Richard Berridge talks to Cerys Williams of Sero Group, to discuss initiatives, projects, and technologies that are designed to accelerate the push towards a carbon zero future.
Cerys, thanks so much for taking time out of your busy schedule to talk to me. Tell me a little about you, your background and your role at Sero?
I joined Sero as a Project Coordinator back in 2019, fresh after nine months of maternity leave! I’d been running a busy city centre estate agency for five years but when my son was born, many aspects of my life changed as you can imagine! Notably, my job satisfaction. If I was going to leave my baby for eight to ten hours a day AND pay a hefty sum for his care, it had to be worth it. The hustle and bustle I’d been used to no longer appealed, neither did the unsociable hours. But most of all, I wanted a job that would make a positive change to my son’s future. Once I was introduced to Sero, I knew it was the right fit for me. An ethical Welsh company that strives to make net zero affordable for everyone regardless of tenure. Where do I sign!?
Since then, my role and responsibilities have grown, and I am now Sero’s Finance Partnership Manager. I engage with multiple financial institutions to work with them in; understanding their current lending book’s decarbonisation journey, identifying opportunities to build retrofit incentives into green mortgage products, raising decarbonisation awareness across the industry as well as to consumers, enabling them to comply with legislative and reporting obligations though granular property, carbon emissions and cost data.
I’ve known about Sero for a while now and have always been impressed with what you do. But for many in the Build to Rent sector you fly a little under the radar. Tell me about the company and some of the projects that Sero are involved with.
Sero was founded in 2017, delivering services to enable the decarbonisation of new and existing homes, using a mix of smart energy management and renewable technologies (such as solar panels, battery storage, heat pumps and EV charging), reducing both the carbon footprint and energy bills for each home. As well as designing and project managing the retrofit process, Sero also provides ongoing energy services to residents, who can manage the comfort of their home using the smart Sero Life app.
We’ve also been at the forefront of many ground-breaking innovation projects, such as Fixed Level Affordable Tariffs Linked with Intelligently Networked Energy (FLATLINE) project. It was the UK’s largest domestic demand side response trial and demonstrated how, using batteries in conjunction with smart energy management systems, demand from homes could be ‘time-shifted’ to better align with energy generation. The trial’s 20 new build homes in Wales were installed with solar panels, battery storage, hot water tanks and ground source heat pumps. Residents entered their lifestyle and behavioural preferences into a bespoke ‘Sero Life’ app, enabling the energy system’s software to forecast and demand-shift, using factors like weather and behaviours to inform its algorithms. The systems then intelligently drew, discharged and anticipated energy demands, almost completely avoiding the National Grid at peak times, keeping carbon intensity to a minimum. The system also reduced energy expenses through a combination of buying energy at cheaper times and opening up the benefits of grid balancing payments.
Valuations And Lending Underwriting Energy Reduction (VALUER) project sought to evidence value differences between high and low energy homes. During the two-year project, Rightmove followed 200,000 property transactions and the project was able to clearly identify a correlation between improvements in energy efficiency made to the home through retrofitting and an increase in resale value in excess of market trends. The project also tracked consumer appetite for green features within property listings, highlighting a growing demand for homes with measures such as solar panels, heat pumps and EV chargers. It also featured the UK’s first mortgage product to recognise low energy bills via Monmouthshire Building Society, enhanced green valuation tools from Rightmove, as well as Red Book updates to support surveyors in accounting for energy efficiency measures by the Royal Institution of Chartered Surveyors (RICS).
Following the success of FLATLINE, Equitable Novel Flexibility Exchange (EQUINOX) addresses the challenges facing distribution network operators with domestic heat pump flexibility. If we meet UK targets of 600,000 heat pump installations per year by 2028, the network may require significant reinforcement to manage the increased demand. EQUINOX is trialling how homes can be part of the solution, by reducing or shifting electricity demand during peak times. EQUINOX will trial how we can leverage flexibility from heat, whilst maintaining comfort for customers and network reliability.
We recently met in Cardiff at a project where Sero collaborated with Wates to produce energy efficient homes. What are the key features of the scheme, what extent did Sero influence the outcomes, and will you have an ongoing involvement with the scheme?
