RetroMeter is a project to provide and demonstrate a consistent methodology to accurately meter the energy and cost savings of retrofit energy efficiency measures – unlocking pay-for-performance financing, increasing uptake and leading to reduced costs for consumers and additional flexible services for the Distribution Network Operator (DNO).

RetroMeter was first awarded funding through Ofgem’s Strategic Innovation Fund (SIF) Round 2 Discovery Phase. Energy Systems Catapult began delivery of this project in April 2023 alongside partners Electricity North West, Energypro Ltd, Carbon Co-Op and Manchester City Council.

This project is funded by energy network users and consumers through the Strategic Innovation Fund, a programme from the UK’s independent energy regulator Ofgem managed in partnership with Innovate UK.

The Challenge

With electricity demand from homes set to double by 2050, DNOs are faced with a significant capacity problem, leaving networks either to reinforce the network in constrained areas or procure flexible services such as end-user energy efficiency.

Energy efficiency is considerably more attractive for consumers with home retrofit measures providing health and comfort benefits in addition to reductions in volatile energy bills. Historically, however, high capex has hampered consumer investment in residential retrofit, leaving them reliant on limited subsidy programmes or supplier obligations seen as a regulatory requirement rather than a business incentive.

The Innovation

Established ‘pay-for-performance’ (P4P) schemes in the US offer a compelling alternative solution. In using advanced Measurement and Verification (M&V) techniques to accurately baseline energy usage, aggregators sell pooled savings from retrofitted homes to long-term finance providers in return for upfront investment in the cost of retrofit.

This spreads the consumer’s costs, enabling them to experience the multiple benefits of energy efficiency upfront; meanwhile the finance provider generates returns through savings.

This approach – Metered Energy Savings (MES) – could unlock massive investment in UK retrofit and has been subject to considerable sector attention including from the Green Finance Institute (GFI) and BEIS.

The Approach

RetroMeter has now been awarded funding for the Alpha Phase which will further develop the methodology for measuring energy savings, and prepare for the first MES demonstrator project in the UK, piloting baselining methods and verifying savings in a live retrofit scheme in Manchester.

This project addresses SIF Round 2, Challenge 4: Accelerating Decarbonisation of Major Energy Demands: Improving energy efficiency at all levels in the system.

Dr. Steve Fawkes, Managing Partner of ep Group, said:

“We are very pleased to be part of this project which will lead to the first real-life application of metered efficiency in Europe. Metered efficiency is the innovation that could remove many of the barriers to increasing investment into energy efficiency, something that we need to do to hit our net zero and energy security targets.”

Emma Harvey-Smith, Programme Director, Green Finance Institute, said:

“Innovation is vital to support the retrofit market to scale at the pace required to upgrade the UK’s energy inefficient homes. Metered Energy Savings were a key recommendation to help increase energy efficiency upgrades and we’re delighted to see Ofgem supporting a project that could boost both consumer and investor confidence in retrofitting.”

Rebecca Sweeney, Business Leader for Homes at Energy Systems Catapult, said:

“Retrofit levels in the UK continue to remain stubbornly low despite the benefits it can deliver to households and to the wider energy system in the form of reduced energy bills and reinforcement costs. Evidence routinely indicates how this impacts the most vulnerable in society more than any other group, making it imperative that we act to enable a fair and just transition to Net Zero.

“The RetroMeter consortium will tackle these barriers to retrofit in an attempt to deliver and demonstrate the effectiveness of a consistent methodology to meter the financial and energy savings brought about by retrofit measures. Until we have in place a robust, industry-wide methodology for measuring the effectiveness of MES, industry and policy will continue tinkering around the edges. We’re hopeful that the work we are doing alongside Electricity North West, EP Group, Carbon Co-op and Manchester City Council will deliver for consumers and networks alike.”

Victoria Turnham, Head of Network Innovation at Electricity North West, said:

“We’re really pleased Ofgem has recognised the potential of this project and awarded us funding to explore it in more detail. We recognise the importance of making retrofit energy efficiency measures more appealing and attainable for our customers. We’re one of the most digital electricity networks in the world and we’re constantly looking at ways to operate more smartly and efficiently. This project could provide real benefit to customers in the North West and I look forward to seeing the results.”