Meeting the net zero emissions target for homes in Wales is creating a multi-billion pound market for green industries across Wales.

The future of housing is rapidly becoming the here and now of housing as the sector transforms to meet the 2050 net zero carbon emissions target. The scale of this challenge is immense, it will change the way we build new homes, and will require existing homes to be retrofitted to become net zero in what is a relatively short period of time.

This need to create net zero buildings is happening on an international basis, and the global market for green building materials is projected to increase in value to over £299 billion by 2027. This growth is being driven by the change in the way we build, which in-turn is going to result in a sustained increase in demand for a raft of new materials including: PV Panels, ground source heat pumps, batteries for domestic energy storage, insulation products and other sustainable building materials in particular timer products. Here in Wales, the manufacture, supply, installation and use of these materials has the potential to create a wealth of new business opportunities. Already, this is becoming evident with the demand for these materials being underpinned by the shift to sustainable, energy efficient home building and retrofitting. Here are few examples of how this transformation is becoming apparent in Wales:

• Dutch modular house builder Jan Snel have set up office in Swansea
• The Welsh Government’s Innovative Housing Programme have announced a £35million investment to build 400 factory built homes using local Welsh companies
• The launch of the Optimised Retrofit Project, supported with £13m of Welsh Government funding. This will see over 1,700 homes across Wales become more energy efficient, and will play a key role in developing the most effective approaches to the retrofitting of social housing across Wales
• Denbighshire County Council has announced the building of 22 new, for rent homes, for the first time in nearly 30 years. These homes are being built by Brenig Construction to Passivhaus standards
• The trailblazing Parc Hadau zero carbon neighbourhood being developed in Pontardawe, by Sero Homes.

Encouragingly, there are plenty more examples that could be added to this list, and it's evident that the Welsh Government are playing a proactive role in supporting the transition towards zero carbon homes. This shows their commitment to help ensure we meet the 2050 target, and also illustrates the direction of travel for housing into the future. Broadly, this will involve the retrofitting of 240,000 homes that are managed by Housing Associations across Wales, along with the need for privately owned homes and properties owned by private landlords to become net zero carbon. It will also impact on how new developments are designed as there will be a real value in homes having their roofs aligned to benefit from maximum solar gain whilst also having effective Sustainable Urban Drainage Systems (SUDS) in place.

When you consider that in Wales, across all tenures there are an estimated 1,437,567 dwellings, both the scale of the challenge and the opportunity becomes apparent. For example, with a highly assumptive average retrofit cost of £20,000 per property this market in Wales would have a size of some £28billion. As for new build homes the position is less clear, for example factory built homes can be manufactured to exacting standards off site in controlled environments that aren’t affected by the weather. The cost savings this can generate could be used to help offset the extra cost of a ground source heat pump for example, although alternatively with demand for housing being so high we could find the extra costs simply being added to the purchase price for new homes.

For businesses and entrepreneurs, green industries that feed into the construction of housing present significant long term investment opportunities. The volume of heat pumps, PV panels, batteries and insulation that will be required to achieve zero carbon homes, does raise the question as to how much of this equipment will be manufactured in Wales. My research has failed to identify a ground source heat pump manufacturer in Wales. If I’m wrong, I would be delighted to be corrected. Likewise all the batteries that will be needed for homes to store the electricity they generate from their PV panels, and the panels themselves will all need to be manufactured at scale. Surely this creates the potential to grow new manufacturing capabilities across Wales to meet both domestic and export markets? It’s also worth remembering that not all the solutions need to be high tech. For example: Wool has excellent insulation properties and can have a role to play in helping to make Welsh homes as energy efficient as possible, whilst also helping to boost our rural economy.

Irrespective as to how much of the future we manufacture here in Wales, there will be an increasing demand for people to be equipped with the skills needed to retrofit homes, to build homes in factory settings and to maintain the net zero carbon homes. This should help to create the new jobs throughout Wales that will be needed to underpin the emerging green industries. However sufficient training and apprenticeship programmes need to be in place to ensure this happens.

Whilst the 2050 net zero emissions target may seem distant, to achieve them means action has to be taken now, a sentiment highlighted in the latest report from the International Energy Agency (IEA) that says: “no new fossil fuel boilers should be sold from as early as 2025 if the world is to achieve net-zero emissions by the middle of this century”.

In Wales our green industries will drive forward the transformation of housing, and the scale of this transformation opens up significant new opportunities for those businesses that choose to embrace the net zero future. In addition to helping mitigate the impact of climate change, the decarbonisation of housing also offers the very real potential to grow our economy, and create new employment opportunities across Wales.