The Business Case for Passivhaus

PassivHaus has grown in popularity in the UK with increasing numbers of private residences and schools completed over the past years, as well as two major efforts exceeding 100 units by local authorities, Camden and Norwich City. Launched in the early 90’s Passivhaus promises highly efficient buildings with far reaching benefits across the building life-cycle. Why is market adoption slow and only until recently being considered at a significant scale in the UK?

A roundtable led by the ULI Sustainability and Residential Council’s provided first hand insights from Norwich Council, Grosvenor, Lendlease, Bridges Investment Fund and urban environment leaders into why adopting Passivhaus or ‘Deep Retrofit’ standards has limits within the current market but may have a greater influence in the near future. Interestingly the reason for each of the organisations to adopt Passivhaus or Deep Retrofits were due to considerations for the long-term environmental impacts from the built environment, plus a recognition that the schemes should create a long-term benefit for investment, occupiers and society.

(Please note the term Passivhaus also recognises the term Deep Retrofits)

Key findings from the Passivhaus Roundtable include:

  • In one of the schemes 4% of homes took 40% of the time but this also recognised that learnings from undertaking Passivhaus have led to increased organisational skills and possible efficiencies for future delivery
  • Measuring the occupier benefits and collection of data from tenants is a challenge
  • Passivhaus is little known across the market indicating a need for wider marketing to incentivise the industry including signposting to best practice
  • Occupier comfort and wellbeing are a key benefit that are under-valued and could be further promoted to drive market awareness
  • Passivhaus is not well recognised within current policy both on a local planning and national
  • Delivering Passivhaus at scale and upskilling the supply chain could further unlock greater market uptake as benefits are realised across the industry
  • Payback periods if measured on delivery could be limited but many of the schemes are in the early stages of development and as such there is an anticipation that longer-term investment returns will be realised

Without a significant range of market examples or cost benefits insights, each organisation undertook Passivhaus to test its value with some fascinating results. Interestingly Norwich and Lendlease undertook Passivhaus in the early phases for new developments, while Bridges Investment Fund is delivering a second Passivhaus scheme to take forward learnings from an earlier development of an aged care home. Grosvenor on the other hand undertook a different approach which focused on applying Deep Retrofits of three different standards (see case studies below) across existing dwelling, to further assess the true benefits.

A lack of industry knowledge, skills, available materials and planning limitations were identified as common challenges for each organisation. Most notably the current planning system often does not recognise Passivhaus use of non-conventional insulation, ventilation or heating methods, within the planning codes and as such require further engagement with Planning Departments to gain building permission. In addition a lack of skills or materials often led to delays and as such each organisation recognise the greatest benefits are created when Passivhaus are adopted at the earliest concept or design phases.

To further overcome market barriers Norwich City Council have taken a regional approach which addresses the supply chain challenge, by providing training to upskill the construction sector, which in turn will provide a far-reaching benefit to the delivery of efficient homes in the region. In addition, by delivering Passivhaus at scale they are also directly improving the supply chain, creating long-term financial protection for low-income residents, improved rental yields and demonstrating leadership, which may further benefit the region.

Unlocking long-term benefits

To further prove the business case each organisation recognises the wider influences their schemes are having on the market, which include; reduced maintenance costs due to less heating appliances; improved indoor air quality; increased quality of market offering and long-term carbon reductions implications. However, evidence is limited as many of these factors are yet to be fully measured but indicate that a maturing Passivhaus market could further unlock the delivery of more efficient homes across the UK if wider benefits are recognised.

Beyond the benefits of the build, a major barrier is scale and the related lack of market knowledge or supply chain inefficiencies.  Through leadership from the case studies presented it is inspiring to see organisations testing and incentivising the market, which in turn could further develop skills to deliver Passivhaus at scale. An increase in skills, locally available and viable Passivhaus products will in turn further incentivise the market in the UK and may indicate a greater uptake of Passivhaus in the near future.

International examples of large scale Passivhaus schemes do exist however like the UK examples many of these are still to mature. Examples include 1400 Alberni in  Vancouver, the tallest Passivhuas scheme in the world, a 26 storey student development in New York and ‘Bolueta’ a 171 apartment complex in Bilboa (further details here) may also incentivise global investment in Passivhaus, which may further unlock the market.

