Home2025: Construction and retrofit

Contributions:

Final energy consumption of buildings is one of the main drivers of climate change. Some of the hardest buildings to tackle are homes, which contribute the largest share of building energy use (74%). In cities, where most of the world’s population lives, buildings are even more important. Around 75% of New York and London’s emissions come from offices, homes and hospitals. So we must rethink how buildings are built – and how they are retrofit.

IMPACTS OF BUILDINGS

While day-to-day behavior in our homes is the first and most obvious way to control energy consumption and carbon emissions, as we noted in the Home2025 introduction, voluntary behaviour change may be limited to a select few customers, unless price signals are much stronger.

That behaviour might cover our use of appliances, lighting and home electronics, which we purchase every few months or years. In India, where ownership of electronics is expected to grow dramatically, purchasing behavior will become critical. We explore this in the Home Electronics section of Home2025.

But in this section, we focus on retrofits and the broader construction industry. This includes two big drivers of energy use: the literal ‘fit-out’ of the kitchen or home in general so it can be habitable, and the ‘building envelope’, which separates the inside and outside of a building and typically includes walls, floors, roofs and doors. Because until we retrofit existing buildings and construct new buildings to the most efficient or net carbon positive standards, we risk not meeting ambitious climate change targets.

However, as ClimateWorks’ contribution shows, we cannot easily integrate the various levels of energy-use impact into different construction and retrofit strategies, because the design of a building impacts our behavior and vice versa. For example if we open a window when it’s hot outside, we may tolerate higher temperatures inside. But while complex, these links also present new opportunities for regionally specific strategies.

WIDER SYSTEM IMPACTS

Homes that meet energy use targets in line with emissions reduction targets are not only better for the environment, they also encourage more efficient use of resource – such as water and food – and better waste management, which will lead to improved circulation, safer air quality and healthier citizens.

Improving use of materials and resources in the home will also drive a transformation in the wider economy. In the EU, a new policy direction for green buildings acknowledges this explicitly with six objectives for new buildings, including their role in resource-efficient material life cycles.

And finally, with an estimated 100 million people in industrialized economies unable to heat their homes in winter, efficient homes can also combat fuel poverty.

It may not be too far in the future when new homes are much less expensive and much more self-sufficient than those of the past. Already, homes such as those made by Sustainer in the Netherlands, are fully off-grid with costs around EUR 38,000 (~US$41,000)

Increasing population and rapid urbanization require millions of new homes to be built globally in the coming decade. While US stills remains one of the largest markets for new homes, new emerging markets, mainly in Sub-Saharan Africa and Asia, are surpassing its growth. This provides an opportunity to construct buildings from a green, zero carbon or passive house standard from the outset. If considered early in design and construction, improved energy efficiency can save 15% in household costs.

New homes needed by 2025:

  • 270 million in China and India
  • 27.5 million in Brazil and Mexico
  • 20 million new homes the US and Nigeria (1.5 million homes a year)

Home2025 highlights some of the business and financial models that allow us to more rapidly retrofit our homes, and demonstrates the value from building high performance homes from the outset. But contributions from industry experts and voices also point to a clear role for standards and policies that incentivize retrofits and new construction to happen faster and on a much bigger scale.

New technologies will certainly be required for such a transition. Technologies that are not only better for the environment but also able to overcome barriers, such as high up-front costs or the need to relocate, are most likely to be adopted rapidly. For example, the Building Technologies Accelerator contribution demonstrates how a ‘second skin’ can be used on the outside of older buildings to make a building envelope retrofit possible without requiring tenants to relocate. We know there are millions of service providers with solutions like this – please tell us about yours.

As it gets more exposure to these new technologies, the building sector is realizing they are no longer too costly. The Rocky Mountain Institute shows that in the US, where retrofitting buildings will be key to decarbonization, the $150 billion market opportunity for energy performance improvements in US homes is not yet being seized. Green homes also sell at an average of 3.46% more than their non-green counterparts in the US, according to research by the Institute of Market Transformation. The Institute also found something that will please banks: in a sample of 71,000 homes, mortgage default risk was 32% lower in energy star rated homes.

Image: Unlocking the future of US homes through energy+ upgrades, courtesy of RMI

Fully calculating the value of retrofitting buildings on the other hand, is more complex. Demonstration projects are a good first step – they align policy goals with action on the ground in a small number of homes to analyze the best way to scale up. Just one example from The Société d’Habitation du Québec shows that in 40 social and community housing units in the Cité Verte eco-neighbourhood in Quebec City, annual consumption of 25 kWh/m2 is possible. That is less than half the 60 kWh/m2 average.

But if we hope to see big impacts from the retrofit sector we must accelerate the pace. In Europe, where like the US, retrofit is a key strategy for meeting energy efficiency goals, the Buildings Performance Institute Europe shows purely voluntary measures are not sufficient for the required level of building renovations, despite attractive financial support available to consumers – as well as the fact retrofits help with the policy goal of overcoming fuel poverty. But the Netherlands boasts a faster pace. Its EnergieSprong program will retrofit 111,000 rental houses for zero net energy by 2020 with a 30-year payback, and costs are covered by renters instead of – and lower than – their energy bills.

Scaling the retrofit industry will be different in every country, but sharing learning across these markets is crucial. In India, where the growth in electronics is the highest, our expert contributions show the need for new skills plus energy efficiency standardization in new buildings to ensure the most efficient devices are purchased and installed in homes. But as our blogs from Ebico in the UK or RMI in the US prove, financial incentives are not always sufficient to encourage such sectoral changes. A combination of inspiration and legislation is needed to help homeowners move faster to maximize the home-level opportunities that will make our economies more productive.

We still have a long way to go in the construction and retrofit industry. Even where policies require all new buildings to be ‘nearly-zero energy’ (nZEB), such as in Europe, the scale of the challenge is big. Just eight years before the deadline last year (2015), the percentage of new builds that were nZEB compliant varied dramatically from 0% to 30%. While many markets are leading the way – as of 2014, France is building 100% nZEB buildings and in Belgium over 50% – others remain below 10%. The Netherlands and France are exceptions with a pace of retrofit at 10% a year, but most countries are rarely above 1.5% in Europe. However, this may point to a lack of consistent data.

Globally we must build hundreds of millions of new homes with the new low carbon technologies, new construction techniques, and new ways to monitor and enforce policy and standards. This is the only way to bring the billions who will live in these homes healthier, more efficient, more comfortable lives. As examples in the Netherlands prove, millions of people in fuel poverty or inefficient homes can benefit from new business models for retrofits at a scale of 10% or more a year. But sharing and developing this know-how needs unprecedented collaboration, as well as rapidly-scalable business models and standards from industry and government.

We are looking for your examples and business models of rapid retrofit and scalable new, efficient construction. Contact us.

Home2025

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