Ending the Retrofit Rollercoaster: Why Wave 3 Must Be Different

The UK’s path to Net Zero is currently a white-knuckle ride of boom-and-bust funding, perverse incentives, and technical hurdles. Jack Allen, Managing Director of Building Energy Experts, recently sat down with Matt Milloy on the Refurb and Retrofit podcast to talk about how we move past the chaos toward a future of genuinely warm, healthy homes.

We know what needs to be done in this industry. The problem is that the system we’re operating in often gets in the way. Here’s where I think we actually stand.

In this podcast, you’ll learn:

• Why we’ve made no profit from six years of social housing retrofit work
• What’s actually breaking the “boom-and-bust” funding cycle
• Why the wrong measures often get chosen over the ones that deliver the most value
• The real human cost of cold, overheated and polluted homes
• Why the public isn’t the barrier to bold climate action – the system is

Why I’m Still Doing This

I started in sustainability consultancy about 14 years ago – two years in commercial decarbonisation, then several more in environmental impact assessment and sustainability statements, before deciding I wanted to be more hands-on. Planning-stage work rarely lets you see the construction phase; you come back to certify at the end and often find things have changed without you ever really shaping them. That’s why I built Building Energy Experts around real-world building performance rather than paper compliance.

It’s worth being honest about what that’s actually cost us. Since we started working in PAS 2035 and social housing, we haven’t made a profit from it – every bit of profit over the last six years has come from the private sector. Social housing retrofit has been, in a very direct sense, a cost to the business, because of the boom-and-bust nature of the funding waves. We’ve stayed in it because improving the homes of the most vulnerable is worth doing, not because it’s been commercially sensible.

Stopping the “Boom-and-Bust” Cycle

The stop-start nature of social housing funding – SHDF (the Social Housing Decarbonisation Fund), HUGS (the Home Upgrade Scheme), GBIS (the Great British Insulation Scheme) – is a silent killer for the private sector. When funding “Waves” crash, businesses are forced to shed staff; when new money is announced, they struggle to scale back up, and the skills and capacity lost in between don’t come back overnight. We employ people, then things go quiet for months, then suddenly there’s twice as much work as we can possibly do.

Warm Homes Wave 3 offers a three-year window, which is genuinely more hope than we’ve had before – but uptake is still sluggish, in large part because nobody wants to commit resource before funding is fully awarded, and the gap between Wave 2.2 ending and Wave 3 funding actually landing was long enough to be genuinely damaging. For retrofit to actually work, we need a steady, predictable pipeline, not a series of panicked sprints that destabilise the supply chain every time the funding tap turns on or off.

Strategy Over “Stuff”: Why We Need Better Incentives

Current funding models often reward the visible, expensive measures – external wall insulation is the obvious example – while ignoring the invisible basics that actually make a home perform. Airtightness is a case in point: a new-build home should sit around 5 m³/(h·m²), and a lot of the existing stock we test comes in around 15, often with open, unblocked flues and fireplaces letting warm air straight out. Properly sealing those is minimal embodied carbon, minimal cost, and a genuinely strong energy saving – but it usually leaves a patch on the wall that needs redecorating, and if there’s no funding line for that redecoration, the measure gets dropped even though it’s one of the best-value fixes available. Meanwhile a £30,000 external wall insulation job sails through because the render work is already priced in. That’s a structural problem with which measures get chosen, not a reflection of which measures actually deliver the most value.

The fix, as I see it, is that policy should prioritise expertise and consultancy upfront. Invest in detailed archetyping and data-driven property assessment before a single brick moves, and you end up applying the right measures to the right homes – instead of the measures that happen to score best on paper, or fit most easily inside a rigid funding category.

The Human Cost: It’s Not Just About Carbon

Retrofit isn’t an environmental box-ticking exercise. It’s a public health issue. In this country, an estimated 1,000 excess deaths a year are caused by homes that are too cold, 4,000 by homes that overheat during heatwaves, and up to 30,000 through air pollution.

This isn’t abstract for me. I dropped my daughter off at nursery last year with her inhaler because she has asthma, and it turned out over half of her group had asthma too. I’ll say upfront that’s anecdotal – you can’t draw conclusions from one small nursery group – but it made me ask some real questions about where we live in inner-city Bristol. A lot of that comes down to solid fuel fires and diesel traffic: people still burning coal in open fires despite it being against the law, largely unenforced, plus the diesel vans and lorries that pass through areas the congestion charge doesn’t reach. A well-insulated home with proper ventilation isn’t just “green.” For a lot of families, it’s a genuine health intervention.

The Public Isn’t the Problem – The System is

There’s a common assumption in policy circles that the public doesn’t care enough about climate change to support tough action, and that assumption gets used to justify inaction. A recent Nature-journal survey of around 130,000 people found that 86% believe their country should be doing more to fight climate change, and 89% wanted their own governments to do more. That’s a big gap between what people say they want and what politicians think they can get away with proposing.

I’d also push back on the idea – recently put forward by the Tony Blair Institute – that we should deprioritise proven building efficiency measures in favour of unproven technologies like large-scale carbon capture. Building technology is one of the only genuinely proven ways we have to decarbonise the economy at scale. If we want public buy-in, we need to be honest about the scale of the risk too: there’s a vast amount of methane – roughly 23 times more potent than CO2 – locked in the tundra across Russia and Canada, and as that thaws it risks accelerating warming further, with knock-on effects for ocean currents that currently keep this country’s climate temperate. None of that is scaremongering; it’s what the climate models are showing.

“Bacon Butty Bribes” & The PR Problem

Retrofit has a perception problem. It’s seen as a dusty, inconvenient necessity, not a lifestyle upgrade – and to reach the roughly 20% “critical mass” that tends to drive real behavioural change, we need to make people actually want it, not just tolerate it. Every sustainability event in Bristol tends to attract the same committed crowd – it’s an echo chamber, not a way of reaching anyone new.

My suggestion: experiential learning. We need incentivised “open home” programmes where people can see and feel the difference for themselves, rather than take our word for it – sitting in a warm, cheaply-run retrofitted home for an hour genuinely changes how people think about their own cold one. Whether that’s a bacon-butty bribe or a £10 Greggs voucher to get someone through the door who wouldn’t otherwise show up, breaking the cycle of misinformation starts with letting people experience the result directly, not preaching to people who already agree with us.

A Call for Bold Leadership

I’ll end on a challenge to our political leaders. The London congestion charge was hugely unpopular when Ken Livingstone brought it in, and became broadly accepted within a year because it visibly improved the city. The smoking ban went the same way – deeply unpopular the day before it landed, and the day after, nobody wanted to go back to coming out of a pub smelling like an ashtray. Nobody gets elected on the promise of a congestion charge; they get elected on the promise of a transport system that actually works, and better health for everyone in it. Retrofit deserves the same kind of bold, decisive action – not more hedging around what’s politically comfortable.

We need to stop worrying about disrupting established norms and start building the homes and transport systems our society actually needs.