Season 5, Episode 179 : Green up or knock down: how to make housing more sustainable

Will Richardson 00:11

Hi and welcome to Sustainability Solved the Sustainable Business Podcast. I'm Will Richardson and I'm the founder and CEO of Green Element Group incorporating Green Element, Compare Your Footprint and of course Sustainability Solved. We've been empowering organizations to manage their environmental impacts for a just and sustainable world since 2004. Two of the most pressing concerns of our generation are housing and the climate crisis and in the UK, in particular, our housing stock is in desperate need of modernisation and improved insulation. But this problem isn't limited to the UK we need affordable housing that is better for the environment and more affordable to run. But how do we get there? Today we meet two people taking very different approaches to sustainable housing. Carl Gish is from Aro Homes who are a US startup looking to replace existing dilapidated housing stock with new energy efficient homes built off site to Passivhaus standards. Marion Baeli is an architect, author and board director of UK Passivhaus trust. She has written about residential retrofits, and as a partner of studio PDP. She worked on Princedale road, the first Victorian residential retrofit in the UK to be certified in the Passivhaus. Standard. And for our international listeners, Victorian houses were built around about the early 1900s. Is that right?

Marion Baeli 01:47

Even before...

Will Richardson 01:49

Even before, okay, cool. Carl, Marion, thank you so much for joining us. I'm interested to hear about both your different approaches to sustainable housing. First of all, can I ask you both to give us the case for creating a more sustainable housing your way? Marion, maybe we'll start with you.

Marion Baeli 02:08

Well, I mean, with my expertise in retrofits hat on, I suppose I would say that the most important thing is really to make the most of the stock that already exists. And there is quite a long way to go to make the you know, existing homes fit for the future. So this is this is obviously where I would start in short call.

Carl Gish 02:35

Yeah, I'm afraid I may not jump right into the controversial side, because I think both are necessary. At least the United States, there's housing stock that wasn't built 100 years ago that but it was built 60, 50 years ago. And it's just not very good housing stock. And the cost of retrofitting would be probably greater than doing well than it would be to start from scratch. So from my perspective, but both are appropriate in different circumstances.

Will Richardson 03:05

Marion, can you tell us why you think retrofitting is important.

Marion Baeli 03:09

So first of all, you know, we have 27 million dwellings in the UK, for example. 20% of the stock is Victorian, which is single glazed, mostly with solid brick wall, which is vastly inefficient, when I say vastly is, you know, maybe five times worse than what you're talking about car. So there's quite, there's quite a lot of kind of impact to be had by addressing the performance of these buildings, this housing stock. And then there is also obviously the cavity wall constructions that need to be retrofitted, which are not always filled with insulation. So that sort of post 1920s housing stock in the UK also needs to be addressed. And as you're saying, Carl, I'm working at the moment on 300 units, which have been built 12 years ago, which are underperforming to the standard that they were designed to be achieving, not even the you know, the standard that we should achieve. So I'm retrofitting that right now. So, you know, we need to make it I mean that we need to address the inefficiency. But more more importantly, the reason why we need to address this inefficiency is because we need to move away from fossil fuel. And at the moment 87% of the housing stock is late is heated via the gas network. So we've got to decarbonize that space heating, we call it so the first thing is to reduce the demand and then electrify this is what we need to do for to address the you know, the climate change emergency that we are all facing. So this is the key reason is keep people comfortable, and at the same time, address the issue of obviously, climate breakdown.

Will Richardson 04:59

That's great. Thank you. That's brilliant. And, Carl, what are the merits of creating new sustainable housing?

Carl Gish 05:06

I think there are many fold. First off, you obviously, don't have to deal with the constraints, if you will have an existing structure and replacing whether it's insulation or adding more balls or ripping out the H PAC system, the heating system, etc. And that's the approach we've taken, we've said, Look, in the United States, there's about five to 6 million depending on the year, new homes built a year. And we have a depending on who you speak with a shortage of homes, about five or 6 million on top of in the UK, the 20, I think you said grand 27 million homes in the US it's 86 million single family homes. And the average age of those is something like 43 years, 42 years. So there's clearly a need, we're building new homes, I would posit that the new homes we're building should be as environmentally sound as they can be that 23% of global carbon emissions come from single family homes was a data point that I wasn't aware of until I got started getting bought in this business a few years ago. And it sort of blew my mind, frankly, because I would never put single family homes, if you'd given me a Hey stack rank the things that are messing up the environment, creating the most pollution, I wouldn't have put single family houses, it just just we don't think about it that way, at least I don't. And so the scale of the problem is just massive and not super visible. Because these things are just houses that we drive by every day, we don't see the emissions coming out of them. In the US still new homes about only less than half are being built with heat pumps, which is vastly more efficient. The kind of insulation, the kind of envelope just things that if you set out to build an environmentally sound home, you would do just aren't done today, it still blows my mind that in this, especially this year, with all the stuff going on around fires and disasters, anything else, we're still building it the same old way. And I think that's the case in most countries, frankly. So I guess my position, if you will, if I had to take one is that there's really no excuse for us to be building homes that are so deficient anymore, the technologies, they're sure they may cost a little more. But if you do them right, they'll end up paying for themselves. Within years, the first homes we're building actually get to net zero, so they offset the full embodied carbon of building the home 16 years.

