Cities, Climate and Inequalities – Achieving deep-energy retrofits for households in energy poverty

Laura Tozer (Assistant Professor, University of Toronto Scarborough), Hannah MacRae (Research Assistant, University of Toronto Scarborough), Emily Smit (Researcher, University of Toronto)

Introduction

Deep energy retrofits for all residential buildings are crucial to meeting net zero greenhouse gas (GHG) emissions goals. However, the implementation of these retrofits has proven to be a particularly challenging climate solution. A multitude of factors need to come together to successfully implement retrofit projects, such as financial incentives, governmental and institutional collaboration, adequate technical equipment, as well as social learning and support (Mata et al., 2021). Meanwhile, deep energy retrofits could be particularly significant for those experiencing energy poverty. Energy poverty is associated with various negative social and health impacts, and energy-poor households are often entangled in other socio-economic adversities that restrict their abilities to mitigate and/or adapt to a changing climate. 

While we know of numerous barriers that impede the effective implementation of deep energy retrofits, there remains a lack of research that summarizes the barriers and enablers of retrofit implementation that are specific to households vulnerable to energy poverty. To help fill this gap, this systematic review answers the question: Which factors have been identified as influencing the achievement of low-carbon energy retrofits for households vulnerable to energy poverty? 

State of the scientific literature on retrofits and energy poverty

There are many studies of various aspects of (deep) energy retrofits in the literature. Energy retrofits help accomplish GHG emissions reduction goals because they reduce energy demand through measures such as adding insulation, sealing leaks and replacing windows and doors, or by fuel switching away from fossil fuel-powered heating and cooling. Deep energy retrofits are major building renovations that reduce energy use intensity by at least 50 percent relative to a pre-renovation baseline and provide associated improvements in the quality and comfort of the indoor environment (Zhivov et al., 2015). There is a substantial amount of literature on deep energy retrofits covering, for example, technological aspects, cost-benefit analyses and social considerations. Deep retrofits sometimes reduce post-retrofit energy expenditures, which can allow households to adequately meet their energy needs within their financial means (Harrison & Popke, 2011; Hernández & Bird, 2010). 

Energy poverty (also referred to as fuel poverty or energy insecurity) is difficult to define due to different geographical contexts (Liu et al., 2019) and various objective and subjective indicators (Martini, 2021); however, it is broadly understood as the lack of adequate energy services to provide basic needs (Harrison & Popke, 2011; Reames, 2016). Various external factors can influence households’ vulnerability to energy poverty, including geographical differences in climate and the state of building infrastructure, which determine the difficulty of maintaining thermal comfort affordably; social and political factors that impact costs of living and peoples’ ability to earn a living wage; and levels of inequality and absolute poverty (Galvin, 2019; Middlemiss, 2022). Energy poverty is linked to physical and mental health issues such as cardiovascular disease, respiratory conditions, anxiety and depression, increased risk of conditions such as influenza, pneumonia, asthma and arthritis as well as accidents at home (Marmot Review Team, 2011). Furthermore, households experiencing energy poverty tend to sacrifice other needs and pursuits in order to pay for their energy supply, provoking other social issues related to poverty, such as a decreased drive to pursue education or professional advancement due to the costs associated with these (Xu & Chen, 2019).

Although some of  the drivers of energy poverty are related to systemic issues such as poverty and inequality, carefully managed deep energy retrofits can address some of the primary drivers of energy poverty by improving energy efficiency or building envelope leakiness (Martini, 2021; Middlemiss, 2022). Deep energy retrofits often reduce post-retrofit energy costs, allowing households to adequately meet energy needs within their financial means (Harrison & Popke, 2011; Hernández & Bird, 2010) and improving household resilience to increases in external or utility-set energy costs (Hoicka & Das, 2021). Beyond financial benefits, deep energy retrofits can contribute to improvements in overall quality of life, as indoor environmental quality and comfort are improved and better managed (Harrison & Popke, 2011; Hernández & Bird, 2010). However, if not properly managed, deep energy retrofits can worsen energy poverty. Housing affordability and security are impacted by these retrofits as they can increase housing costs for tenants or lead to instances of “renoviction” in rental properties, where value-added renovations cause the displacement of tenants through forced evictions or increases in rent (Bouzarovski et al., 2018).

Original research case, method and data

A systematic literature review method was used to assess the state of knowledge on the barriers to energy efficiency retrofits in the context of households vulnerable to energy poverty. The first step of the systematic review involved using a keyword string to search the Web of Science and Scopus databases and retrieve relevant articles. The keyword string included multiple synonyms related to barriers or enablers, energy efficiency or decarbonization, retrofit or renovation, building typologies, and equity or energy poverty. The searches were conducted using the default search settings of each database, with no restrictions on the date of publication. A total of 631 articles published between 2004 and 2021 were returned from the keyword searches, and all were imported into the web-based systematic review program Covidence.

