Net Zero Terrace Streets FAQ

Yes, absolutely. A street-by-street approach provides the scale that investors and government funding bodies look for, which individual borrowing for separate houses does not achieve. It allows infrastructure to be installed and paid back over the long term, reduces costs for everyone through economies of scale, and avoids the disruption of endless builders coming and going for years as different houses are upgraded piecemeal.

This approach is also place-based, focusing on specific streets or communities. This allows it to integrate with other local schemes and funding opportunities. For example, we’d like to test this model within the place-based frameworks used by Combined Authorities.

An additional advantage of this approach is having a single local entity to manage the whole process. This significantly speeds things up and removes the burden of organisation from individual homeowners, who would otherwise need to coordinate with multiple contractors themselves. And let’s be honest—many of us struggle to take action when it comes to improving our own individual homes.

Fairer Warmth is currently available and actively used in several communities. For more information, visit www.fairerwarmth.com, where you can also get in touch to request a demonstration.

The NZTS proposal aims to complete all the homes in one comprehensive effort rather than adopting a phased approach where solar and monitoring are done first, followed by retrofits, and later boreholes and heat pumps. This "One-Touch" approach focuses on decarbonising heating while delivering affordable, warm, and healthy homes with minimal disruption to residents.

Although the work will be carried out in stages along each street, it will be done within a tight timeframe. This ensures that any disruption to individual households and neighbours is limited to a single, focused period. Completing several houses simultaneously helps reduce overall disruption, as contractors can work efficiently within one street or locality, with tradespeople progressing sequentially from property to property. This method is similar to other area-based schemes, such as those installing windows, external wall insulation (EWI), and solar panels across entire streets. The work will be carefully planned, progressing house-by-house, street-by-street, and substation-by-substation, but not all homes will be worked on simultaneously to avoid overwhelming suppliers.

For the three demonstrator homes, monitoring will continue for five years after the work is completed. Future schemes will incorporate ongoing monitoring throughout all phases of the work as it scales up. This will ensure the system operates effectively from installation through its lifecycle. Monitoring will integrate with the Smart Local Energy System to detect issues such as high humidity, poor air quality, or low temperatures. If problems are identified, an Energy Champion can check in with the household to address the issue.

The Local Authorities guide is an ongoing project that draws on everything we have learned throughout the initiative. It will include insights from key areas such as area mapping, stakeholder engagement, procurement, and legal and financial tools to support local authorities implementing the scheme, either independently or in partnership. It will also incorporate lessons from the demonstrator process in both local authority and landlord contexts, offering practical guidance on integrating these elements into the scheme.

This project is funded until November 2025, and we aim to complete the guide by September 2025.

The guide for local authorities will look at a number of different areas and engagement is a large part of that. We'll be taking learning from our process with the demonstrator homes and our engagement with residents, businesses and landlords both with respect to the demonstrator works and their appetite towards the works being carried out in their own homes. In addition, we're engaging with people to see what would appeal to them and how we can support this in shaping our project. Targeting your terraced properties will be another section of the guide and we will explore the options to do this which will feed into street heat loop viability and the overall NZTS manual. This is something we'll continue to look at for the duration of the project.

When someone moves into a NZTS home, they will find a ground source heat pump heating system connected to a shared borehole ambient loop. This system includes a hot water tank, standard radiators, and other familiar heating elements. Buyers will have received detailed information about this system in the property documents prior to purchase, including details about the standing charge. This setup is similar to moving into a house with a gas boiler and paying a gas standing charge.

Residents can choose to stay with the NZTS electricity provider, which offers membership to the energy club. This membership allows them to benefit from automated flexibility services that can help lower their bills. To support new residents, they will have access to the Fairer Warmth App or can request a visit from an Energy Champion to learn how to use their system effectively. As with any house move, they will also receive the necessary paperwork to set up payments, as the outgoing customer will have notified the local company of the change. Additionally, an information pack will be provided to the new homeowner, including contact details for the local company to ensure a smooth transition and a clear explanation of the system's benefits.

We are still in the process of determining whether a disconnection fee would apply for residents wishing to leave the system. Resolving these details is part of the comprehensive NZTS package, which focuses not only on developing the technical solution but also on creating a seamless and replicable customer journey for implementation in other areas.

