Scaling regional retrofit is both a big challenge and a significant economy opportunity for South Wales. This is the conclusion of a key report led by Wavehill - with technical input from Energiesprong UK - that’s designed to help 10 local authorities in the region meet their net-zero targets.

Cardiff Capital Region (CCR)¹ and the CCR Regional Skills Partnership (CCRSP) commissioned economic research organisation Wavehill – with support from Energiesprong UK – to explore future demand for retrofit installations, the readiness of the regional supply chain, and the workforce and skills needed to meet each of the 10 local authority’s Local Area Energy Plan (LAEP) targets by 2050.  

The goal was to provide a detailed understanding of the current landscape along with a clear roadmap to overcome existing barriers and the strategic interventions that would enable the scale up of domestic building retrofit across the CCR.  

Understanding the scale of the retrofit challenge – the headline findings

There are 698,000 dwellings in the CCR with an estimated 400,000 (57%) below EPC Band C and requiring upgrades. The study focused on three main types of retrofit upgrades; solar PV and battery storage, heat pumps, and fabric improvements (external wall, cavity, floor and loft insulation, and triple glazing).  

Some of the headline findings were:  

• Around 73% of homes will require heat pumps to meet LAEP 2050 targets

• 61% require solar PV installations

• 61% will need fabric improvements  

• Annual installation rates will need to double for solar PV  

• Heat pump installations will need to increase more than 20-fold per year based on current rates.

The research also discovered several barriers slowing progress:

• Consumer demand is constrained by cost concerns, perceived disruption, and low awareness, understanding and trust in retrofit measures and technologies.

• The construction sector based within the CCR is dominated by micro-businesses with limited capacity to scale.

• A shortage of necessary skills within the construction sector influenced by a retirement crunch, trainee drop-outs and plateauing apprenticeship numbers.  

The research highlighted the scale of market transformation required and the need for coordinated regional intervention across skills, supply chains, consumer engagement and delivery models. 

Retrofit as an economic growth opportunity – the potential benefits

While the scale of the challenge is considerable, so too are the potential benefits.

Current retrofit activity in the region supports approximately 415 jobs and generates £25.5 million in Gross Value Added (GVA) annually. Meeting future retrofit demand could increase these numbers five-fold, supporting more than 2,300 jobs and generating £143 million in annual GVA up to 2050.

Wider benefits include the creation of higher value jobs, local supply chain growth, attracting inward investment, stimulating local spending, and supporting research, development and innovation (RD&I) opportunities in the region.  

Four priorities for scaling delivery

The study provided CCR and regional partners with a strategic evidence base to inform future investment, skills planning, and retrofit policy development centred around four intervention options:

1. Co-ordination of retrofit activity in the region

2. Demand stimulation for installations

3. Supporting SME and supply chain scale-up  

4. Workforce development, skills enhancement and training pathways.

The work is now helping contribute to the wider transition toward a low-carbon built environment, by ensuring regional skills, businesses, and infrastructure are prepared to deliver retrofit at scale. 

Rowena O’Sullivan, Regional Skills & Talent Senior Manager at CCR, said: “This is a comprehensive study that defines the magnitude of the change needed, but also defines solutions to develop and stimulate skills, jobs and supply chains in this sector and will be a valuable framework to take this work forward.”

Caryn Grimes, Regional Skills Partnership Manager for the CCRSP said: "The transition to a low-carbon economy presents a significant opportunity for the Cardiff Capital Region. This study gives us a clear understanding of the workforce, skills and supply chain capacity needed to support retrofit at scale, helping us to align skills provision, support businesses and maximise the economic benefits for our communities."

Energiesprong UK’s contribution

As part of the project, ESUK provided technical expertise to help shape realistic deployment pathways for solar PV, heat pumps and fabric retrofit measures.  

We also developed a workforce and skills model to estimate the resources required to meet LAEP targets, researched successful approaches from other parts of the UK to create inspirational case studies, and helped identify the main challenges and opportunities for sector development.

A model for other regions

Many local and combined authorities are facing the same questions the research explored: What scale of retrofit activity is needed? Does the local workforce have the skills and capacity to deliver the work? Where are the supply chain gaps? What interventions will unlock growth?

The approach developed for the Cardiff Capital Region provides a replicable model for other local and combined authorities seeking to align retrofit ambitions with realistic delivery capacity, investment planning and local economic growth.  

Interested in exploring similar research for your region?

Energiesprong UK and Wavehill can work with local and combined authorities to understand retrofit demand, assess supply chain readiness, and identify practical pathways to scale delivery.

Please get in touch to find out more: info@energiesprong.uk  

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¹ A regional body made up of 10 councils across South East Wales

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