Aspen Grove is an innovative development located in Rumney, Cardiff and is a collaboration between Cardiff Council and Wates Residential. Sero were brought in to incorporate low carbon technologies into all the homes which are made up of:
- 149 two-, three-, four- and five-bedroom houses for sale.
- 21 houses for affordable rent.
- 44 sheltered accommodation apartments, part of Cardiff’s Community Living Strategy.
All homes at Aspen Grove benefit from ground source heat pumps, smart thermal storage, electric vehicle charging points, solar panels, batteries and smart controls for residents. In addition to orchestrating the technologies installed, Sero also provide an innovative grid energy control network that will intelligently draw, discharge, and anticipate energy demands, managed by the residents through the Sero Life app.
Not only are these homes cleaner and greener, forecast to be net zero carbon by the mid 2030’s with no retrofit works required between now and then, the residents benefit from significantly lower energy bills and have been somewhat protected from the recent volatility within the energy market due to their ability to generate and store their own energy.
Aspen Grove is a shining example of how net zero ready homes can be provided at scale regardless of tenure.
Energy management is quickly becoming a must have for renters. I know that Sero have invested a great deal in technology, so could you explain how the Sero-tenant interface works and what sort of savings you can help renters make?
For residents within homes fitted with a Building Energy Engine (BEE), they can access Sero Life’s comfort as a service model. Where the BEE is also connected to renewable technologies within the home, Sero Life can ensure optimum outputs based on resident inputs.
To remove the complexity of understanding low carbon technologies such as when to fire a heat pump, Sero Life simply asks the resident what temperature they would like each zone of their home to be and when. With this information, we calculate the optimum time to run their heating system based on external factors such as weather, grid carbon intensity, and electricity pricing aligning to the resident’s predefined comfort preferences.
Do you think the Sero platform is equally at home with Build to Rent and single-family housing (SFH)? Or does SFH offer greater opportunities for renter energy saving?
Sero’s innovative services have been implemented within homes across multiple tenures, from homeowner occupied to private and socially tenanted. We definitely see an opportunity within both Build to Rent and SFH developments for greater resident comfort along with reduced energy costs. There are several differentiating factors between how the solutions would be implemented across either Build to Rent or SFH, for example:
Build to Rent tends to offer apartment living with communal spaces, which in terms of the building’s fabric means it’s considered as one single entity. By that I mean, all residents share a roof so any solar applied would be shared among all residents etc. All external walls are shared so insulation would need to be consistent throughout.
That being said, solar sharing is greatly beneficial to all residents and is possible on both sides of the electricity meter (whether the apartment has its own meter or there is a main meter and apartments are sub-metered). When coupled with a battery so the resident can defer use of the stored energy, energy bills will see significant reductions as will their carbon emissions. Moreover, the move to electric powered heating systems (of which Sero are massive advocates of heat pumps) provide further opportunity to consume self-generated electricity and therefore minimise the reliance on the grid.
Communal areas can also be powered by energy generated by the building, which would see running costs to the landlord decrease.
The SFH model is more aligned with a community of individual homes, each with their own private spaces rather than sharing communal areas. In this case, each of the homes would have their own roof to utilise solar so any gains could be retained by them alone. There are generally no additional shared spaces to share energy efficiency gains within SFH, the residents are in control of their own homes.
Developments like Parc Eirin in Tonyrefail and Aspen Grove in Cardiff are great examples of how Sero’s solutions and resident platform can be utilised by both the Build to Rent and SFH sectors. There has been a clear shift towards renters seeking more energy efficient homes, for multiple reasons such as the increased awareness of our climate emergency and the impact both the energy crisis and cost of living crisis has had on how people live in their homes.
We have previously discussed Sero’s work in local authority housing and with housing associations. In general terms, what are they looking to achieve by collaborating with Sero?”
When local authorities and housing associations approach Sero, they do so for a multitude of reasons. Sero can answer many of their complex housing issues, from modelling the decarbonisation of their entire stock from now until 2050, to creating individual retrofit plans to sit beside planned maintenance works. Streamlining works generally reduces cost which is a big tick in their book. Planning for retrofit measures also allows the landlords to prepare the residents, providing them with plenty of advice, information, and notice about what changes they can expect to see over the coming years.