At this stage, duplicate articles were removed and the remaining articles underwent two stages of screening by the authors, to ensure they were relevant to the research topic and accessible to the author (i.e., available online and published in English). At the end of the screening processes, 34 papers remained, to which three articles were added based on the author’ discretion, leading to a total of 37 articles included in the literature review analysis.

Information was then extracted from each of these 37 articles relating to the building typologies, demographics and market segments of focus, the type of retrofits described, the methodological approaches, the geographical coverage of the studies, and the barriers and enablers to retrofits identified. This information was entered into a qualitative analysis table and analyzed with a deductive approach using the categories of the summary table found in Mata et al. (2021) and augmented with new categories relevant to the points of analysis in this research using an inductive approach. The completed table was then analyzed to identify the most important themes in the factors influencing the achievement of energy retrofits in households vulnerable to energy poverty.

Results

Most of the articles found in this systematic review focused on case studies in the United Kingdom, and only two articles featured case studies outside Europe and North America. The energy efficiency retrofit activities described insulation (wall, attic/loft and/or ceiling), window and door replacement, air-sealing, light fixture replacement, improved or decarbonized heating and cooling, and renewable energy generation. While some articles described only one or two of these activities, most described a combination of multiple retrofit activities. Specific factors that enable and constrain retrofits for households vulnerable to energy poverty were identified and grouped under the following themes: financial, policy and organizational, technical, information, attitudes and values, health, safety and comfort, and trust and communication.

Retrofit costs are a key consideration for both property owners and tenants. For property owners, the possibility of reduced maintenance costs (Liu, 2018; Peel et al., 2020; Prati et al., 2020), increased property value (Liu, 2018; Prati et al., 2020), and reduced vacancy and/or rent arrears (Liu, 2018; Peel et al., 2020) are motivating factors to perform energy retrofits. For tenants, the opportunity to save on energy costs (Liu, 2018; Prati et al., 2020; Streimikiene & Balezentis, 2020) is a strong motivating factor to support retrofit programs, though the possibility that these programs will result in increased rents is a serious concern. High upfront investments are a barrier to implementing retrofits. For this reason, government funding and subsidies that support retrofit activities are particularly significant in encouraging retrofit implementation.

Governments can also enable deep energy retrofits through policy. Two studies found that the mere perception that a policy will eventually be introduced motivates building owners to pursue retrofits (Cauvain & Karvonen, 2018; Reeves, 2011). Policies that simplify program design and delivery and reduce administrative burden for subsidy applicants remove common challenges for retrofit projects (Fylan et al., 2016; Lambrechts et al., 2021). Changes to existing policies may also be considered, given that existing policies on energy poverty have not supported retrofits but have focused on cost relief on an emergency basis rather than energy efficiency improvements for low-income households (Liu et al., 2019). 

Organizational leadership—the ability to effectively plan and perform retrofit activities—is an enabling factor. Retrofits are more successful when project management involves accountability for the planning, financing and monitoring of projects and when an institution bears the organizational costs of the retrofit (Streimikiene & Balezentis, 2020; Tsenkova, 2018). Indeed, a lack of government support, a lack of consistency in government policy, and institutional barriers make it difficult to navigate retrofit policies (Lambrechts et al., 2021; Peel et al., 2020; Putnam & Brown, 2021). Organizational leadership can be institutional but can also be community-led. Community-based leadership was found to be “effective at engaging households, can contribute to local supply chain development, help households access financing, and be a valuable delivery partner for local authority fuel poverty schemes.” (Putnam & Brown, 2021, p. 1). However, a barrier may be encountered here when tenants wish to make efficiency upgrades but do not have the authority to do so (Liu et al., 2019). 

Retrofits are often motivated by a need to replace or improve a building’s technical facilities (Ossokina et al., 2021); however, tradeoffs between replacing essential components and performing deep energy retrofits are financially mediated when there is not enough funding to do both (Tsenkova, 2018).

Information barriers to implementing retrofits include difficulty identifying and engaging private landlords (Fylan et al., 2016), lack of awareness and training in the construction sector (Bodach & Hamhaber, 2010; Lambrechts et al., 2021), unclear energy performance data, and lack of professional advice. Also, addressing residents’ unawareness of retrofit programs—via  multimodal engagement such as energy efficiency labeling for buildings (Bodach & Hamhaber, 2010), information on invoices, or leaflets emphasizing both their relevance to people‘s lives (Brown et al., 2014; Liu et al., 2019) and their co-benefits—can overcome residents’ information barrier to supporting retrofits.