Will Richardson 05:06

I'm gonna ask you, I'm gonna be asking more questions around that a bit later on.

Carl Gish 07:45

Yeah, so it's doable. And we need to we need to do more of it is sort of my position. Call you come at housing from quite a unique angle of brand and marketing. Can you tell us how, or why you moved from working for names like Dyson, and Amazon, to then into building homes. So my background, my passion is really about building products actually started my career at Unilever, which is, was an Anglo Dutch company, and building things that people's lives. For whatever reason, that's, that's what that was my passion in early on in my business career, and it remains it and, frankly, there's nothing more important in terms of products than the home that somebody lives in. If you think about it, it's the biggest, most expensive, most important product will ever use. And I would argue based on my experience working for people like James Dyson and Unilever and Amazon, that the the thoughtfulness, the design, deliberateness that goes into building homes, is inferior to anything we do in any other problem we buy. And it's kind of silly thinking about it that way.

Will Richardson 08:57

Brilliant. And Marian, your path to sustainable housing is more linear. You've been the board director at Passive House since 2016. But what was it that ignited your interest in greening up our housing stock?

Marion Baeli 09:13

No, I mean, a little bit like Carl, I suppose I started, you know, going to sites in my early career and realizing the poor standard of material installation on site. And you know, when I had to explain to a contractor that if I could put my arm through two pieces of insulation boards that wasn't going to be airtight or efficient. And I just thought there must be a better way of, of building this is just complete nonsense. And I just didn't really know who had thoughts a bit more holistically at this topic. So I decided to retrain and go back to university and do a master's degree in sustainable architecture and design. And I came across the Passivhaus standard during that course and that was a complete revelation. I was just absolutely blown away by the robustness of the standard and the, you know, it just made absolute sense. And then I thought, why would anybody wanted to build any different? I mean, it's, it's not a method, it's got to software, it's got a quality assurance process, it does what it says on the tin is just amazing. It's just, you know, and and it costs nothing to run. So since then I did retrofit of my house to the EnerPHit Passivhaus. Standard, and, and been lobbying for the standard ever since. So this is, this is really what, you know, what inspired me, I thought he was absolutely fantastic. To be honest with you, I just I so it's not as something difficult and complicated to do. But something really inspiring, exciting.

Will Richardson 10:45

So here's a question for you both. Do you have to be an architect to build sustainable housing? coming at it from both of your different backgrounds? Well, I would turn the question the other way is like, who else would build houses other than people who are in construction industry? I mean, you're you're talking about self-build builders, or are you talking about... Well I'm just interested to ask you both, because you're both coming at and interestingly, the Passivhaus angle as well, you're both saying that Passivhaus standard is very, very good. But then both of you aren't architects. So do you have to be an architect to be building the sustainable houses?

Marion Baeli 11:25

Well, I think you need to have a basic knowledge of construction and detailing. I mean, it does demand quite a lot of attention and, and, and precision to apply, you know, any efficient building, especially with airtightness, which is, you know, the warrant of your success, to some extent, for very low energy health. So, so I would, I would say, not necessarily an architect, was somebody well trained for sure.

Carl Gish 11:52

I'm gonna go one further, not being an architect, I'm gonna say absolutely, there's no way I would go near a drafting table, or a, we use on shape a 3d model. And we obviously start with sketching to design our home, I don't let's be very clear. I don't design the home. And, and I did try to get a little too involved. And my, my head architect, decided to help me understand that what my role was, but we have world class architect building, we haven't named them but when we do, oh, we know of them. Because architects who are the experts in design, and building and one of our one of our positions is that you can build amazingly livable, durable, enjoyable houses and be Passivhaus are better in terms of their environmental and energy efficiency performance. It's not, it doesn't have to be a trade off. Yes, there will be some constraints, there's some things that you, you know, if you will, it's an equation with lots of variables. And it's not just completely open. But if you're deliberate, working with smart, passionate people, which we are, it sounds like Marion is as well, you can solve these problems. Famously, there's certain people in the US who are talking about building housing on Mars. So if we're actually working on that today, and it's probably possible, but we're sitting here building homes, without insulation, or leaky, with crap burning fossil fuels in my attic, I have not rendered crude in my home yet. But I do have solar, but literally, it's sort of like I said, it sort of blows your mind when you for me anyway, when you step back and look at it and put it in context.

Will Richardson 13:38

Good, good. I just what I wanted to do is level that playing field and just recognize that both of you're actually coming at it from the same place. And although you've got different backgrounds, you're actually trying to solve the same problem in a similar way. And I think this is what what excites me so much about talking to you. So my next question to you, Carl, is you're using machine learning to identify potential plots that have energy efficiency, potential? Can you tell us a little bit about that?