A geological survey is conducted in the area to determine the type of material in which the borehole will be drilled. Test boreholes are drilled to measure heat transfer, helping us identify the required depth of each borehole and the amount of heat that can be extracted per borehole. Different geological materials have varying heat transfer characteristics—for example, granite typically has a higher heat extraction rate than less dense materials. This analysis determines the number and depth of boreholes needed.

NZTS uses existing data to identify areas suitable for implementing a project, considering factors like geological characteristics and heat extraction potential. Another key consideration is the potential for encountering aquifers, which can produce significant amounts of water during drilling. In some regions, coal board surveys may also be necessary to ensure safe and effective planning.

We are currently working this out as part of our Techno-Economic and Finance model. At the moment, we are modelling scenarios for 100 and 1,000 homes, with multiples of 1,000 phased in over time.

As we scale up from smaller pilots to larger projects, we will identify the best balance between achieving economies of scale and maintaining a high-quality, friendly service. This also includes ensuring that the supply chain can handle the scale without being overstretched. There will likely be a “sweet spot” for viability, but we don’t yet know exactly what that is.

Yes, we have developed a method to identify potential NZTS zones, which can then be prioritised through a screening process within a local authority area. This has already been applied in Rossendale and is underway in Bridgend.

The process begins with identifying outline areas, followed by gathering improved data through local engagement and research, including sub-station areas. The next stage involves running the data through the Techno-Economic and Financial model to target the best "go-early" streets where there are likely clusters. This is followed by testing uptake using the NZTS Reach, Retain, Engage methodology.

It is not necessary for an area to have a Local Area Energy Plan (LAEP) in place. However, areas with existing LAEPs could overlay the NZTS Planning Approach for a more granular effect. This would likely highlight terraces that fall outside Heat Network Zones but are also not identified for Air Source Heat Pumps—potentially "left behind" areas with hard-to-treat homes. Ideally, Heat Network Zoning policy would evolve to accommodate more modular approaches like NZTS, enabling efficient heat decarbonisation through an area-based strategy.

Councils commissioning a Local Area Energy Plan can also ask their LAEP provider to include areas suitable for the NZTS approach—e.g., shared borehole GSHP systems combined with retrofit and smart local energy systems. If this is of interest, please contact us for further details.

Yes, we recognise that scaling the scheme could present challenges in meeting electricity demand, which is why we are actively collaborating with Electricity North West (ENW). This partnership spans several initiatives, including projects funded through the Strategic Innovation Fund (SIF) Discovery and Alpha phases, as well as the Network Innovation Allowance (NIA).

One key area of focus is the planning process, which involves identifying suitable streets and assessing the available headroom on local substations. Additionally, we are working on integrating various energy management systems, including the home energy management system, the community energy system, and the smart local energy system, with the DNO's infrastructure to ensure seamless coordination.

Looking ahead, we are excited about the construction of a test rig, scheduled for completion in 2025. This rig will enable us to trial these innovations and refine our approach, ensuring the scheme is robust and scalable as it progresses.

We are actively addressing these concerns in collaboration with Electricity North West, our local Distribution Network Operator (DNO). Through a separate funding stream, the Network Innovation Allowance (NIA), we are developing a "smart system" designed to sit between the Home Energy Management system and the grid. This system will facilitate aggregation and balancing, helping to manage the diversity of demand and mitigate the impact of installing multiple heat pumps within the same substation area.

Additionally, we are adopting a planned, phased approach with DNOs. As clusters of properties are identified, detailed plans will be developed to address any necessary physical reinforcements required for the NZTS work. This planning process includes assessing thermal and voltage headroom on substations and resolving challenges on the DNO side to ensure the system operates effectively and sustainably.

The demonstrator homes are full houses, not flats. However, there may be flats in the terraced streets, particularly those located above shops or businesses. The scheme design will address the specific requirements of commercial premises, flats, and Houses of Multiple Occupation (HMOs). This includes considerations for technical measures, system controls, monitoring, metering, and billing, as these present distinct challenges compared to whole-house situations.

To address this, we have engaged the architecture firm Buttress to design the retrofit measures for the demonstrator homes. They are carefully considering the breathability of materials and incorporating additional ventilation measures to support the natural moisture management of traditional solid-walled houses.

