On Thursday 3rd April, Kamma Climate hosted a webinar with the Climate Change Committee (CCC) to offer a rare behind-the-scenes look at the data and decisions shaping the UK’s Seventh Carbon Budget for residential property.
Featuring Simon Rayner (Lead Built Environment Analyst, CCC), Orla Shields (CEO, Kamma) and Joe Webb (Chief Growth Officer, Kamma), the conversation unpacked the technical foundations behind the CCC’s residential emissions pathway – highlighting both the scale of the challenge and the realism embedded in their recommendations.
Quick summary:
- The CCC has released its pathway to net zero for the 7th Carbon Budget, calling for a 66% reduction in residential emissions by 2040 vs 2023 levels.
- Cost-effective retrofit pathways are central to the model, which prioritises pragmatic, ROI-led upgrades over expensive, difficult-to-implement interventions.
- The rollout of low-carbon heating systems, primarily heat pumps, remains critical yet challenging – requiring faster growth, strategic incentives, and electricity price reform to drive adoption.
- Major policy decisions remain in legislative limbo, risking delay and higher long-term retrofit costs across UK housing, despite recent progress on Minimum Energy Efficiency Standards (MEES).
- Improved building data and consumer-facing retrofit modelling are vital to scaling retrofit uptake without triggering backlash or inefficiency.
Watch the webinar video or read the summary below:
A sector-specific transformation: From individual properties to residential archetypes and back again
The residential property sector accounts for roughly 14% of the UK’s emissions in 2025. To meet net zero by 2050, the CCC model forecasts a 66% reduction in emissions from homes by 2040 (against a 2023 baseline) – equivalent to a 34.5 MtCO₂ cut. Achieving this will require sweeping, cost-optimised upgrades across a vast and varied housing stock.
Kamma’s contribution was pivotal to this work. Drawing on proprietary data and advanced modelling, Kamma built a detailed dataset covering 29 million UK homes through its advanced predictive modelling technology. These properties were categorised into 11,000+ distinct archetypes, with every property variables assessed for suitability and energy impact.
The CCC model: Cost-driven and context-aware
Rayner described the CCC’s approach as a “cost-optimising” model. For each archetype, the model uses Kamma’s data to select the best-suited, cheapest retrofit package that achieves the required emissions reductions, balancing upfront capital expenditure (CapEx) and long-term operational savings (OpEx). The model then sequences these interventions over time, accounting for real-world supply and demand constraints.
The result is a pragmatic roadmap, avoiding blanket prescriptions in favour of cost-effective, scalable solutions. For instance:
- Cavity wall insulation is targeted for 87% of eligible homes by the mid-2030s, as it offers significant returns.
- Solid wall insulation, by contrast, features in only 15,000 homes, given its high cost and long payback period.
Rayner emphasised that this shift from the Sixth Carbon Budget marks a deliberate move away from politically motivated modelling toward economically grounded planning: “This time we only included measures where they are genuinely cost-effective over their lifetime.”
Heat pumps: The unavoidable cornerstone needs incentives to drive adoption
The single largest contributor to decarbonising homes remains the transition to low-carbon heating. The model anticipates that 80% of UK homes will rely on some form of heat pump by 2050, with the remainder covered by heat networks or direct electric heating.
Yet, this transition faces critical headwinds. Unlike electric vehicles, which are approaching cost parity with internal combustion engines, heat pumps remain more expensive than gas boilers. Retail electricity costs – heavily loaded with levies – continue to deter adoption, even where heat pumps would offer superior long-term performance.
“The heat pump rollout depends on reforming electricity pricing,” Rayner noted. “We’ve seen much faster adoption in other European countries where electricity is cheaper. If it costs more to run a heat pump than a gas boiler, the market won’t move.”
This is a surmountable challenge. The CCC’s forecast is based on reaching a 42% annual growth rate in installations – which many neighbouring EU peers have achieved, proving it is possible. Crucially, this also does not require replacement of fossil fuel heating systems outside of their natural replacement cycle. As long as homeowners and landlords start to replace failing boilers with heat pumps, net zero remains achievable.
Beyond tech: Hearts, minds, and incremental journeys
Throughout the discussion, the need to win consumer trust emerged as a recurring theme. Shields pointed to the danger of “Big Bang” retrofit proposals: “If the first conversation is about spending £50k, people will do their kitchen instead.” Instead, both Kamma and the CCC advocate for a sequenced, ROI-led approach – starting with easy wins and moving towards full decarbonisation over time.
The CCC’s model supports this view, showing that households can begin to see OpEx savings exceeding CapEx investment from 2040 onwards – especially when measures like solar PV are layered into retrofit journeys.
Data-driven decisions: The shift to outcome-linked policy
Several upcoming regulatory developments could reshape how retrofit is financed, regulated and prioritised:
- Future Homes Standard: Expected to ban gas boilers in new builds by 2027, but with concerns over a prolonged transition period.
- Minimum Energy Efficiency Standards (MEES): Likely to be raised to minimum EPC C by 2028 for new PRS tenancies, and 2030 for all, though with greater focus on fabric efficiency and emissions rather than cost-based EPC scores.
- Home Energy Model (HEM): Supported by both Kamma and the CCC, this new model will shift metrics toward carbon outcomes and demand flexibility – enabling more targeted, dynamic policy interventions.
HEM won’t fix the flaws associated with EPCs immediately, however, as Shields noted, “HEM is far more nimble and policy-flexible than EPCs. But it can only be applied to new assessments for now – leaving a data gap for the rest of the market that we must continue to close.”
Conclusion: Retrofit at pace, but with precision
The Seventh Carbon Budget affirms a critical truth: net zero is not only legally binding, but it is achievable and affordable, with Opex savings offering net benefits over Capex investments by 2040. Our route there, however, remains under threat.
The CCC’s modelling offers a roadmap grounded in economic realism and technological pragmatism. It favours incremental, justifiable steps over idealistic leaps – and supports a retrofit model that is data-led, consumer-sensitive, and cost-aware.
With so much at stake, the clarity offered by the Budget is welcome. The question is no longer whether we need to decarbonise our homes, or how to do so, but whether industry and government can move with sufficient pace, precision, and purpose to match the pathway laid out.
Want to learn more about how to drive decarbonisation decisions among homeowners? Read about of retrofit journey optimisation tool or book a consultation now.
