As many councils are fighting potential bankruptcy, the Green Funding Institute (GFI) has opened a new avenue for them to provide much-needed investment that can be used to fund retrofit projects within our homes.  

In a bid to accelerate the transition to a cleaner and more sustainable future, the GFI has released a ‘Local Climate Bonds Toolkit’ to inform councils on how to find economically viable methods towards funding green initiatives in their areas. The initiative was confirmed in November, aimed at raising investment, supporting earlier efforts from the government back in 2021, which totalled a staggering £16 billion worth of investment for green technology projects. This funding presents a golden opportunity for UK councils to provide carbon reduction strategies in their social housing portfolios, whilst also prompting private rentals to become engaged in the transition. 

The funds are to be used to prompt investment in green technology for local projects. Environmentally friendly§ refurbishments known as retrofit projects are included in the eligible criteria, as they are paramount in reducing carbon emissions within our homes. As most businesses and UK councils are struggling to balance the books, the opportunity to reduce costs associated with housing portfolios can now be seriously considered, whilst making substantial progress in sustainability agendas and investing in green technology. There are a variety of avenues that can be used to implement these upgrades to homes, such as renewable energy infrastructure, insulative materials, and home monitoring systems. Councils are posed with the opportunity to significantly contribute to the nation's carbon reduction goals while simultaneously reaping economic benefits of slashing maintenance costs in their own homes. 

The role of housing in UK climate commitments 

The United Kingdom has been at the forefront of global efforts to combat climate change. With the signing of the Paris Agreement in 2016, the UK committed to reducing greenhouse gas emissions by at least 80% by 2050. Despite this commitment, many independent reports suggest that the UK will miss its first reduction target of 65% by 2030. The nation therefore requires significant investment in renewable energy, energy efficiency, and sustainable technologies. It is essential that we recognise the crucial role played by the residential sector in speeding up this process, as homes make up anywhere from 17-35% of emissions within the UK. Now the GFI has proven that £3 billion in green funding can be made available to councils, we should give serious consideration to prioritise the decarbonisation of our homes. 

The efforts in decarbonising social homes alone has proven to be a valuable asset in driving down emissions across the nation. It is notable that the Social Housing Decarbonisation Fund (SHDC) has been given its most recent cash injection of £180 million as housing is seen as a sector that will likely prioritise retrofitting properties due the associated benefits surrounding long-term cost reductions from doing so. The long-lasting stickiness of inflation has meant that councils and housing providers are both looking to reduce costs in their homes as quickly as possible. 

The Potential for Housing in Local Climate Bonds 

Councils such as those in Warrington, West Berkshire, Islington and Camden engaged in the GFI pilot scheme to encourage green investment in their areas. They all found that millions of pounds were able to be created to fund these projects, which included the investment of retrofit projects. This has demonstrated the attractiveness of investing in sustainable housing, which will allow us to cut back on maintenance costs whilst reducing carbon emissions generated from within our homes.  

The opportunity is now open to all UK councils and will be intended to support a wide range of retrofit refurbishments, including renewable energy systems, insulative materials, fittings, boilers and monitoring systems, that are used to predict when maintenance will be required in homes, and indicate the most appropriate refurbishments for the property based on conditions such as temperature, humidity and CO2 monitoring. 

The funding created by the toolkit can be used by councils implementing Local Climate Bonds for both social homes and private housing providers. This allows housing associations to apply for the required funding based on the size of portfolio, desired refurbishments and economic capabilities. These bonds can be used to purchase retrofit materials or technology to make our homes more sustainable, efficient and cost-effective in the long term. To make the most effective use of this opportunity, councils must assess the best course of action for homes in their areas. By implementing their own Local Climate Bonds, councils can provide investors with detailed benefits on how their money will be used. 

The Importance of Funding Retrofit Projects in Our Homes 

Recent financial pressure has created a backlog of maintenance work within housing, leaving many properties currently facing inadequate living conditions, including prolonged damp, mould and condensation. This stresses the need to implement an effective strategy to reduce health risks, structural damage and maintenance in our homes. The clear and detailed plan to create funding from the GFI has allowed us to take proactive action to kickstart and upscale the efficiency of our properties. However, not all measures are as costly as installing heat pumps, for example – prompting us to consider using predictive solutions such as smart monitoring systems to track the conditions inside each of their homes, providing us with the correct data required to make informed decisions about which refurbishments are required for our homes. 