Carl Gish 14:13

Yes, we we are using sort of large data models to identify properties that we think are particularly well suited to to our design. So one of the things that's a little unique about us is we are in the process end to end. Because we'd studied the industry studied everybody who had come before us what had gone well, and what had gone less well, whether that's about automation, or the business models or what have you. And one of things we decided to do was not customization, which is for some people particularly to design an architecture spades less, less interesting, right? Because it's all about a unique design. Well, we found that really, you get a massive efficiencies if the design doesn't change every single time. So we have a very, very common design but but a brilliant design for the for the first time. And we'll repeat that over and over again. And so what we've done is used data science data modeling to ingest all the data that we could that's out there. So there's tax assessor data that actually has all those plot lines that show exactly what a small plot in California, you know, its dimensions, its orientation, etc, along with all the MLS data, which is which is under mature if you guys have MLS in the UK, but it's basically all the real estate data, all the history of the home, all the appliances, the envelope, the footprint, etcetera, etcetera. Sale history, what have you. So there's all this data, public sources and otherwise that we that we ingest, and then we say, hey, based on our criteria, let's build an algorithm, if you will, that tells us which properties are best suited for our home design. So we end up going out and buying the traditional process is, if you're going to rebuild an old end of life home, buy a lot, design a home, permit the home, the home, we invert that so we can build the home because we're doing most of the construction off site, before we even bought the lot. So we actually buy lots that fit our home as opposed to the other way around. Does that make sense? That makes complex Yes. Very unusual. Yes, time will tell. But we think it's, again, we tried to learn from the things that you know, other people's mistakes, we'd like to say it's like, let's let's not remake mistakes other people have made. It's fine to make original mistakes. But for not to do that too much either. But certainly not mistakes that other people have made.

Will Richardson 16:40

That just doesn't make sense. How does technology play a part in planning and surveying your retrofit projects? Marion? And what are you doing now that you couldn't do 10 years ago?

Marion Baeli 16:52

So I mean, in retrofit, there's been a couple of key changes, I suppose. One is just to piggyback a little bit on the kind of MMC type of construction, there is something called energy sprung, which is probably the closest to kind of prefabricated elements to retrofit existing stocks. It's worth mentioning that there is a little bit of inroads from some force from some about applying that technology to the existing stock. But the key things that have changed since I started on the retrofit journey 10 years ago, is the contestability of materials. So since Grenfell, obviously now this is a straight No, no. So that means that we need to work with vapor open materials, as opposed to closed cell type of foam boards and that sort of thing. So we're working more and more with more natural material as well, which helps on the embodied carbon whole lifecycle aspects of the project as well. So that that's changed. And the other thing that's changed is some technological advances in particular, in London in conservation area, it's very difficult to change windows for a standard double glazing. That's not possible. So it's there is a new products on the market, that are vacuum glass panels, which are double glazing but extremely thin. They're only about six or seven millimeter overall, but they perform like a triple glazing. And for me, this is a game changer for conservation area in the history context. So I'd like to see more of these. The other technologies that we apply the air source heat pump mvhr, they haven't really changed in the last 10 years. In all honesty, the key I would say the key thing that I'd like the industry to focus on is user controls. This is still something that is not well thought through, especially when you have several pieces of equipment such as as a seat bump, and via chores and other things. You have lots of different controls that operates differently and are most often impenetrable. So a few ideas of what works and if you on what I think needs a little bit more

Will Richardson 19:12

Lovely, brilliant. And I'm interested in about the difference in timescales between retrofitting and factory building homes. Marion, I imagine retrofitting is not a quick process. So aside from getting planning permission, how long does that process take, please.

Marion Baeli 19:29

So not all retrofit need planning. So obviously, if you do the work internally, you don't need planning, you need planning for extensions, or real things and conservation area where there's some areas where you can install an external wall installation without under permitted development. You don't need planning permission and changing your windows the same as long as you're not in a conservation area. So there's a lot of you can do without planning. In terms of the length of the retrofit, it's entirely depending on the on the sort of strategy that the architect or the retrofit coordinator will adopt, and the finances available, and the practicalities of a retrofit. So it can be anything and everything, you know, you can replace a window and call it a step by step retrofit. And this is step number one, where you just replace one window, then the year after you can afford another one, and then you can afford an ventilation system and then the installation, etc. So you know, so it's it's extendable, depending on on means and practical aspects and locations, constraints

Will Richardson 20:37

And Carl?

