Alternative energy sources vs retrofitting: What comes first?

Are heat pumps and solar power the answer to the energy crisis and our reliance on fossil fuels, or should we retrofit our existing properties first to conserve energy before spending money on alternative energy sources?

In 2020, the UK government announced that gas boilers will be banned in all new homes by 2025. The Scottish government has gone one step further, proposing that there will be no gas boilers in new homes by April 2024. The phasing out of the use of gas with increased reliance on electricity to heat and power our properties seems the obvious choice, particularly as the carbon intensity involved in electricity production is falling, and is targeting complete decarbonisation by 2035.

With various forms of financial incentives available, commercial and residential property owners are in many cases opting to install solar panels and air and ground source heat pumps, to meet energy performance targets and reduced gas use.

Heat pumps, in particular air source heat pumps, have increased in popularity recently, and are now common place in new build residential developments. The technology has advanced so much that heat pumps can now produce high water temperatures and are no longer just used for underfloor heating where lower water temperatures are required. Heat pumps also have no on-site emissions and can provide cooling in addition to heating.

Even though energy incentives are available and the benefits of installing a heat pump are clear, the cost of installing a heat pump is high, and it can take between 10 - 20 years to recoup the original investment. Also as the UK has some of the highest electricity prices in Europe, and some of the lowest prices for gas, this makes it hard to get the numbers to work where customers are looking to replace an existing gas system. If electricity is three times the cost of gas, then the heat pump needs to have an efficiency close to 250 to 300 per cent to be cost comparative with a gas system.

The high cost of electricity might be one of the reasons why the UK installed the lowest number of heat pumps per residential household across Europe in 2021, and why solar installations, which require no electricity to run, are predicted to see significant growth over the next two decades.

The earth receives enough energy from the sun every day to power the planet for 27 years. Solar alone has the potential to reduce global carbon emissions by up to 25% by 2050 and it’s a technology where the efficiency has significantly improved. The power capacity of a solar panel has risen by a third in the past five years and work is underway on new tech which could boost that by a further 50%.

Solar works well for properties with space to install the panels, such as large industrial units and properties that have a southerly aspect with space to install the panels. Solar’s impact is more limited where panels can not efficiently be installed, such as in residential flats, shaded properties or properties that don’t have access to southerly facing, large open areas sufficient to gather solar energy.

Solar users need to also consider the cost and implications of battery energy storage which is increasingly needed given the UK’s sunlight is generally not consistent enough to be a property’s only source of electrical power. Issues also exist with supply bottlenecks from China, where 95% of solar panels are produced, with recent price rises of 20% as well as delivery delays.

The use of renewable energy sources do contribute significantly to the meeting of ESG goals, conforming with the MEES legislation and meeting the required EPC ratings. However, when advising commercial and residential property owners on the most cost effective routes to increase a building’s energy performance, EPMaxx sees the most impactful gains can often be met by retrofitting an existing property to conserve the energy used before alternative power sources are introduced.

This means looking at existing levels of insulation, lighting types, heating controls, air movement, windows, doors and alternative sources of internal heating and hot water. A combination of these retrofitting works managed in the correct sequence is often a more certain, cost effective and lower risk solution to increasing a building’s energy performance than installing alternative power sources.

The UK’s heat pump and solar installations will continue to grow as we move towards net zero. However careful consideration needs to be given to retrofitting and the analysis of all energy-related technologies as well as installing renewable energy sources. Most importantly, a fabric first approach should be taken where commercial and residential buildings initially seek to reduce their power demand prior to installing a new energy source.

If you require retrofitting advice, please get in touch.