Where there is uncertainty, such as determining the appropriate thickness of breathable internal wall insulation (e.g., wood fibre board, mineral wool, aerogel), a WUFI simulation could be conducted to ensure the retrofit does not compromise the building’s performance.

Post-retrofit, we will monitor temperature and humidity levels in the demonstrator homes for several years. Additionally, part of our ongoing support for households includes training and guidance to help them adapt to different ways of managing moisture and ventilation.

NZTS’s “one-touch” approach aligns with the principles of a whole-house retrofit by addressing multiple measures at the same time. This avoids piecemeal interventions, which can disrupt the building's fabric or lead to inefficiencies. The “one-touch” approach ensures all necessary measures, such as insulation, ventilation, and heating systems, are planned and installed together, delivering an integrated and comprehensive solution.

We do incorporate a whole-house approach in the design, even with a phased delivery. While a deep retrofit may not be completed immediately, the design team carefully considers potential future upgrades to ensure compatibility and minimise future disruption. This method balances the immediate benefits of the “one-touch” approach with the flexibility to accommodate further improvements down the line.

As with so many questions about heat pumps including ASHP the answer will be 'it depends' on the house, the current heating system and energy type, size, shape and condition of the house etc etc. NZTS borehole ambient shared ground loops are tackling homes where ASHP cannot easily be installed at scale due to space and grid constraints. The borehole ground source heat pump (GSHP) system provides greater efficiency than air source, but comes at a greater cost because of the boreholes and trenching costs. The overall NZTS solution ensures the home can be heated during cheaper periods and retain its heat through optimal retrofit, and that the community can flex - providing returns to them through cheaper bills by providing that flexibility to the grid.

Above all, each householder will set their parameters/needs for heat and hot water so they don't have to faff around switching things on and off so they can automate that flex through the Fairer Warmth App or working with their local Energy Champion to help set that up and keep checking it is working for them, their budget and their home.

The NZTS concept is primarily designed for the streets of Rossendale, where there is no space for a communal above-ground option. However, the model can be adapted for terraces with more space, allowing for options like a communal ASHP. While a communal ASHP might be more cost-effective in terms of upfront capital costs, its running costs for residents could be higher due to the lower coefficient of performance (COP) compared to a GSHP.

The retrofit measures are being designed to match the heat profile of the ground source heat pump (GSHP), and everything will be installed simultaneously as part of the NZTS package. This ensures that the property is warm and comfortable from the outset.

If residents choose to add further retrofit measures later, this could affect the coefficient of performance (COP) of the heat pump, potentially impacting efficiency and associated costs. However, with the smart system and technology in place, the system may be able to compensate and balance automatically. Additionally, changes in the property’s performance can be monitored through the Fairer Warmth (FW) app, enabling RVE to identify and address any issues.

At this stage, we do not anticipate this being a widespread issue, as the properties are expected to be warm and comfortable enough without the need for further retrofitting. This consideration will be communicated to residents early in the process to ensure clarity.

It is indeed a complex and critical operation. Managing this relationship is a key focus of our research and service design, and it has been developed alongside the physical model of the NZTS project. We will be testing customer needs through user research to refine the approach.

The customer relationship will be managed by a local delivery vehicle—a locally rooted organisation responsible for leading development, engagement, deployment (installation), and long-term service operations. The NZTS project is exploring the most suitable legal forms and governance structures for these organisations, ensuring they are non-profit or at least not solely profit-driven, and that they align with the values of an inclusive approach.

A national-level Community Interest Company (CIC) is likely to license the NZTS approach, handbook, IT platform, and tools, as well as the Smart Local Energy System, to the local delivery vehicles. The CIC will provide support, quality assurance, and a framework of specified standards and KPIs. This structure will ensure due diligence for investors, enabling schemes to scale by aggregating investment. Local companies will also be Heat Code compliant.

Operations and maintenance may be sub-contracted, but Community Energy Champions will play a critical role. As noted in the answer to the question about hand holding and providing proper support, Energy Champions will be part of the local delivery vehicle, with their role included as a development and operational cost in the modelling. This will form part of the Service Offer, ensuring that vulnerable residents and others receive proper support when needed.