Carl Gish 20:40

Yeah, we we have our approach has the benefit of being able to be much, much quicker than traditional construction, for a bunch of reasons. So our goal is to get from when we can close on or own an old property and apply for a home that literally is either will require massive renovation, or is better to be replaced, to having a certificate of occupancy being able to sell to a new family within 90 days. Right now we have line of sight, we think our fourth home that we're that we're just about to start building will get to 150 days. And so our goal, longer term, probably take a couple of years to get there is 90 days. And now I'll be very clear, that's in jurisdictions that do not have a design review, because as soon as you add design review, as I'm sure Marion knows, and you get a bunch of people weighing in design panels as well. So don't create the review panels that are open to public comment. It just everything goes out the window, right? Because Sonia, literally I've heard this well, that eve, I'm not sure I like the eve of that design. It's like why we're talking? I mean, it's yeah, it's a little crazy. So we're very focused on jurisdictions that do not have that they have very clear and very rigorous design codes, things thou shalt and or shall and shalt not do. And we adhere to those, again, though, our design, we start out by saying, Hey, what is all that code, say? What does all that municipal and design and energy and Public Works code, say, and we actually designed our home to meet those things upfront. So we literally and the other advantage is, so we can kind of it's almost sounds like cheating, as I'm saying this, but because the The home is built off site as much as we can, it's not subject to local inspection and permitting. It's inspected and permitted at the state level. And that state inspection and permitting supersedes any local jurisdiction, visa vie building, not not public works, connections, ie fire, water, etc. Not landscaping, not the zoning, but the actual building code itself. So that that makes it way more efficient for us to be able to, to build in a consistent, almost like a product like a like a car or a Dyson vacuum or whatever else that we're doing the same thing over and over again and getting better and better at it. And being able to be very efficient using lean manufacturing one thing and another to drive efficiencies into this process. In the US it takes at least 18 months generally for a new home to be built in what I call what we call infill, ie replacing the homes that already exist 18 months. So if we can get it down to 90 120 days, that'll be significant significant savings.

Will Richardson 23:42

Do you demolish old houses when you find the plots? Or are they usually empty?

Carl Gish 23:47

Yes, yes. And we are very careful about not wasting things. So first thing we do is we when we buy a house, you say look, is this house? Is it? Is it appropriate to replace it? Does it is it? Is it a livable house with a little bit investment? Could it be made more modernized? And the reality is the market will do that as well? People there's so much demand and people decide, oh, I'm willing, I can live in this house. I'm willing to pay X for it. So we're looking at homes that really are what we call end of life sort of they're they're truly dilapidated. They need massive work. And so what we do then is we salvage as much as we can, things like single pane windows that are 60 years old, are not particularly salvageable. They're not useful, and they wouldn't help when they get put into another home. But things like cabinetry and plumbing equipment and you'd be surprised at what people reuse. So as much of that we just we literally give it away, get salvage crews to come in and take and reuse and then whatever's left, we will what we call scraping a lot. You get a build bulldozer and run it down.

Marion Baeli 25:00

Is that mostly timber construction or solid masonry?

Carl Gish 25:05

It is mostly timber, timber, drywall. Unlike the UK, where I know there's a lot of brick, and masonry, our buildings are not like that.

Will Richardson 25:15

You're probably looking at New Zealand as well on you. Because you'll the same type of houses of New Zealand as well as the US and Australia to a degree as well, I would imagine.

Carl Gish 25:26

I think there are a lot of a lot of regions in the world right now. We're we're solely focused on California, we're proving out our model. And then our intent is to expand in the US, other other regions in the US, and then haven't started thinking about outside the US, but we think it's absolutely applicable.Yeah. Yeah.

Marion Baeli 25:47

Well, that's interesting, if you don't mind me, making a little point well, on the demolition versus rebuild dilemma that we have in the UK. And I don't know if you know, car, but there's a huge sort of press commentaries on a particular building in Oxford Street, which is the subject to demolition or not, but the arguments are usually, you know, the embodied carbon, then it contains that because your construction that you're demolishing or made of regenerative material timber is it totally changes the, you know, the arguments of can you demolish or not? So that's, that's an interesting spin, I presume you're new constructions also made of timber or... not masonry

Carl Gish 26:35

Vast majorities, timber, we're looking at alternative materials, because of embedded, embodied carbon. embedded carbon. Timber is obviously a great thing to build with. Given it, its impact. It's a big subject over here.

Will Richardson 26:54

Carl, you say the average annual net emissions of our homes is naught minus naught point three tonnes. Where did you get this figure from? And how have you come up with this figure when you're still working and building your first one?

