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The Welsh Government has given the green light and a further £10 million to a major new programme that will transform social housing across Wales, boost the economy and open the door to a new Welsh industry.

First published:
6 November 2020
Last updated:

This was published under the 2016 to 2021 administration of the Welsh Government

Backed with almost £20 million, the Optimised Retrofit Programme (ORP) is a key part of the Welsh Government’s plans for a green recovery – as set out in the recently-published Covid Reconstruction: Challenges and Priorities report.

In the first year of the programme, ORP will bring together Housing Associations and councils on projects that will help upgrade at least 1,000 existing social homes through a mixture of new energy efficient materials and technologies.

Unlike other green growth or retrofit initiatives that focus on just one aspect of the house at a time, ORP takes into account the materials our homes are made from, the way we heat and store energy in our homes and the way energy is supplied to our homes.

Some of the upgrades that are to be trialled in upcoming ORP projects will include the installation of new heat pumps, intelligent energy systems and solar panels. Off gas grid properties which can be difficult and expensive to heat are also a focus of this programme.

These measures will not only help tenants and the environment by reducing the amount of carbon produced in powering and heating homes but will also be instrumental in helping to reduce fuel poverty and develop the skills and opportunities to Welsh SMEs.

There will also be much wider and far-reaching benefits for the Welsh economy. As the programme is rolled out across social housing in Wales over the coming years, this will lead to the creation of local jobs, training and apprenticeship opportunities and supply chains as part of a new Welsh retrofit industry.

The Welsh Government will continue to work with the Further Education sector to see how it can support this new industry, with the ambition of opening new retrofit academies across Wales to ensure that there are enough people with the right skills to support this new industry.

The programme will develop the local green economy and contribute to the Welsh Government’s efforts to decarbonise all 1.4 million Welsh homes by 2050. It is anticipated this could lead to as many as 15,000 jobs in Wales.

One project hoping to receive funding is a consortium of 26 Social Landlords. The consortium will work not only to improve homes across Wales but test the way heat and energy is produced, stored and supplied and develop innovative labour and material frameworks targeted at creating a ‘green economy’ by upskilling Welsh SMEs and manufacturers. Evidence shows that for every £1.4 million of investment in the delivery of domestic energy efficiency, 32.6 jobs are created or supported.

To support innovation in the ORP, social landlords were invited to apply for funding of up to £0.5 million for research and innovation projects. Applications were invited to address a range of challenges from consumer acceptance to improving the impact of retrofit. It is hoped that successful projects will improve the pipeline of innovative ideas to accelerate decarbonisation and help grow supply chains in Wales.

The Minister for Housing and Local Government, Julie James said:

Our goal as a government is to deliver a more prosperous, equal and greener Wales. These values remain as valid today as they did before the pandemic. We see the Optimised Retrofit Programme as just one part of our plans for a green recovery, creating a low carbon economy for Wales, reducing fuel poverty and tackling the climate emergency. It’s about much more than just a one-off scheme. This is an approach that could create a sustainable, long-term retrofit industry that supports thousands of local jobs and training opportunities as we act to meet our 2050 carbon targets.

If it is successful, Optimised Retrofit will set the standard for retrofit schemes in Wales and be the forerunner of an approach and an industry to decarbonise all 1.4 million homes in Wales by 2050. But it is critical we get the approach right first. Just throwing money at the problem doesn’t work and can end up in the installation of poorly fitted measures that aren’t right for the house, don’t work and have to be replaced in just a few years.

ORP is based on research with the Welsh School of Architecture and the recommendations in ‘Better Homes, Better Wales, Better World’ published in 2019. It has led to the creation of a far more sophisticated and bespoke approach that avoids the problems of the past.

This programme will test different approaches to upgrading homes to achieve the goal of homes which are zero carbon in use including off gas properties where the challenges of decarbonisation are even greater. Not all of these homes will have achieve this by March 2021 but will set us on the right path towards it.

Although initially focused within the social housing sector, the establishment of a long-term retrofit industry will give rise to the ability to retrofit of the private housing sector providing owners with the capability, opportunity and motivation to retrofit their homes.

The Minister for Economy and Transport, Ken Skates said:

The retrofitting of homes is vital in providing better homes, creating hundreds of jobs, and establishing new supply chains.

The Optimised Retrofit Programme will stimulate a new retrofit industry, providing a real boost to the Welsh economy. This scheme has the potential to drive up private sector investment, help people develop new skills and provide important training opportunities. Innovation will be a key part of this through new techniques and ways of using materials.

As well as opening the door to a new industry, local supply chains across Wales will be strengthened from the demand created by retrofitting social homes.

Chris Jofeh, Chair of the Welsh Government Independent Advisory Group that produced the ‘Better Homes, Better Wales, Better World’ said:

I very much welcome the Optimised Retrofit Programme. It comes with cross-departmental funding, which for me is a powerful signal not only of support but also of joined-up thinking within Welsh Government. The Welsh approach of piloting and field-trialling ideas and then sharing the learnings will create a strong foundation for residential decarbonisation in Wales.