The NZTS approach is not a "fit-and-forget" model. Continuous monitoring will ensure retrofit effectiveness, assess whether homes are warm and healthy (or cool during heatwaves), and support residents in using their new systems efficiently to reduce bills while meeting their needs. While the Smart Local Energy System is designed to automate as much as possible, trusted local Energy Champions will still provide hands-on support where necessary to complement the technology and build trust.

For example, as mentioned in the answer about proper support, we are learning from others—one heat pump company we interviewed told us their older customers sometimes need reminders in autumn to set their systems for winter. While the Fairer Warmth platform could provide seasonal reminders and instructional videos, Energy Champions will be available to step in if additional assistance is required.

A key focus of our approach is understanding the motivations of all stakeholders, including landlords, and involving them in shaping the process to make it more appealing and practical for them. Informed by this, we are developing tailored customer journeys with supporting processes for different groups, including owner-occupiers, landlords (e.g., single-property landlords, portfolio landlords, and HMO landlords), and renters (e.g., long-term renters, students, and HMO occupants).

With respect to landlords, they have a variety of motivations, including:

• Increasing the value of their property.
• Addressing issues like damp and mould.
• Improving tenant comfort and health.
• Ensuring tenants can afford to pay bills and rent.

Some landlords will want to act early to gain an advantage, while others may wait until regulations require action or more funding support becomes available. One of the main motivations we’ve identified is increasing property value. When EPC "C" requirements come into force, landlords with upgraded portfolios will see significantly higher property values compared to those with "E"-rated properties. This could also enhance their ability to leverage additional borrowing, whether to expand their portfolio or fund other works.

Landlords we have spoken to consistently emphasise the need for a streamlined, hassle-free process. To address this, a local NZTS delivery vehicle will take full responsibility for managing the works from start to finish. Once landlords are satisfied that the proposed measures are appropriate for their property, they won’t need to source contractors or arrange appointments themselves. Tools such as the NZTS Fairer Warmth App will also support this process by simplifying project management and ensuring clear communication.

As part of this, robust data and privacy protections are in place within the NZTS Fairer Warmth App and Platform. These ensure that all relevant data about a property is securely linked to the home, while landlords and tenants can only access information that pertains to them.

We are also exploring measures to protect tenants from disproportionate increases in rent due to property improvements. These efforts aim to ensure the benefits of retrofitting are shared fairly.

We are catering to varying levels of interest in the details, from basic information about planned works, warranties, and permissions, to more technical or scientific reasoning behind each measure. Some landlords will wait for the NZTS model to prove itself at scale before committing, while others will act as long as it gets them to EPC “C.”

Notably, while all these technologies are already proven individually, they have not yet been combined or applied at this scale.

It is also important to highlight the risks of delaying action. As we approach 2030 and EPC "C" requirements, demand for contractors is expected to rise significantly, alongside increases in the cost of materials. Acting now helps mitigate these risks, offering landlords a more cost-effective and timely route to compliance.

Although landlords don’t directly benefit from improved thermal comfort, they do gain from increased property value, happier tenants who are more likely to stay, and improved rental appeal.

As the project progresses, we will continue to research landlord motivations and refine our engagement strategies, recognising the significant number of terraced homes in the private rented sector.

Rossendale Valley Energy (RVE) has been building trust through a programme of energy advice and active community engagement, including recruiting local Energy Champions from the area. We are also conducting research and focus groups with local residents to better understand their concerns. This work builds on lessons learned from other successful schemes, such as Warm Homes Prescription and area-based programmes in Leeds and County Durham.

We are closely following research related to the Social Housing Decarbonisation Fund and other studies on trust and engagement. Additionally, we’re involved in inclusive research initiatives focused on a Just and Inclusive Transition. These explore the reasons why people refuse works, struggle to apply, or are excluded—particularly older or disabled individuals and those with special requirements. We are aware of past issues with mis-selling and poor installations in schemes rushed to meet funding deadlines or completed with inadequate attention to quality.

When pilot funding is secured for an entire street, we will be better positioned to share our approach and practices. Our scheme is designed to be inclusive, with a service model that provides a supportive, “handholding” customer journey. This is not a “fit-and-flee” model. Achieving high sign-up rates will be critical for advancing the scheme in terraces, alongside delivering excellent customer service, affordability, and long-term support.

