Assessing the profitability of energy-efficient houses: a business perspective on photovoltaic, air source heat pumps, double glazing and insulation

Improving residential energy efficiency is essential to meeting UK net-zero targets, yet retrofit uptake in the private rented sector (PRS) remains limited. While many studies examine retrofit measures or Energy Performance Certificates (EPCs), few integrate comparative technology performance, cost–benefit outcomes, and landlord–tenant perspectives within a single housing context. This paper addresses that gap through a mixed-methods case study of a professionally managed private rented housing portfolio in South London, assessing four retrofit technologies: photovoltaic (PV) panels, air source heat pumps (ASHPs), double glazing (DG), and insulation. Quantitative analysis showed that ASHPs delivered the greatest EPC improvement, with 54.5% of properties achieving a two-band uplift, while PV panels offered the strongest financial return, with an average payback period of 11.7 years. Houses achieved the strongest overall results, with combined PV + ASHP retrofits delivering the best technical and financial performance; however, this pairing was only feasible in houses because of the physical requirements for both roof space and external unit installation, whereas flats and maisonettes were more constrained by space and installation feasibility. Stakeholder analysis findings revealed knowledge and incentive gaps: many tenants overestimated the effectiveness of double glazing, while landlords identified high upfront costs and delivery challenges as key barriers. Wider PRS decarbonisation will therefore require stronger policy support, streamlined retrofit delivery, and improved tenant awareness.