Within a UK context the roundtable recognised the following market barriers that could further unlock the delivery of more efficient buildings and these include:

  • A greater promotion of Passivhaus and the ability for people to engage with the benefits of Passivehaus and Deep retrofits should be realised as larger schemes or wider delivery occurs
  • Regulation and policy inconsistencies at times do not recognise Passivhaus or Deep Retrofits and most Passivhaus developments meet Code 5, recognising this could further incentivise developers
  • A priority to deliver homes in the UK is a further factor where sustainability factors are compromised due to a need to deliver at scale and within budget, thus not factoring in the long-term implications for occupiers and investors.
  • Evidence of wider befits such as health, comfort, sound, air quality and occupier happiness should further unlock the true value and as such recognises the need to view the delivery of more efficient homes holistically, beyond the point of sale or development.
  • Embodied carbon and decarbonisation of the grid should further incentivise engagement and recognition
  • Government Policy could further recognise Passivhaus and Deep Retrofits within the context of the UK’s Clean Growth Strategy, thus providing a lasting benefit for wider society
  • Greater promotion and engagement with the Passivhaus Trust who provide wealth of advice and support across the UK

Even though Passivhaus has existed for decades the roundtable highlighted that Passivhaus at scale is in its early phase, both globally and in the UK. Leadership by Norwich, Bridges Fund Management, Grosvenor and LendLease should demonstrate that the delivery of more efficient homes is of interest to society and as such should further incentivise developers and investors to support such schemes. However, without policy recognising the lasting benefits for occupier health, carbon and skills across the development fields, there is a risk Passivhaus will remain niche.

Please find the Case Studies from the Passivhaus Roundtable and related slides with further links to resources below.

Norwich City Council – Gwyn Jones, City Growth and Development Manager

Norwich City Council are leading one of UK’s largest Passivhaus developments delivering 227 units ranging from social housing to private rented schemes. Delivering their first scheme in May 2017 the council is driven to deliver social, health and reduced operational costs for lasting community benefits. Through their schemes the Council are driven to:

  • Create market recognition with Norwich as a destination for a skilled workforce in the sustainable building industry but also to stimulate wider market adoption
  • Create a sustainable return on investment for Council owned land and its residents
  • Deliver via the council owned Norwich Regeneration Company to deliver market and loan returns to further support the councils
  • Support the Council’s environmental aims and meet their carbon strategy
  • Build costs are 17% higher than ‘traditional’ development but the council believes it will benefit due a 5% uplift but also when whole life costs are considered
View the Norwich City Council presentation here

Future Home Elephant Park, Lendlease
Miles Lewis, Sustainability Manager Development – Europe

Elephant Park is xxx development just south of Central London where Lendlease are developing xxx dwellings and through each phase are testing innovative solutions. One of these themes is Passivhaus which they are adopting to 15 terrace homes known as ‘Future Home’. In combination the scheme is also part of the C40 Climate Positive Development Programme  which includes 18 international real-world projects that aim to deliver a ‘green print’ for future development. Some of the insights include:

  • 15 dwellings – Future Home part of a 22 terrace modular developments using Cross Laminated Timber (CLT)
  • Adopted Passivhaus late and learnt that adopting the standard from the start would have saved in many aspects of the development.
  • Future elements are also included to go beyond current standards. These include grey water recycling and smart homes technology
  • Cost were higher due to additional materials, consultancy, certification but the wider organisational, sale and supply chain influences still need to be fully quantified
View the LendLease Future Home presentation here

Grosvenor’s Retrofit Programme – Victoria Herring, Director Refurbishment & Retrofit

Rather than applying a single certification Grosvenor focused on testing 3 retrofit case studies to better understand the varying outcomes from a ‘Deep Retrofit, Bream Outstanding and Passivhaus to support their goal of achieving a 50% carbon emission reduction by 2023. Learnings from the retrofit programme and case studies included:

  • Embedding energy efficiency can create 35%-80% carbon savings
  • 4,000 tonnes of carbon saved
  • A platform to share knowledge and drive innovation leadership
  • First BREEAM outstanding heritage building but more expensive than Passivhaus
  • Strong collaboration with Westminster City Council Planning Department

Bridges Fund Management, Ivan Rodrigues, Sustainability Director  

Bridges Sustainable Property Fund undertook their first Passivhuas development in 2010 with Juniper House a care home in Brackley, Northamptonshire. Building on learnings from Juniper House, Bridges Fund Management are now embarking on a second Passivhaus scheme in Bristol and insights from their experiences include:

  • Material costs are higher but wider occupier benefits such as air quality and health benefits provide lasting value
  • Long-term study with Cardiff University to measure the outcomes of the development have shown that most residents are very satisfied and Passivhaus predictions are slightly different indicating possible need for management training to fully realise the benefits.
  • Cost uplift 6%
  • Second development at Picture House Court, Bristol focuses on taking forward the earlier learnings from Juniper House
View the Bridges Fund Management presentation here


Further information view the links below

Passivhaus Trust

ULI Sustainability Council

ULI Residential Council

A special thank you to George Tyler, Director, Ekistics Capital and Committee Member of the ULI UK Sustainability Council for bringing this roundtable to ULI

Author: Robert de Jong, Programme Director, ULI UK

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