Fueling social housing

A growing range of sustainable energy options is now being explored by UK housing providers looking to manage mounting overheads, reduce carbon footprint, provide a higher quality of home for their residents, and alleviate problems of fuel poverty. Rising energy costs and increasing pressure for better sustainability from Government and local authorities have played a significant role in persuading social housing providers to explore renewable energy and energy reduction.

Renewables can play a key role in delivering high quality, sustainable homes for residents. It also helps to reduce heating and energy bills, vitally important for many social housing residents that may already be on low incomes.

Fuelling social housing banner

Ground Source Heat Pumps

One of the fastest growing renewables for residential properties, ground source heat offers substantial savings for residents as well as dramatic reductions in carbon footprint. While potential savings vary depending on the EPC rating of a home and location, heat pumps can provide between 30% and 50% savings for residents and often have a 35-year service life.

Heat pumps can provide between 30% and 50% savings for residents and often have a 35-year service life.

As with many renewable technologies, economies of scale mean that heat pumps are well suited to use across multiple homes. The nature of the technology also reduces the need for individual metering, helping to reduce the workload of housing officers. It also requires relatively little maintenance, but often isn’t suited to retrofit projects given the invasive nature of bore holing.

Air Source Heat Pumps

Air Source Heat Pumps

Effectively air conditioning in reverse, air source heat pumps convert latent heat from the surrounding air into useful energy. They offer some of the same benefits as ground source alongside much more convenient installation. However, they can be noisy, consume more secondary electricity and are significantly less efficient than ground source heat.

Biomass

Biomass lends itself well to social housing developments where a central biomass boiler can be used to provide heat for a large number of homes. They generally offer a similar level of savings for residents as ground source heat, with the added benefit of lower installation costs. However, they require more maintenance and frequent supplies of wood fuel. Air quality considerations from certain local authorities can also be challenging.

Solar Power Generation

Solar

Another technology that lends itself well to larger housing developments, solar PV has seen substantial reductions in purchase costs over the last 10 years as well as steadily increasing yields. Widely adopted by housing associations as a method of ‘behind-the-meter’ on-site generation, solar provides clean, low-cost electricity that has the potential to significantly reduce resident’s energy bills.

Rapid growth and falling costs associated with battery storage technology creates a further opportunity to maximise the impact of a solar PV installation by allowing energy to be used on-site rather spilling to grid. This allows energy to be shared more efficiently between multiple homes rather than being sold back to the grid at a reduced rate, only to be potentially bought back at three times the price the following day.


Other technologies

The rapid march of renewables means that there is a growing range of solutions available to social housing providers. Given the ban on new gas-fired heating from 2025, the Royal Institute of British Architects have been advising their members to develop alternative heating solutions. Whilst this includes heat pumps and biomass, it also includes transitioning to electric heating, including infrared panel radiators and underfloor heating loops.

On-site generation, avoiding pass-through charges through use of grid power, provides an important boost to the economics of electrified heating which otherwise is significantly more expensive than gas. Following the Government lifting a moratorium on new onshore wind developments in March 2020, wind power is set to re-emerge to supplement solar as a potential on-site renewable generation option for some.

Recouping costs

A challenge faced by many housing providers is that outside of communal areas and their own operations, they have little control over their resident’s energy use. Similarly, it can be difficult to see a direct return on investment for many on-site generation and heating solutions, given that much of the cost savings benefit residents rather than landlords.

However, research shows that more energy efficient housing stock provides direct financial benefit for housing associations. Specifically, it helps to address two of their most pressing concerns: rent arrears and void properties.

A study by Sustainable Homes found that on average, homes with the worst EPC ratings (E or F) were void for an average of 76 and 80.7 days over a one-year period, representing a significant loss in rental income for the housing provider. For homes with the best ratings (A or B), void periods were much shorter at 31.2 and 48.8 days, resulting in around 40% less rental income being lost.

Better EPC ratings were also reflected in lower amounts of rent arrears. The same study found that on average, the worst rated homes tended to be in rent arrears for around two weeks more than those with higher ratings. Those with an A rating were generally in arrears for a week less. It also found a marked drop off in the extent of arrears for homes with an SAP rating of 80 or above (EPC band A or B).

Introducing new renewable generation and energy reduction solutions can be complex, particularly given the importance of maintaining a high quality of home and stable service charges for residents. Social housing providers will have a key role to play in the UK’s wider net-zero objectives, with renewable energy providing an important tool for contributing towards this. However, finding the mix of technologies that best suits the needs of specific housing stock is a complex process.


Further reading