Carl Gish 27:11

So we're very deliberate and rigorous about any claims we're making I personally have a I won't say concern, but I feel like there's a lot of noise. Some people call it greenwashing about some of these certifications and how green things are or not. And I'm no expert to be very clear. And so I need to keep it really simple. And so for me, it's how much embedded carbon, embodied carbon is in a something you build. And that should go all the way down the supply chain. Right? Let's be honest, if you will, about what actually goes into building a home. And then there's, how efficient is the home? What is its envelope? What's its HERS rating? How does how much ingress or egress of, of air and the atmosphere? How insulated is it? There's that then there's the how much energy is actually used in the home from the systems. And that's going to differ by from family to family, some family take 10 minute hot showers everybody, all day long, right? And other people are? Don't, right? And so there's some variability there. And so there's the energy usage, which again, you can model, and we do. And then there's the third component, which is, hey, how much energy can you generate, based on a PV system, and batteries, Smart Energy Management, etc. And so when we look at all of those things within goal of Ultimately, the goal we're trying to do is how do we start by using as little energy as possible in the home with systems and envelope insulation? And then how do we offset energy any the energy that is being used with an efficient PV system and battery storage? battery storage is important, frankly, because we could claim and we could put a lot of solar panels on the roof and say, Oh, look, it generates all this, all this energy. But if we're not accurately using that energy at peak hours, which is the dirtiest producing energy United States, then we actually wouldn't be doing as much as we could. So long winded answer your question, but we we use third parties to help us with some of this analysis, the embedded carbon analysis, the LCA analysis, the energy efficiency of the home based on standard measurements. And I'd say as I mentioned, the first home we build the latest calculations using the final solar array, the standard GS system, the expected usage, were at about 16 years to net zero. And Marion, you you may be familiar with some of this, I haven't been able to find a ton of data on residential housing, of how many homes are actually built that are truly Net Zero, like, how long does it take to get there, there just isn't a lot of good data. I did read about a home in Sweden that was called Villa Zero. And they got to net zero after 10 years. I don't know how they you know who or what body said, hey, 10 years is the is the benchmark. But they're claiming, hey, we're a zero carbon house because we get there in 10 years. And that's the only one I could find that had some some real substantiation. So the picture is probably worse than we probably assume in terms of how how much body carbon there is in the homes that we're building. And personally, we believe that the more visibility, the more transparency there is, the better. Because we can all be working on this and different industries, different aspects of it. And it's important we do because if we're not actually starting with what's actually the data, like what, what is the impact of a home? Then we're kind of fumbling around in the dark from my perspective.

Marion Baeli 31:05

Yeah, if I, if I can just answer this? Well, if you don't mind, there is there is some definition of netzero in the UK by the Leti guidance, in particular, and the UK Green Building Council as well. So so it's pretty well understood. But obviously, not everyone plays by exactly the same operational energy demand as each other. So I've got several clients who have set their energy use intensity, as we call it, two different targets. And therefore their definition of Net Zero is concluded slightly differently, to remediate to this discrepancy between calculations, the UK is in the process of creating a building standard. For net zero, the UK net zero carbon building standards, that's what it's going to be called. And, and will aim to, yes, to align everybody and all sectors as well, and retrofit as well. So hopefully, that should help. But it also depends on the the speed of decarbonisation of your electricity grid. So obviously, you know, if you are 100%, relying on electricity, in your, in your building, you can call yourself zero net zero carbon once the grid is 100% decarbonized. So that also will play a role as well as the embodied carbon. So so it will vary per country for sure.

Will Richardson 32:38

Yeah, I liken it to what you're looking at the lifecycle analysis of vehicles. In Europe, it's lower than in, say, the US where you've got a heavier reliance on fossil fuels.

Carl Gish 32:53

Yeah, not surprising. And I agree with Marion, it makes sense to have a common well, well defined standard. And remove sort of some of the I won't call them games but the the machinations that happen around Yeah, interpretations and, and claims and everything else. My sense is should be pretty binary is or isn't.

Will Richardson 33:18

Marion, you recently went back to visit the homes you wrote about about 10 years ago in a book. I know you can't reveal too much. But can you tell us a bit about what you've discovered and how they fared.

Marion Baeli 33:30

So yeah, so just to kind of explain a little bit, 10 years ago, the government wanted to illustrate how to reduce co2 emission by 80% for residential housing stock in the UK. And they've invested 15 million pound to retrofit 100 houses. So that was an absolutely phenomenal learning curve for the whole industry. And it produced some fantastic examples. So I took 20 of these 100 retrofits and I wrote a book illustrating to everyone depending on the construction type of your house, what you could do with it to bring it to 80% carbon reduction. So at the time, the focus was to reduce carbon carbon emission by reducing the gas demand to minimum. Now the shift is to electrify space heating, so slightly different. But nevertheless, to look at these bills, these these properties, again, are 10 of them 10 years later, is really helpful to understand in terms of fabric efficiency terms, what has worked and what hasn't worked, because a lot of people might say, Oh, you're putting these airtightness tapes, how do I know in 10 years, whether they will work or not when now we do know. So we've retested all these passes that got tested 10 years ago, and we can say that the airtightness has totally remained the fabric has really performed quite as stunningly or, let's say continuously Well, throughout the 10 years, there isn't any change. So our conclusion are relatively sort of uneventful, which is exactly where we were trying to see, the main issues is around maintenance of the building fabric as all building would go through. And that creates issues, and the maintenance of complicated services. And also, the management of difficult controls, which I mentioned earlier on. So these are the key key aspects, there is some issues around windows and door seals that have given after 10 years. And so the airtightness has, in you know, worse in a tiny bit, but is really marginal. When you look at a an air tightness of 15, maybe in some properties is gone from one to three, which is still excellent on intercepts in terms. So yeah, that's this kind of what we're looking at at the moment, but it's really exciting to see, you know, 10 years later, what has happened,

Will Richardson 36:07

Brilliant. Those really, really sounds really, really encouraging. Yeah.Yeah, and does retrofitting, does it cost way more than what Carl's doing? You know, like, how do they how does it had? Like, how does it stack up for if I was listening to this podcast, and I was going, you know, what, I really want to be more environmental, should I retrofit? Or is that a really stupid question, basically. So I mean, again, it really depends on your your construction, for example, if you have cavity walls, and you haven't, and you already have double glazing, you just need to top up the roof insulation, and then insulate the cavities if they're not already done. And, and and then, you know, you can change your gas boiler for an SOC from Pretty, pretty easily, if you have a Victorian building is much, much more difficult and therefore much more expensive. So it depends on the nature of your building or your starting point. So there isn't one rule for and also, obviously, you could do step by step that you could do, you know, just the windows first, and then the rest, etc. So you could spread it in time. Okay, that's cool. I don't know, per square meter, how, how much the, for example, the tech 20 case studies that I've looked at, compare with Carl's cost, that would be interesting.

