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Thermal Insulation - UK - August 2019

“Growth in demand for retro-fit building thermal insulation measures is expected to remain moderate over the next five years, unless the government provides new incentives to boost take-up. The recently announced £5 million Green Home Finance Innovation Fund aimed at accelerating the financial sector’s offering of green mortgages is hoped to help stimulate the ‘able-to-pay’ market. The housebuilding sector is also anticipated to continue to provide a positive impetus for building thermal insulation demand.”

- Claudia Preedy, B2B Analyst

This report will look at the following areas:

  • Action on home energy efficiency is required at significantly greater scale for UK to reach net zero carbon emissions by 2050
  • Government announces new policies in July 2019 in a bid to help cut costs of home retro-fit measures and boost retro-fit installations

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • Cuts in government energy efficiency schemes supress growth in thermal insulation market
              • Figure 1: The UK market for thermal insulation, by sector, 2014-18
            • Building thermal insulation sector returns to moderate growth in 2018
              • Figure 2: UK market for building thermal insulation, by type, 2018, (£ million)
            • Demand for industrial thermal insulation shows moderate growth
              • Sustainability, thinner materials and easier installation are key focus of product innovation
                • Market growth expected to remain modest
                  • Figure 3: Forecast UK market for thermal insulation, by sector, 2019-23
                • Companies and brands
                  • Major manufacturers invest in UK plants
                    • The consumer
                      • 58% of homeowners would pay more for a high energy efficient home
                        • Availability of ‘green mortgage’ products would encourage just over half of homeowners to improve the energy efficiency of their home
                          • What we think
                          • Issues and Insights

                            • Action on home energy efficiency is required at significantly greater scale for UK to reach net zero carbon emissions by 2050
                              • The facts
                                • The implications
                                  • Government announces new policies in July 2019 in a bid to help cut costs of home retro-fit measures and boost retro-fit installations
                                    • The facts
                                      • The implications
                                      • The Market – What You Need to Know

                                        • Cuts in government energy efficiency schemes supress growth in thermal insulation market
                                          • UK building thermal insulation sector returns to moderate growth in 2018
                                            • Industrial thermal insulation market up by an estimated 1% in 2018
                                              • Market growth expected to remain modest
                                              • Market Size

                                                • Overview
                                                  • Reduced government funding for energy efficiency schemes exacerbates decline in UK thermal insulation market
                                                    • Figure 4: The UK market for thermal insulation, 2014-18
                                                    • Figure 5: UK Market for thermal insulation, 2014-18
                                                  • Building thermal insulation represents vast majority of market
                                                    • Figure 6: Segmentation of the UK market for thermal insulation, by sector, 2014-18
                                                • Market Segmentation

                                                  • Building thermal insulation
                                                    • Frequent changes to home energy efficiency policies have resulted in a stop-start retro-fit market
                                                      • UK building thermal insulation sector returns to moderate growth in 2018
                                                        • Figure 7: UK market for building thermal insulation, 2014-18
                                                      • Segmentation by type of building thermal insulation
                                                        • Key building insulation measures struggle to achieve growth
                                                            • Figure 8: UK market for building thermal insulation, by type of insulation, 2014-18
                                                            • Figure 9: UK market for building thermal insulation, by type of insulation, 2014-18
                                                          • Cavity wall insulation
                                                            • 30% of homes with cavity walls still uninsulated
                                                              • Cavity wall insulation demand suppressed due to cuts in government energy efficiency schemes
                                                                • Figure 10: UK market for cavity wall insulation, 2014-18
                                                                • Figure 11: UK market for cavity wall insulation, 2014-18
                                                              • Loft insulation
                                                                • A third of homes with lofts are still uninsulated
                                                                  • Majority of loft insulation is mineral and glass wool produced in blanket rolls
                                                                    • Reduced retro-fit demand is partly counteracted by increased new housebuilding activity
                                                                      • Figure 12: UK market for loft insulation, 2014-18
                                                                      • Figure 13: UK market for loft insulation, 2014-18
                                                                    • Draught proofing
                                                                        • Figure 14: UK market for draught proofing, 2014-18
                                                                      • Roof insulation
                                                                        • Roof insulation benefits from increased demand for loft conversions in domestic sector
                                                                          • Pitched roofing accounts for largest element of roof insulation
                                                                            • Roof insulation market affected by downturn in commercial property construction in 2018
                                                                              • Figure 15: UK market for roof insulation, 2014-18
                                                                            • External wall insulation
                                                                              • Just 9% of homes with solid walls are insulated
                                                                                • Government cuts solid wall insulation minimum target to 17,000 per year for ECO3 (December 2018-March 2022)
                                                                                  • External wall insulation market impacted by government cuts to energy efficiency schemes
                                                                                    • Figure 16: UK market for external wall insulation, 2014-18
                                                                                  • Internal wall insulation
                                                                                    • Materials used for internal wall insulation
                                                                                      • Internal wall insulation market up by an estimated 9% in 2018
                                                                                        • Figure 17: UK market for internal wall insulation, 2014-18
                                                                                      • Pipe and cylinder lagging
                                                                                        • Demand for pipe and cylinder lagging demonstrates relatively consistent growth
                                                                                          • Figure 18: UK market for pipe & cylinder lagging, 2014-18
                                                                                        • Floor insulation
                                                                                          • Floor insulation market grew by an estimated 4% in 2018
                                                                                            • Figure 19: UK market for floor insulation, 2014-18
                                                                                          • Industrial thermal insulation market
                                                                                            • Demand for industrial thermal insulation shows moderate growth
                                                                                              • Figure 20: UK market for industrial thermal insulation, 2014-18
                                                                                            • Industrial thermal insulation by material
                                                                                                • Figure 21: UK market for industrial thermal insulation, by material, 2018
                                                                                                • Figure 22: UK market for industrial thermal insulation, by type, 2018
                                                                                              • Industrial thermal insulation market by end user
                                                                                                • Figure 23: UK market for industrial thermal insulation, by end use sector, 2018
                                                                                            • Market Forecast

