The Hidden Social Value of Energy

The built environment sector can address these negative impacts through Passive House housing standards and other energy efficiency measures. Not only is this an opportunity to minimise negative impacts on people, but it can also create new positive influences on people’s lives. Developers should understand how energy reduction and energy efficiency measures can create both positive and negative impacts and use this to create higher-quality homes that better serve residents.

Rising energy costs have directly hit people’s savings and wealth, leaving those who cannot afford to pay significantly worse off. The wholesale price of gas has increased, and the cost has been passed onto customers, increasing energy bills by 12% in October.[2] As this coincides with freezing weather conditions, people are paying significantly more to stay warm through the winter, increasing financial strain and anxiety over meeting basic needs.[3]

For the millions who cannot afford to heat their homes adequately and regularly, [4] there are serious and direct consequences for their health, wellbeing, and quality of life. When temperatures plunge, hospitals see more patients with heart attacks, strokes, and respiratory infections, including influenza. [5] A Level 3 cold weather alert was issued by the UK Health Security Agency (UKHSA) in December, warning the weather could “increase the health risks to vulnerable patients and disrupt the delivery of services”. [6]

Beyond the direct impact of cold weather on health, poor living conditions have effects on wellbeing. Cold temperatures are linked to mental health problems, such as depression, often compounded by seasonal affective disorder caused by shorter daylight hours. Winter can also be isolating for those with already limited mobility and social networks, particularly older people.[7] Icey winter weather may prevent people from leaving their homes, reducing their ability to participate in the community, and increasing social isolation. There may also be knock-on effects on people’s work and job quality, with stress a major factor in job performance, and cold temperatures affecting those who work from home or outdoors.

Warm Banks and Food Banks offer immediate assistance to those who cannot afford to heat their homes or buy what they need to make a healthy meal. The government has also provided some support through the Energy Bills Support Scheme. For the built environment sector, long-term steps can be taken to relieve some of these consequences. Amongst other housing-based interventions to these issues, such as age-friendly homes which encourage social mixing and care for vulnerable people, energy-efficient homes can keep people’s homes warm, reduce energy costs, and improve people’s health and wellbeing.

At present, neither government nor housebuilders entirely see the link between energy and wellbeing. A social value assessment that focuses on the negative impact of high occupation costs, or the positive influence of a lack of worry and the guarantee of a cosy house can be brought into graphic detail by applying a Social Return on Investment analysis to these issues. An SROI uses financial proxies to monetise the changes in people’s lives from an intervention, helping to communicate the significance of social outcomes to an audience and can help shed light on the best approach for housebuilders. Energy efficiency can be offered through various means, and developers must be considerate about which solution generates the most social value.

For example, communal heat networks are a way of heating blocks of flats or groups of homes, which can deliver cost-effective, low-carbon heat. However, communal maintenance can often be poor and a lack of controls on individual use may lead to unfair bills. Significantly, communal heat networks are not covered by Ofgem’s energy price cap, and some bills reportedly increased up to 350% during the cold snap, [8] leading to an investigation as to whether residents in 14,000 blocks in the UK that rely on communal heating and hot water systems could mount a legal claim [9]. Another energy solution that was backed by the UK Government until recent years was the burning of biomass wood pellets to produce energy. Recently, however, their credentials as a green energy source have come under question, with 80% of the pellets burned being shipped from North America, [10] creating sustainability issues, while the specialism of the systems means that they are difficult to get fixed which potentially contributes to individuals’ long-term costs.

A recent article in the Guardian [11] highlighted a social housing estate in Norwich, in which residents have claimed that inside their homes has been “like summer” during the recent weather, despite not using their heating system. The 105-home development was hailed a “modest masterpiece” when it won the Stirling architecture prize in 2019 and is properly insulated and ventilated to Passive House Standards. Initially developed in Germany in 1990, Passive Houses adopt a whole-building approach with clear, measured targets, focused on high-quality construction. They utilise, for example, triple-glazed windows and recycled heat from neighbouring flats, which helps provide a high level of occupant comfort whilst using very little energy for heating and cooling.

A major benefit of Passive Houses is that the climate of the house is not dependent on the use of heating and cooling systems [12]. This creates lower fuel bills from reduced energy consumption and increased disposable income for the consumer. Fuel bills are significantly lower because of the reduced energy consumption. Further, Passive Houses are affordable to build, as the investment in higher quality building components required by the Passive House Standard is reduced by the elimination of expensive heating and cooling systems.

As the UK faces an increasingly turbulent climate, resulting in heightened extreme weather, it is the role of housebuilders to ensure that they properly consider the social value of their developments. So far, this winter has clearly shown how cold weather can lead to reduced living quality, reduced disposable income, poor health, increased social isolation and reduced subjective wellbeing. However, the social efficacy of energy-efficient homes could be considered as a tool to avoid inadvertently creating adverse impacts. The benefit of a Social Value assessment alongside the implementation of energy efficiency measures is evident, not only to ensure that negative impacts are avoided but that benefits to individuals are being properly maximised and communicated.