Carl Gish 37:33

Yeah, I was gonna say I 100% agree with what you're saying Marion. And and it's, I think we're facing a similar challenge in the UK, just retrofitting gas boilers, or, as you call them, we call them furnaces, but a gas and oil for heat pumps, which there is incentives to do. So. They are factors more effective and efficient and not using as much, you know, fossil fuels, a lot of our utilities are still fossil fuel here. But way more efficient, and people aren't doing it. So it's partly it's I think part of the challenge is just human behavior. And so we take that out of the equation, frankly, in our and as I said earlier, but I believe both are absolutely necessary, because we're not going to tear down all these beautiful Victorian homes that are made of, you know, masonry, but and they do need to be made more efficient. In the US though, there's and I assume it is the same get getting a tradesperson to come out to a building and the commuting time and the setup time, and just the inefficiency of doing that work in an existing building and retrofitting it versus doing it from scratch, and off site. So our labor costs because we have a plant in Sacramento where the wages are just lower than they are and where we're building the homes in more expensive urban areas. I mean, it's just way more efficient to do it the way we're doing it. There's an adage in the US that every every single family home is a prototype. And you can maybe relate to this Marion from an architecture perspective. And it's kind of true, and for me as a as a ultimately, as a product person. That kind of blows me away. It's sort of like, Wait, there's 86 million of them. And we did that every single one was basically a prototype, except for the row homes they did in the 50s. And, and it is it's sort of Groundhog Day, every day. It's like there's people putting wood walls up with hammers and nails and lifting them up and attaching everything and it's just, it's it's the biggest industry that hasn't really changed in 50, 70 years, at least here and so there's just so much opportunity, frankly.

Marion Baeli 39:49

Yeah, I can imagine they should come and have a look at the Victorian terraced houses is millions of houses looking exactly the same?

Carl Gish 39:58

I know I spent some time in England, I have family there. And so I'm familiar with it. And and it's, it's charming. It's lovely. It's, it doesn't have to be. Yeah. So humans...

Marion Baeli 40:11

I mean interestingly enough. Chris Stark, who's the CEO of the Committee of climate change in the UK says that the number one issue to overcome for retrofit to happen isn't money, isn't the technology isn't the details of the skills is the willingness of the individual homeowners to go through disruption within their home? And that is absolutely true, I think. And so it's how you motivate people to go through. I mean, I don't know if you've done a significant retrofits in your property. But you know, you can't really live in it during the if you're doing anything significant. And then how do you sell this to people, you know, fancy moving out your house for six months? It's not very attractive. So I think it's, I mean, obviously, that's for a deep retrofit, it's not always the case. And I know many people who've lived in their properties, the entire retrofit, in fact, I have to read the book, I think there's maybe a handful, that were their tenants had to leave outside the property. But this, the disruption is definitely a key factor that people forget when we're talking about retrofit. How do you make this attractive?

Carl Gish 41:24

ya know, and it occurs to me, my, I'm going to the, hey, a lot of these Victorian homes are very similar. They had windows that were all produced identically, whatever, I wonder, where if there wasn't an opportunity for bringing some technology and some product isation to the retrofit market in the UK, where you could literally have window kits, door kits, installation kits that could be pre configured in such a way that, you know, again, I'm not an architect or a, you know, construction person, per se. And of course, there's the reality of yes, you still have to take the casing out of the concrete setting. And it's, that's non trivial. I know all those things. And it's like, Man, I wonder if there's a better way?

Marion Baeli 42:09

Yeah, I mean, the complexity or so is the fact that it's, you don't have a single owner for the entire street. If that was the case with you, it would be easier to implement a street retrofit. But in terms of kind of technology that's helping making retrofit faster. For example, there is one example in my book where somebody has developed a sort of scan of the space so that they could dimension the external walls very quickly. And then pre fabricate the insulation boards off site. And there's common in one day fit all the insulation to all the external walls that internally and Bob's your uncle. So you know, that I haven't been back to that property. I have to say, I'd love to see how it performs today. Yeah, there is ideas along those lines to make retrofit

Will Richardson 42:59

Carl, I noticed Aro homes, plan to use hydraloop technology. And you'll build it recycles 85% of the water in your home. Can you tell us a bit about that? Because I thought that was really interesting, because it's something that I thought we in the UK could possibly put in to our homes as well.