Sero are working with an increasing number of social landlords who are keen to explore innovative ways of addressing the need to retrofit their homes. A major factor in all retrofit projects is cost, but with Sero’s hardware and software solutions, we’re able to trial capital repayment mechanisms with the landlords, which makes the implementation of low carbon energy efficiency upgrades viable. This in turn benefits the resident through increased comfort and reduced energy bills. Additionally, when a home is being properly heated and ventilated, it reduces the risk of fabric deterioration which can lead to damp and mould. When tenants can afford to heat their homes, it has an inadvertent positive impact on the property, which can mean fewer reparative costs for the landlord.
A key question in both Build to Rent and SFH is how to recoup the capital cost of installing PV’s, heat pumps, energy storage and management etc (hardware and software). Given the cost-of-living crisis, trying to recoup the additional cost of energy efficient tech’ through increased rents seems unworkable in real terms. However, Sero have a unique solution to this which you’ve employed with some of your clients. How does this work, and have you seen positive results from it?
Sero have been trialling some innovative ways of recouping the capital cost of implemented retrofit measures within the social housing sector. The Penderi Energy Project is a flagship scheme being delivered in collaboration with affordable homes developer Pobl Living, contractor Everwarm and Sero. The project will see 644 social rented homes in a Swansea community generating as much as 60% of their total electricity requirements, lowering energy bills for residents by up to 30%, and reducing carbon emissions by as much as 350 tonnes per year. All homes across the development are being fitted with batteries and solar panels (where their roof is appropriate), with the generated solar sold to residents at a below market rate generating an income for the landlord. The benefit will also be socialised to homes without solar panels through the comfort bill.
As you know, I’m a big fan of what you guys at Sero do. So, what’s the five-year plan? Where do you hope or expect the company to be five years from now?
Since Sero was founded in 2017, we’ve grown to a team of around 80 and that’s set to increase significantly over the next five years. With that growth, we aim to expand the delivery of our services across all tenures. Our main ambition is to unlock a net zero carbon future for everyone. We understand the journey to a more sustainable way of life looks different for each individual, but we believe the move to decarbonise the way we live shouldn’t mean a compromise in comfort or cost.
I know the Welsh Government has been supportive of energy efficient goals. What more do you think the UK Government should be doing to increase energy efficiency in both existing and new build homes?
I’d say the Welsh Government are at the forefront of the UKs drive to net zero. They’ve launched multiple innovative decarbonisation competitions, and we have been extremely fortunate to have benefitted from opportunities such as the Innovative Housing Programme, Optimised Retrofit, and more recently the launch of the Welsh Zero Carbon Hwb.
I’d say the push needs to come from central government in the form of clearer legislation such as MEES, as well as responding to consultations such as Improving home energy performance through lenders which closed in February 2021 and is yet to receive an official response. This period of limbo we find ourselves in can be confusing to all stakeholders, from lenders and financial institutions to landlords and homeowners alike.
Though I see incentives as an important element of accelerating the adoption of energy efficiency improvements and low carbon technologies, I don’t believe the public purse should be responsible for funding all retrofits. It’s simply not sustainable given the 29 million UK homes that need to achieve net zero carbon by 2050. However, early adopters should be applauded for dedicating themselves to improving the energy efficiency of their properties and this should include Build to Rent and SFH landlords.
Finally, as you know, my professional passion is for purpose built, professionally managed rental housing. What more can the Build to Rent and SFH sectors do to lead the way in creating sustainable, highly efficient homes in the UK?
Consumer appetite for more energy efficient homes is rising, failing to keep pace with renter expectations could impact both the rental value as well as the property’s appeal. A recent study by L&G and YouGov found that renters are willing to pay a 13% premium for a low carbon property. By offering high quality energy efficient homes, Build to Rent and SFH providers are safeguarding their portfolios for the future – as well as actively mitigating high churn rates and extended void periods.
Additionally, Rightmove recently published that ‘bills included’ was now the number one searched for term when renters were seeking their next home. Given the managed nature of Build to Rent and SFH rental offerings, it seems like a natural progression for them to offer inclusive or discounted energy bills.
“Thanks Cerys. As always, it’s been an incredibly insightful discussion.”
Richard Berridge, BLACKBIRD RE Advisory