We acknowledge the complexity of this challenge—if it were easy, others would have solved it by now. While we may not have all the answers yet, we are committed to trying. Our approach follows a "no Edge Cases" policy, meaning we design for all situations, not just the average, ensuring no one is treated as an exception.

Energy Champions will be part of the staff at the local development vehicle (local company), with their role included as a development and operational cost in the modelling. This will form part of the Service Offer.

We are learning from others—for example, a heat pump company we interviewed told us that every autumn their older customers call for a reminder on setting up the system for winter. They even pop in to help. This is the level of service we are designing.

The NZTS approach is designed to streamline engagement through staged steps: Reach, Retain, and Engage. This process guides residents along a journey, offering clear and consistent information, opportunities for discussion, Q&A sessions, virtual or physical tours of show homes, and ultimately an invitation to participate. This journey progresses through home assessments to a firm offer, culminating in a contract.

In parallel, updates are provided for each street, showing the percentage of residents who have signed up. Once critical mass is achieved, the project moves to the next stage. We’ve tested this approach in focus groups, receiving enthusiastic responses in some areas while raising many questions in others. We’ve also drawn lessons from area-based schemes, ranging from 48 to 1,000 homes, to understand what has worked so far.

While NZTS is still in its pilot/start-up phase, we recognise the need for more intensive engagement initially. However, as the approach becomes familiar, trusted, and more 'normal,' we expect the journey to become smoother. In some areas, a more digital engagement strategy may be effective, but in places like Bacup, a personal, face-to-face approach led by Energy Champions is essential. We are designing an inclusive process that accounts for different needs and ensures everyone feels supported.

As larger pilots are implemented, we will be able to refine and test this model across entire streets. We acknowledge that engagement, co-production, and after-care are critical and often underfunded elements of such initiatives. This is not a "fit-and-flit" model; instead, it involves establishing or partnering with trusted, effective, and non-extractive local organisations to deliver long-term success.

We are not tied to any particular investor at this stage (though if Legal & General are interested, we’d be happy to hear from them!). The project is still in the phasing and financial modelling stage, and the financing strategy is focused on proving the model’s suitability for long-term project finance investment. This approach aims to attract institutional investors who prefer reliable, long-term income streams. Current project return figures, which assume economies of scale to reduce costs, suggest this is feasible.

In the short to medium term, smaller initial projects will likely need equity funding from investors with social and green agendas. As the project becomes less risky and more commercially viable, infrastructure debt will be introduced and eventually refinanced by large, long-term investors.

We are currently developing the Techno-Economic and Financial model to “target seek” a standing charge that is affordable when combined with the electricity bill. Our target is that the combined costs to the householder (standing charge + electricity bill) should be no more than an average overall energy bill. Subsidies or grants will likely be necessary during the early stages to help achieve this.

The NZTS solution is designed to:

a) Improve the fabric of the home, making it cheaper to heat while ensuring appropriate ventilation.
b) Provide an efficient heating system that is up to 80% cheaper to run than an electric boiler.
c) Offer cheaper electricity through community-generated solar, a smart system, and access to flexibility and lower time-of-day tariffs.

It’s important to note that while these measures significantly reduce energy costs, they do not address the root cause of fuel poverty, which is poverty itself.

We are continuing to develop a range of financial scenarios in the model. Over the next year, we will publish these scenarios to provide more detailed cost breakdowns, but it is too early to share specific figures at this stage.

The NZTS project is currently funded through Innovate UK, but we are working towards a non-grant-dependent model. In the short term, grants will play a key role in completing the work. Over time, we aim to secure institutional investment to fund the installation, with homeowners repaying a connection fee or standing charge over a 40-year period.

We are still refining the project phasing and financial modelling, so it’s too early to provide exact return estimates. However, the financing strategy is centred on proving the model’s suitability for long-term project finance investment, targeting institutional investors who seek reliable, long-term income streams. Current return figures, which incorporate assumptions about economies of scale to reduce costs, suggest this approach is feasible.

The financial model is being developed to balance a mix of debt and equity funding, ensuring a sustainable and investable model for the long term.