Carl Gish 43:20

Yeah, so our first home, it's actually going to be pre plumbed, and wired for the hydraloop, but it actually won't be in the building. And so that's one of things we're thinking about doing is sort of making the homes sort of hydraloop ready or battery ready for a couple reasons. One is it's expensive for us to put all this kit in not knowing whether the eventual homeowner is going to be willing to pay for it or wants it. But the hydraloop is really interesting because it is you are probably very aware California we've had and continue to have issues with with drought and water and gray water or reclaimed water from from things like the sinks and washing machine and dishwasher or what have you is absolutely can be made literally to potable levels but for use in irrigation or plumbing, toilets, etc. Just makes perfect sense. I don't think it's I know it's not mainstream yet here. People, you know, it's it's relatively uncommon, right? It's new and it's different. So the adoption curve, we're early on in the adoption curve. And I think it's something that's technology that we will that will, over the coming years become sort of the norm, right, just there's so much water, we just waste literally just down the drain that is reusable.

Will Richardson 44:45

I live in a property where you potentially could put hydraloop in because it's a bungalow with a cavity underneath. So all the pipes are accessible all the way underneath the whole house. So when we retrofitted the house, it was really interesting to see the build is literally climbed down hatches and go underneath the house and do all the wiring and everything and then come back up again.

Carl Gish 45:08

Yeah, no, it sounds like it would be well well suited to it, we have the advantage, because we're doing it's not it's not, we don't really call it modular because it's really more volumetric. We designed a home with great architects and designers and systems engineers to be a very livable environmentally friendly home environment, an efficient home. And then we said, Okay, how could we build as much of this as we can off site, and then transported to the eventual location. And so it's a lot of prefab, or modular builders today that sort of have a set of units, if you will, or a set of components that that can go together. And in several different ways. Ours is, is is quite different in that regard. It only goes together in one way. And one very precise way, because we basically disaggregated the home and then re put it back together, if you will, on site,

Will Richardson 46:11

Marion, do you think you could use something like Hydraloop in the UK or....

Marion Baeli 46:14

Yeah, I mean, the I've heard of a similar system not called quite like this for hotels, which are obviously extremely wasteful in water. And there is some system that are used in showers also for for using the heat of the hot water from showers to two words as a contribution towards the space heating. Otherwise, you're literally, you know, throwing away hot water in your drains. So there is a few system so far to my experience, the cost has been prohibitive for our clients to actually install it. But it makes sense. And I think, you know, the sense of priorities on water resources is getting, you know, to the front of the agenda more and more. So I think people might think twice, about not putting one in. And they might therefore put one in. So So yes, I think that the topic of water is is one that hasn't quite I mean, it is obviously it has made its way to the UK regulations, etc. And but maybe not to the extent yet as the hydraloop systems, you know, could bring benefits for their for their house or whatever. That's the future. Maybe

Will Richardson 47:33

You've got a lot of engineers on your team at Aro, and you're trying to refine the process of building home. Would you like to ultimately export your ideas and processes to more traditional homebuilders, house builders?

Carl Gish 47:49

Yes, absolutely. We're actually already trying to do that. On some of the site work, when we bring the volumetric components of them to the site, we're still working with very traditional how it's done today. And we are bringing lean manufacturing principles to that work, whether it's how you put in a foundation to how they do the cladding on the side of the house, all the components, and it's really eye opening to see how inefficient or how much because lean don't know much you know about Lean Manufacturing, but it's all about eliminating waste, wasted time wasted material, non value added things. And if you actually do time and motion studies, which we did on some of this work, there's a lot of opportunity. So I'll start with that. And then the other thing I'd say is we're not we're not splitting atoms here, right, what we're doing is we're building single family homes. Today in the US stick, they call them stick built because they are made of wood, and they literally are nailing sticks together large sticks. If we can demonstrate a slightly more efficient, maybe a lot more efficient way to build houses, build structures, that that works against the objective measures of cost, quality, environmental impact, etc. Aesthetics, we think we could potentially influence other builders and the industry and that, frankly, for us, because we if we become wildly successful, we build 1000 homes a year, which is sort of our five to seven year goal will be a very large, successful company, and we will not be a drop in the bucket. As I mentioned, there's five or 6 million homes being built in the US every year. 1000 is nothing. So if we can influence or impact or somehow that other 4.9 9 million, that would be amazing. And so that is a big, big ambition and it's it's something we'll do by showing it right? That's the only way if we're successful and other people see, hey, wait, what those guys are doing works, we should be looking at that, then we'll we'll all everybody in the company, do the engineers will have a lot of satisfaction if we can help influence that.

Will Richardson 50:15

I think we see this a lot of our clients that Green Element where we've got fairly small, say a financial, someone who works in the financial industry, but they are willing to open source, the work that we've done with them, to show the rest of, you know, the industry, this is how you can actually do it. This is about the finance emissions or, you know, in your case, it's about the kind of fabric and I think sustainability has a very good culture. With that where a lot people are very open to, this is how we've done it, you'll hopefully you'll be able to do it better. And people are willing to be, you know, to have that open conversation with others. Yeah, absolutely.

