodologies are often fragmented, leading to inefficient retrofit decisions.

The evidence leads us to conclude that no single methodology is sufficient for meeting all HEETSA’s objectives. Therefore, the options are:

1. Create a bespoke methodology

2. Work with the provider of an existing methodology to adapt it to meet HEETSA’s objectives

3. Accept that a combination of existing methodologies will be needed, develop a simple framework for their use, and use this to identify where gaps need to be plugged – particularly with regard to the evaluation of the suitability of different individual and communal / district heating options

We are of the view that options 1 and 2 would be prohibited by financial and time costs, and therefore option 3 becomes the default option. Defining adequate method of evaluation of aspects such as suitability of heating options would be necessary to address gaps in the existing methodologies. This could be implemented by developing a simple decision-making tree for use by retrofit consultants^[6]. Such a tool would require or rule out the use of an assessment methodology based on questions such as whether a retrofit is intended to meet Passivhaus-equivalent standards, and whether the intention is to replace a heating system with either an individual solution or a connection to a shared heat supply network, etc. Decision-making process recognising staged retrofit assessment requirement and addressing different skills needed to undertake it could look like this:

I. Including consideration for local planning constrains, listing, building condition, funding, future penalties (current and future regulatory context, such as social landlord’s requirements to meet EPC band B).

II. Selected methodology should be supplemented with relevant guides such as Historic Environment Scotland (HES) guide to retrofit of traditional buildings where appropriate.

III. The assessment and evaluation tools are valuable aids in informing what options may be available and the assessor to be trained in their use and the interpretation of their results.

IV. Governed by the Scottish Government (SG) with independent verification and with the aim of protecting public interest. This could be within the powers of the Building (Scotland) Act, the Energy Act 2023 or others, and is yet to be determined.

Text for graphic below:

HEETSA assessment decision making route

Stage 1 Retrofit Assessment

Identify building type, location and context and customer priorities through on-site assessment and interviewI

Stage 2 Retrofit Assessment

Select appropriate methodology such as PAS2035, EnerPHit, AECB, etc.

Select appropriate performance verification and option evaluation tools such as PHPP, RdSAP, HEM, WUFI

Governed by SG^IV

Retrofit Plan

Stage 3 Retrofit Assessment

Validation of results, follow up with homeowner/ tenant

Emerging technologies such as Building Information Modelling (BIM) and artificial intelligence (AI) offer promising solutions in the future. These innovations could enhance existing methodologies by automating comparisons, incorporating lifecycle costs, and providing actionable, context-specific recommendations, leading to Building Passports/ Logbooks enabling better management and maintenance of the building stock.

Consumer protection and retrofit literacy

Public confidence in retrofitting remains low due to negative press and prior experience of poor installations. Rebuilding trust requires showcasing successful case studies, promoting skilled professionals, and ensuring high-quality outcomes.

The plethora of current assessments, from quality assured assessments and regulated methods to marketing tools and lack of adequate customer and assessor knowledge needed to make informed decisions, together undermine public trust. The customer journey can be enhanced by the following approaches:

• customer centred approaches prioritising long term health outcomes,
• impartial advice,
• quality of assessment and advice delivered by local, skilled assessors,
• tailored retrofit advice

Summary

The current assessment market for retrofit projects has significant gaps in evaluating the technical suitability of clean heating and energy efficiency measures. This is most evident around evaluating heating options and agnostic, sensitive energy efficiency improvements to historic and traditional buildings. Individual assessment methodologies lack granularity, ability for comparative evaluation of options, further impaired by knowledge gaps and public scepticism. The focus of HEETSA to address limitations identified in this Objective should therefore be:

• Ability to compare options while considering human behaviour, lifecycle impact and mandating post-occupancy evaluation
• Address current data gaps precluding adequate assessment of communal heating and alignment with Local Heat and Energy Efficiency Strategies (LHEES) and Local Development Plans
• Provide means of independent verification of expertise, training and public awareness addressing knowledge gaps limiting successful customer journey
• Develop a decision-making tool allowing for integration and evaluation of existing methodologies best suited to deliver intended long-term retrofit outcomes.

This approach will require sector-wide framework that enhances training, incorporates lifecycle analyses, relevant data collection and prioritizes occupiers ensuring long term benefits through post-occupancy evaluations and adequate customer engagement. The process needs to be governed and regulated by the Scottish Government and align with the Building (Scotland) Act, the Energy Act 2023 and any other relevant current and future legislation, (including but not limited to circular economy, bioeconomy and just transition strategies).