The exact standing charge will become clearer as we refine the Techno-Economic-Financial model. If the charge is deemed too high, we anticipate needing subsidies during the early stages. These could take the form of a social tariff or area-specific vouchers, similar to those used in the Gigabit Broadband Voucher Scheme during the rollout of rural broadband, to reduce costs. Over time, as we achieve economies of scale, streamline delivery processes, and secure lower-cost investment, we expect to lower the standing charge.

See also: Are there any performance or financial guarantees for residents, such as assurances that bills won’t be higher after all payments are accounted for?

Providing guarantees for bill levels, such as those offered in an Energy Performance Contract, is challenging in areas where some residents in fuel poverty may not currently heat their homes or cook hot meals. However, performance guarantees will be in place to ensure a consistent level of heat and service standards for residents.

Our approach is to target a standing charge and expected electricity bill that are comparable to—or ideally lower than—the costs of gas central heating and standard domestic electricity use for a 2-3 bedroom terrace. To achieve this, we are exploring how vouchers or subsidies, such as aggregated Boiler Upgrade Scheme funding or social tariffs, can be applied effectively.

Through the Community Solar model and flexibility payments enabled by the Smart Local Energy System, we aim to generate surplus funds that can be used to support residents struggling with their bills. This approach ensures that those on very low incomes benefit from a warmer, healthier home, alongside an affordable heating and electricity system. By leveraging these surplus funds, we can help reduce energy costs further, including providing access to lower-cost power during key times, ensuring the system supports those who need it most.

The Local Delivery Vehicle will be responsible for recovering the standing charge in cases of non-payment. For social housing or properties owned by landlords, it is likely that this responsibility may fall to the landlord, as the fabric of the house will have been improved through the scheme.

However, this is an area that still requires further consideration. We are in the process of assessing the appropriate types of contracts, methods of payment, and the potential risks to renters. Particular attention will be given to ensuring that any approach is fair and does not place undue burden on social tenants or vulnerable residents.

The high-level funding model is that the local development vehicle raises capital to invest in the infrastructure i.e. retrofit, PV, boreholes, heat pumps and the householders pay a standing charge over the long term that pays this back.

Upfront at risk development capital before the main investment - i.e. the costs of scoping, feasibility, early engagement, active engagement and assessments, design and everything up to signing contracts will be ideally financed by investors in the long term. In the short/medium term this element is most likely to be funded by grants, or a grant/impact investor blend as we are in the pilot and learning and proving phases. Ultimately if we can make it grant-free eventually in phases, there will be a surplus into the national CIC that means they can kick start areas off.

We have also found that people are deeply concerned about their bills but value the ability to budget and have predictability, especially to protect against sudden cost rises, such as gas and electricity price hikes. The standing charge will be payable regardless of whether the heat is on or off. While electricity bills will vary based on heating use—lower if heating less, higher if heating more—we are working to ensure that the combined cost of the standing charge and electricity is no more than the cost of gas heating and average electricity use.

A key aim of the NZTS project is to ensure no upfront cost to residents. To achieve this, we will need to subsidise early installations until we reach economies of scale and streamline processes to make the system both affordable for residents and investable. Our initial financial model is challenging, but as we scale and refine it, we believe it is achievable. As we've noted in other answers, if this were an easy problem to solve, heat decarbonisation and retrofit investments would already be widespread. We aim to contribute to making this solution viable over time.

Yes, Mission Control is aware of NZTS. It was raised during a recent meeting by Kate Gilmartin, Director of Rossendale Valley Energy (RVE). Chris Stark was also briefed on NZTS before taking up his post and understands that the project addresses a range of issues, including technical, commercial, economic, governance, and engagement challenges.

We have not yet engaged with estate agents, mortgage providers, or insurance providers, but they are on our list for future outreach. We do not foresee significant challenges in this area, as the technologies and solutions included in NZTS are well-established. The novelty lies in their combination and integration within the smart local energy system.

Since the scheme does not involve individual loans or mortgage extensions, there is no liability concern for mortgage companies. Homeowners will, however, need to notify their insurers about the works being carried out, similar to standard procedures for any construction work on a property.

Regarding mortgage providers, the value of the home is likely to increase as a result of the improvements, presenting minimal risk to them