Not net zero: Reframing the case for energy efficiency

We need to shift the retrofit conversation away from net zero. That was the premise of Baringa’s eighth Green Buildings and Transport Forum in July 2025.  

Why? 

Because so much discussion centres on the cost and effort of domestic decarbonisation. But the fact is – it’s a substantial economic opportunity to drive growth and add value to GB PLC. And that’s a powerful message we need to leverage. 

Our roundtable focused on that value and how to unlock it, including: 

• Quantifying the economic opportunity 
• Tackling reticence from private finance 
• Enabling a whole systems approach, along with models currently seeing success 
• Generating demand to drive the business case for investment 

Warm homes will unlock £140bn in benefits 

Sharon Johnson, CEO of AgilityEco, presented the findings of a new report with Baringa. The research found that improving the energy efficiency of residential housing stock to EPC C or above (warm homes) will deliver £140bn to the GB economy by 2040, with £49bn of that coming in the next five years. 

The benefits come in areas like: 

• Higher GDP and tax revenue – For every £1.00 of government investment in warm homes, GDP increases by £3.20 and VAT rises by £3.00. 
• Job creation – The warm homes transition is estimated to create 350,000 jobs. 
• Reduced healthcare costs – Improved energy efficiency would potentially save the NHS £600m annually.  
• Avoided costs of network infrastructure upgrades – Improving energy efficiency in 13m homes could lower peak demand on the grid by up to 8%, reducing required infrastructure spend by £4bn over the next five years. 

This means warm homes are a great place to invest – and will drive growth locally and nationally. 

Tackling reticence to invest

It will cost £65bn to raise Great Britain’s housing stock to EPC C. Our report, commissioned by AgilityEco found that investing approximately £16bn of government funding in home energy efficiency has the potential to unlock an additional £49bn of private finance to reach the required amount. 

We had a vibrant discussion about how to create the conditions for attracting that private finance. 

Our debate clearly showed that private finance has appetite to invest. Negotiations often come down to cost of money, ownership, and responsibilities – but ‘where there’s a will, there’s a way.’ An investment fund delegate emphasised that ‘people’s ears prick up’ if low-carbon retrofit is defined as a commercial exercise – but a long-term view of commercialisation is crucial.  

Therefore, the ecosystem needs a way to manage that private investment isn’t a given. The risk of sudden decisions or changes was a recurring theme in acquisition discussions. The government must give investors confidence in a stable, predictable policy environment. To deliver this, AgilityEco believes the government needs to provide a 10-year runway and is advocating for a commitment to funding existing domestic retrofit schemes until at least 2035.  

We need a whole systems approach

Where there’s a will, there’s a way – and that way involves a whole systems approach. 

Delegates agreed that it’s challenging for private finance to engage with a piecemeal approach because it takes longer, is more expensive, and is more vulnerable to policy changes. With a whole systems approach, investment in building upgrades leads to ratings increases and associated asset value lifts. When you combine higher asset exit values with reduced operating costs, you have a compelling investment case.  

So how can the ecosystem drive forward this whole systems approach? Delegates shared models seeing success: 

1. Local authorities: a trustworthy enabler 

Dale Hoyland, Retrofit Team Leader at Oxfordshire County Council, explained their funded market/private sector collaboration. They’re running a successful retrofit pilot under DESNZ’s Alternative Energy Markets Programme in partnership with SMS, My Utility Genius, Eliq, and others.  

Through the council’s Energy Saver App for residents, they used to smart meter data to model a personalised solar PV and battery storage solution with quantified savings potential. Householders could then get the low-carbon tech ‘as a service’ through a subscription model. The fixed monthly charge removed the upfront cost barrier and made it easy to see how the system paid for itself. The solar panels are gifted, but the consortium retains ownership of the battery and inverter. The householder committed to optimisation being done for them, so the consortium can maximise flexibility benefits.  

2. DNOs: a coordinator and data provider 

Baringa’s Eleanor Taylor gave an overview of an innovation project with SSEN and SMS looking at how DNOs can help overcome barriers to home upgrades while tackling peak demand constraints. They created a proof of concept data service to identify areas with grid capacity issues that are suitable for combined heat pumps and energy efficiency. The hypothesis was that the savings from deferred grid reinforcement could be used to incentivise heat pump uptake – in the form of a customer incentive payment - alongside government grants. 

The first project phase identified £35m in value from the concept. The next phase will be subject to further funding but aims to look at trialling the impact of this data-led approach, and testing the value of the incentive.  

It’s not just about attracting private finance, it’s also about generating demand 

The investment case for both government and private finance is predicated on consumer demand for low-carbon tech. Even in the fully funded market, consumer uptake is a challenge, with completely subsidised options and 0% loans struggling to cut through. So when we talk about moving the discussion beyond net zero, it extends to the consumer approach, too. 

How can we reframe the customer proposition?  

• What is your highest priority for your home? Climate tech company Tallarna uses a blended funding approach in the social housing space. To drive resident engagement, they sent postcards asking this question about priorities. The options – from having a warmer home to getting rid of mould – came with a tech selection pre-approved by the landlord and funder. Residents therefore had choice aligned with their needs, in a way that was financeable.  
• What transformation do you want to see in your community? West Midlands Combined Authority is taking a place-based approach. At a neighbourhood level, homes are retrofitted with insulation and green heating on a street-by-street basis alongside other low-carbon infrastructure, such as on-street EV charging points. Neighbourhoods are co-designed with the community so they focus on local needs. As a result, residents see it in terms of improvements to their lives and communities. 
• Do you realise how easy it is? ‘It’s a hassle’ is often cited as a barrier to uptake. Oxfordshire County Council has shown how simplifying the customer journey removes this barrier. Its free Energy Saver App uses smart meter data and AI to give residents personalised, unbiased tips for reducing energy use and switching tariffs. This created a user base of engaged residents opted in to receive communication about energy efficiency. When the council piloted the subscription solar PV and battery storage program discussed above, they could offer a seamless and personalised customer journey within the app. The clarity on savings and the ‘one-click’ way to get started was key to the strong interest, and the successful installs are generating interest among nearby residents. 

Different thinking, different results 

It’s not enough to keep pushing the same net zero and decarbonisation messages. £140bn in economic benefit is a huge prize, and we need to harness that. After all, there are severe growth and societal risks to inaction – 16.3m cold homes are a national liability. With public/private sector collaboration, whole systems thinking, and creative community engagement, we can drive change that leads to healthier lives and a more prosperous economy. 

Get in touch with Rebecca Teasdale to be involved in our Green Buildings and Transport Forum, and look out for updates in Energy Insights, our Energy and Natural Resources newsletter, for future events.