Attitudes and values were found to impact the adoption of retrofit programs. Improved aesthetic appearances and environmental values are co-benefits of and motivators for retrofits alongside social and economic priorities (Bal et al., 2021; Bright et al., 2019; Lilley et al., 2017; Prati et al., 2020; Reames, 2016; Reeves, 2011). This should speak, in particular, to social housing providers. At the same time, resistance to new technology and fear or dislike of change among tenants and social housing providers can also be a barrier (Hoppe, 2012; Reeves, 2011; Sunikka, 2006).

In terms of health, safety and comfort, achieving a warmer home motivates occupants to pursue retrofits (Bright et al., 2019; Elsharkawy & Rutherford, 2018; Lilley et al., 2017; Webb et al., 2016). A warmer home is not simply an issue of comfort, since fuel poverty has health implications such as respiratory and cardiovascular illnesses, issues which could be remedies with the energy cost savings following retrofits (Elsharkawy & Rutherford, 2018). Relating to matters of social justice, quality-of-life concerns can take precedence over financial savings, even for low-income households (Lilley et al., 2017).

Retrofits are enabled by trust and communication between residents and housing providers about measures and costs (Reames, 2016; Seebauer, 2021), between housing providers and governments about policies, regulation and funding (Hoppe, 2012; Lambrechts et al., 2021), and between residents/building owners and practitioners regarding costs and timelines (Brown et al., 2014; Hoppe, 2012; Prati et al., 2020). One study found that abrupt changes to government programs can not only derail retrofits but also reduce trust in future programs (Fylan et al., 2016; Liu, 2018). The findings show that it is important that information about retrofits comes from trusted sources and that it is necessary to build trust through transparency and reciprocity throughout all the phases of a retrofit implementation, particularly with residents who are vulnerable to energy poverty. 

This study presents enablers and barriers to retrofits unaddressed by previous studies. While previous work on barriers and enablers of retrofits has established that financial factors are important in the consideration of energy retrofits (Bal et al., 2021; Bodach & Hamhaber, 2010; Lang et al., 2021; Mata et al., 2021; Peel et al., 2020; Streimikiene & Balezentis, 2020; Swan et al., 2013), it has mainly focused on upfront costs without identifying the nuanced impacts on other financial considerations, which can be particularly important for households experiencing energy poverty (Lang et al., 2021; Mata et al., 2021). The findings of this review highlight the importance of understanding retrofits in the context of their holistic financial impacts on residents and building owners (i.e., how energy costs and savings relate to and impact low-income living and housing). Meanwhile, they also revealed  that comfort, health and quality-of-life considerations are of equal or greater importance in retrofit decision-making of both low-income households and rental building owners (Bal et al., 2021; Elsharkawy & Rutherford, 2018; Lilley et al., 2017; Ossokina et al., 2021; Reames, 2016)—contrasting much of the general retrofit literature, which highlights financial factors as the most salient barrier (Alam et al., 2019; Mata et al., 2021). Finally, as households vulnerable to energy poverty have often been on the receiving end of broken promises from governments and housing providers, social inequities and disenfranchisement from decision-making, the issue of trust is particularly important to this demographic (Putnam & Brown, 2021; Reames, 2016; Webb et al., 2016). 

Conclusion

The results show a range of influential factors across several themes: financial, policy and organizational; trust and communication; technical; attitudes and values; and health. Health and quality of life are particularly influential motivating factors among households vulnerable to energy poverty, as is the presence of trust and communication between stakeholders. Multiple financial considerations are also important, such as the availability of no-cost retrofit options and the prospect of lower energy and maintenance costs. Lastly, government requirements to retrofit and minimum energy standards are motivating factors, particularly in the social housing sector.

These findings and the lack of focus on energy poverty within energy retrofit literature and policies point to a need for future research to explore this topic across different geographies, climates, demographics and low-income rental and ownership situations. The literature also demonstrates a need for policies targeted to households vulnerable to energy poverty. Specifically, these policies should take a holistic approach, emphasizing the co-benefits of energy retrofits in energy-poor households to maximize uptake and benefit. They should also align with overarching government climate policies and build capacity to collect information on the building stock to align retrofit projects with necessary upgrades. Lastly, retrofit policies targeted at households vulnerable to energy poverty should disseminate knowledge through trusted communicators, improve access to low- or no-cost retrofit options, and implement tenant engagement and protection mechanisms.

To cite this article

Tozer, L., MacRae, H., Smit, E. (2024). Achieving deep-energy retrofits for households in energy poverty. In Cities, Climate and Inequalities Collection. VRM – Villes Régions Monde.  https://www.vrm.ca/realiser-des-renovations-ecoenergetiques-majeures-pour-les-menages-en-situation-de-precarite-energetique-2

Reference Text

Tozer L, MacRae H and Smit E (2023) Achieving deep-energy retrofits for households in energy poverty. Buildings and Cities 4(1): 258–273. DOI: 10.5334/bc.304.

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