Carl Gish 51:03

That we 100% agree with that. And and again, it goes back to the the problem is so big, so universal, the opportunity so big. It would be well, I don't want to qualify, but we think the the right thing to do is absolutely to be open source and share and learn and collaborate. Because there's so much effort and frankly collaborating with things we're very excited about doing is collaborating with some of the systems the Schneider's of the world, the Mitsubishi's the world. Because one of the things we've seen, at least in the US is, and this may be true in the UK builders, developers generally are averse to taking on risk, trying new systems, hydraloops, heat pumps, what have you, because there's risk and because of just the economics, the market forces, they're not really incented to take that risk on, right? Because it's very hard to get a return on either investment or risk. So if we can collaborate with with some of those companies who and partner with their r&d, that being a willing partner to try new technologies and demonstrate them and publish the impact, again, coming from a product background, that that to me is something that could be really interesting.

Marion Baeli 52:18

Yeah. Absolutely. I'm collaboration and publication and sharing an open source. Yeah.

Will Richardson 52:25

And I'd agree with you with the more historical staid builders as well, they are quite slow to pick things up. To say the least.

Carl Gish 52:36

Well, they're not incented to do so. Right.

Will Richardson 52:39

But they're not pushed through by our politicians.... You know, politically, they're not pushed into it.

Carl Gish 52:42

They're not pushed to politically?

Will Richardson 52:44

And that's, that's actually a crying shame

Carl Gish 52:47

And the market doesn't reward them, really. So why would you

Will Richardson 52:49

Marion, Do you think we're going to see retrofitting become more mainstream? Do you think it's something that homeowners rather than developers might invest in more? Or do you think we need to have that political inputs, you know, a cash injection from etc.

Marion Baeli 53:08

So both, I mean, the thing is, wherever there's a financial opportunity, you'll see people rushing towards it. So for sure, there is a lot more interest in retrofit than they used to be 10 years ago when I started to get interested in it. So yes, there's lots lots of interest. We need absolutely many, much, much more policies and incentives to drive retrofits, there's many countries who are giving a lot more tax credit or other methods to, you know, incentivize people to carry out their retrofits. So we need that to make to make a big rollout. Yes, we're definitely a long way from, you know, mass retrofitting the country in the next five years as or, you know, by 2030 years we should really be doing. So we absolutely need to do it. I mean, you call refer to the operation of homes to be responsible for about 26 or 28%, I think you said of a global climate, carbon emission, but all together, the construction industry, including processes is responsible for 40%. So as a construction industry as a whole, we have an enormous responsibility. So therefore, anything we build new needs to be made with regenerative material like cars, timber houses, and to super low energy, so certified power to pass and all the existing stuff needs to be decarbonized. So that's really the the mandate that we need to absolutely implement and apply as, as quickly as possible. With hopefully more policies and interesting people trained. We're also lacking skills a lot and we need to try In trainers who could train trades,

Will Richardson 55:02

what Marion's just said, Carl, does that resonate with you in the US is a similar picture.

Carl Gish 55:07

I won't speak for the US,

Will Richardson 55:10

California then.

Carl Gish 55:13

Although sometimes I would like to, but I will speak for us at Aro Homes. And I 100% agree. And I can appreciate despite not being a builder, or an architect, per se, by, by whatever trade that the situation in the UK, particularly with the Victorian homes that are quite solid and quite old, just replacing those is not it's not a viable solution. And so retrofitting is essential. I can totally appreciate that. And I'd say, you know, the point Mary made degrees of retrofitting. So in the US, and I believe in the UK, well, I think you have a 5000 pound rebate or something from putting in heat heat pumps, we have the equivalent here in the US, and people aren't doing it. I was just looking at some data the other day that even in new home construction, I think I mentioned only about 40 something percent of new homes are being built with heat pumps. And some of that is geographic, but even in places like California where airbase Heat pumps are perfectly appropriate, it doesn't people are still doing it, although in California now, government mandates homes, homes we build are all electric, they have to be new homes have to be all electric. There's no more gas. And maybe that is some of that is required. And I think it's a it's a Marion's point it's a combination of solutions and approaches, again, because the the situation didn't happen overnight. It's taken decades, centuries even. And it's massive. It's going to take a lot of work and a lot of effort and a lot of a lot of different solutions to get the reference.

Will Richardson 56:48

On that notes. Thank you both very much for coming on the podcast and talking to us at Sustainability Solved. If Have you got any, any questions or have you anything to add to what you said already?

Marion Baeli 57:08

No, I think you know if if people listen to Carl and build only as as he builds and and the others retrofitted their houses I think will will be a long way to making a huge difference for the industry. So yes, I hope it in inspires people to to make a difference. And that is possible.

Will Richardson 57:30

Brilliant. Thank you. Thank you. Thank you both. Very welcome. Thank you for having us. And that's it for this episode of Sustainability Solved, the sustainable business podcast. Thank you to my guests Carl Gish and Marion Baeli. I'm Will Richardson at Green Element. For more information on Green Element and everything we've discussed today. Please check the show notes. And if you have any feedback or questions you can get in touch with us at Green Element on social media. And don't forget to follow this podcast in your favorite app. Please do write us a review. Thank you so much. And see you next month.