Financials
Make net zero carbon = net zero cost!

Net zero cost with a good payback

1. Know your current energy costs

2. Identify a potential net zero investment budget that gives you an acceptable return

3. Prioritise the easiest investments: low disruption, clear returns: loft insulation and solar PV

4. Plan the rest of the investment: fabric (if needed) and heat pump

5. Integrate with any wider refurb plans

1. Know your current energy costs

You will need your bills and a smart meter. We cover this in detail in Getting Started. Average UK bills are around £1600 per year in late 2023, split about evenly between gas and electricity, not including standing charges (which sadly do not diminish as you approach net zero...).

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2. Identify a potential net zero investment budget that gives you an acceptable return

We suggest 10x your bills, to give you a potential 10% return aka 10 year payback on your investment for reaching net zero. You may see it differently, especially if you plan to borrow some or all of the investment funds. Different parts of your Net Zero investment will pay off at different rates. At current prices we would expect loft insulation and solar PV to be the most consistent and pay back in less than 10 years - perhaps as little as 5 or 6. The payback on a heat pump will vary more, from less than 5 years with a continued grant, energy efficient home and competent install, up to potential parity with gas with a less efficient installation - in this case you would not save vs your gas bill, though you probably would vs future boiler replacements.

For the average home our 10 year suggestion would give a ball park £16,000 investment budget - though you may not need all this. This is really the amount that might be worth spending, but not necessarily the amount you will need.

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3. Prioritise the easiest investments: low disruption, clear returns:
top-up loft insulation and solar PV

In almost all circumstances top-up loft insulation* and solar PV are the most straightforward measures and we would do those first. They are easy to analyse, non-disruptive and do not interact with any other refurb measures (UNLESS you plan a loft extension!). Both support the later addition of a heat pump. Loft insulation reduces heat loss, allowing a lower heat pump flow temperature and lower electricity use; solar obviously provides free power for the heat pump, potentially 20-30%. You can expect top-up loft insulation to cost around £300 if you fit it yourself (easy, if dusty), and a 4kW solar roof array (12 panels) to cost about £6,500, though this might be higher in big cities. A 4kW south facing array will generate about 4000kWh per year. You will use some yourself, eg 1200 kWh pa, and export the rest. This will yield about £320 in import savings and £450 in export earnings [Octopus flux export @16p]: £770 total, giving 8.4 year payback /12% ROI.
*top up loft insulation: adding 200mm rockwool to the 100mm commonly found in between the joists in your loft.

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4. Plan the rest of the investment: fabric (if needed) and heat pump

First, go through the heat pump quote process, which we describe in all its beautiful detail here! This will tell you what your trade offs are: whether you're likely to be able to put in a heat pump without any significant fabric work, or whether fabric work is advisable to bring down heat pump installation and/or running costs. But do not go ahead with a heat pump without considering wider fabric work, including any wider refurb plans. If you install a heat pump before improving the energy efficiency of your house fabric, you will lose out: you will put in an an unnecessarily large heat pump which will be less efficient, and possibly upgrade radiators you would not otherwise have needed to. You want an integrated heating/fabric solution.

You can alternatively go ahead with fabric improvements regardless of whether or not you plan a heat pump. They will deliver savings and extra warmth whatever your heat source - oil, gas, whatever.

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5. Integrate with any wider refurb plans

Here's where you bring your Net Zero investment plans above together with whatever else you want to do: extensions, new windows, new kitchen/bathroom, redecoration, loft extension... we are developing a dedicated refurb page, but in the meantime here are the main interactions:

• Extension: the biggest impact, changes the area and heat demand of the house, and potentially the roof line. Build the extension using the best available insulating materials, the incremental cost will be small but it will perform so much better than just meeting building regs. Ensure your heat pump heat loss calculation covers the house as it will be, not just as it is. Look at using underfloor heating in the extension, which works expecially well with heat pumps and is really comfortable too!

• New windows: an expensive measure and so unlikely to be worthwhile purely for energy efficiency reasons. But if you're replacing them anyway, look for high efficiency windows. Relevant suppliers include Green Building Store, Velfac, Rationel. You're looking for the best "U-value" or Uw which measures window energy efficiency, Uw=1 or less is your target.

• Loft extension: clear impact on solar panel and insulation. If you plan this then bring your solar plans into the design, try to avoid removing a good location for PV. Like any other extension, use the most energy efficient building techniques available, it is always so much cheaper than retrofitting later.

• New kitchen/bathroom: less impact here but there may be the opportunity to fit internal wall insulation, or just stuff insulation down the back of the units! In the kitchen get an induction hob rather than gas, then when you have your heat pump too you can disconnect the gas and save on that standing charge - saves ~£100 per year. Also put in heat pump-ready radiators as part of the process, or underfloor (central) heating. NEVER put in plain electric heating of any kind. Too many builders will suggest this eg as cheap-to-install underfloor heating, electric towel rails or "kickboard" heaters, it will undermine your net zero plans and be very expensive (4x as much as gas).

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Summary of Net Zero measures, with approximate payback/ROI