By doing this, we can be certain to drastically reduce maintenance costs associated to our properties, whilst reducing costs, carbon emissions and the potential for health risks in our residents. According to Inside Housing, over £2.6 billion was spent in maintenance work in social homes between 2021-22. As prices remain high, reducing this number will certainly be a priority for housing providers. With the potential to raise £3 billion in funding, councils have a once-in-a-lifetime opportunity to reduce outdated homes, and improve the sustainability of our homes. By creating this funding, the sector will quickly reduce its carbon footprint, minimise maintenance, and improve the quality of both properties and residential wellbeing.  

Getting the best out of your Local Carbon Bond 

Formulating a strong plan for your Local Carbon Bond won’t be a straightforward task, requiring careful planning and high levels of detail to make sure you will get those absolute most out of funding these projects in your area. 

1. Identify goals and priorities:  

Before opening funding, councils should make a detailed criteria of what the funding should be used for, what the conditions for applying should be, and request a detailed plan of each application before submitting. 

2. Set a budget: 

You will already have your own budget in mind, which means that you will need to use the GFI’s Local Climate Bonds Toolkit to identify your own financial capabilities, dependent on your current spending commitments, priorities and funding. 

2. Create informational content to send out to providers: 

Whether you are aiming to engage private or social housing providers, you should be educating your community about the potential benefits of taking out these bonds. This way, you can provide information about what methods will work best in your area, and what conditions or limits there may be surrounding implementing your Local Carbon Bonds. This will speed up applications and provide clarity to your targeted providers. 

3. Encourage proactive measures: 

Each property in your area will vary in which refurbishment options will be best with the bonds you’ll provide, so you want to be sure your money is used in the best possible way. Encouraging housing providers to adopt smart monitoring systems that monitor temperature, energy usage, CO2 and humidity will allow them to make the right predictions when implementing their retrofit projects. 

4. Monitor and evaluate:  

Once funding begins, you must effectively manage and monitor the progress of funding. Regular monitoring and evaluation help ensure that the projects are on track and are delivering the expected outcomes. 

The importance of using monitoring systems in our homes 

As we know, many aspects of retrofitting properties can be expensive, especially when used in the incorrect ways. This can mean huge sums of money going to waste unnecessarily if properties remain inefficient, despite the large sums of cash thrown at them. Luckily, IoT monitoring systems allows our homes to tell us when they’re not functioning at their best, and makes finding these answers relatively inexpensive and straightforward. 

The growth of IoT monitoring systems within our homes has come as providers look for quick and reliable solutions to pin point inefficiencies within properties which aren’t easy to detect. Finding these problems is made further difficult as residential privacy must be respected, which means you will need to find a practical solution to monitor these conditions remotely. These systems are extremely effective in ticking these boxes as many IoT sensors work without hard wiring, and are capable of lasting up to 5 years one a single battery by using minimal amounts of power in transmitting readings. 

By utilising the accuracy of data embedded in these systems, temperature monitoring, energy monitoring, humidity monitoring and CO2 monitoring is made simple, as housing providers gain a 360-degree view of their homes, individually. The frequency in which they transmit readings gives us accurate data to make data-led decisions on which elements of our homes require modern refurbishments. 

IoT Monitoring Systems: A Case Study  

Examples of successful retrofit projects can provide valuable insights into the benefits of taking action and getting your business ahead of potential competition. Case studies are the best option when it comes to proving the potential of strategies, and which equipment you should use to make the correct decision. One example is Smartline, who worked in collaboration with Cornwall Council and Exeter University to explore the potential wide-scale benefits of using IoT monitoring solutions in identifying weaknesses within social homes around the south-west coast of England.  

The project ran across 274 council homes to find the best approach in reducing damaging conditions. Upon completion of the project, the results showed that most of these homes were susceptible to mould growth, due to a combination of cold temperatures and damp conditions in the properties. Based on this data, the correct strategy was made on how best to allocate funding to improve these homes.  

Retrofitting is a process that will require a different approach based on a variety of factors applicable to those homes in question. From age to building materials, local climate or even how the home was built affects what retrofitting method is appropriate. Monitoring levels within homes such as temperature, CO2 or humidity over a substantial period will provide accurate insights on the best approach to take. Using IoT systems provided this housing provider with a data-led solution in understanding the health of their homes. 

Now you know how to implement your own Local Carbon Bonds, and best practice to make sure this money makes a real difference in reducing your outgoings, improving the environment, and making properties much more efficient in the long run.  

Want to implement effective home monitoring solutions? The ENV sensor provides a comprehensive home monitoring solution, sensing temperature, humidity and CO2 levels in one device. Book a demo today, or enquire about the results it’s already delivered for housing portfolios.