                                                                                              • Market growth expected to remain modest
                                                                                                • Figure 24: Forecast UK market for thermal insulation, 2019-23
                                                                                                • Figure 25: Forecast UK market for thermal insulation, 2018-23
                                                                                                • Figure 26: Forecast segmentation of the UK market for thermal insulation, by sector, 2019-23
                                                                                              • Building thermal insulation forecast
                                                                                                • Government announces policies to help cut costs of home retro-fit measures and boost ‘able-to-pay’ market
                                                                                                  • Cavity wall and loft insulation to remain key measures under ECO3 scheme
                                                                                                    • Figure 27: Forecast for UK market for building thermal insulation, by type, 2019-23
                                                                                                    • Figure 28: Forecast for UK market for building thermal insulation, by type, 2019-23
                                                                                                • Supply Sources

                                                                                                  • UK production of thermal insulation materials is on the up
                                                                                                    • Figure 29: UK production of selected thermal insulation materials, 2014-18
                                                                                                    • Figure 30: Segmentation of the UK production of selected thermal insulation materials, by material, 2014-18
                                                                                                    • Figure 31: Segmentation of the UK production of selected thermal insulation materials, by material, 2018
                                                                                                  • Investment plans at UK insulation material manufacturing plants
                                                                                                    • Trends in imports
                                                                                                      • Figure 32: UK imports of selected thermal insulation materials, 2014-18
                                                                                                      • Figure 33: Segmentation of UK imports of selected thermal insulation materials, by material, 2014-18
                                                                                                    • Trends in exports
                                                                                                      • Figure 34: UK exports of selected thermal insulation materials, 2014-18
                                                                                                      • Figure 35: Segmentation of UK exports of thermal insulation materials, by material, 2014-18
                                                                                                      • Figure 36: UK trade surplus/deficit in thermal insulation materials, by material, 2014-18
                                                                                                  • Structure of Distribution Network

                                                                                                    • Move towards one-stop, single sourcing of insulation solutions from distributors
                                                                                                    • Market Trends

                                                                                                      • New super insulating materials are being developed, but focus still remains on conventional materials
                                                                                                        • Sustainability plays increasingly important part in product innovation
                                                                                                          • Innovative, tech-based solutions enable more efficient and less disruptive insulation installation
                                                                                                            • Adoption of Dutch-style retro-fitting model could accelerate the development of a net zero buildings in UK
                                                                                                            • Regulatory and Legislative Changes

                                                                                                              • Building regulations
                                                                                                                • Government bans combustible material on high-rise homes
                                                                                                                  • Government commitment to reduce carbon emissions
                                                                                                                    • 2017 Clean Growth Strategy puts better insulated homes back on government agenda
                                                                                                                      • But policy progress urgently needed to meet the government’s home energy efficiency ambitions
                                                                                                                        • Energy supplier obligation initiatives to improve energy efficiency of domestic homes
                                                                                                                          • ECO scheme now entirely focused on fuel-poor and low-income homes
                                                                                                                              • Figure 37: Projected uptake of energy efficiency measures in ECO3, October 2018-March 2022
                                                                                                                            • Minimum Energy Efficiency Standards for private rented sector
                                                                                                                              • Enhanced Capital Allowance Scheme encourages investment in energy-saving equipment
                                                                                                                                • Each Home Counts Review aims to improve quality and standards for retro-fit energy efficiency installations
                                                                                                                                • Market Drivers

                                                                                                                                  • Housing stock characteristics
                                                                                                                                    • Figure 38: Number of UK households, 1991-17
                                                                                                                                    • Figure 39: Government predictions of the number of households in the UK, 2019-37
                                                                                                                                    • Figure 40: Housing stock distribution in England, by age, 2017
                                                                                                                                    • Figure 41: Housing stock analysis for England, by type, 2017
                                                                                                                                    • Figure 42: Housing stock distribution in Scotland by age, 2017
                                                                                                                                    • Figure 43: Housing stock analysis for Scotland, by type, 2017
                                                                                                                                  • Private rented sector offers opportunities for thermal insulation installers
                                                                                                                                    • Figure 44: UK home ownership trends, 2007-17
                                                                                                                                  • Energy efficiency level of English homes has stalled since 2015
                                                                                                                                      • Figure 45: Energy efficiency rating bands of English dwellings, by tenure, 2017, (% of dwellings)
                                                                                                                                    • Government plans to improve energy efficiency of UK homes
                                                                                                                                      • Government announces policies in a bid to help cut costs of home retro-fit measures and boost take-up
                                                                                                                                        • Current insulation levels in housing stock, and remaining potential
                                                                                                                                            • Figure 46: Remaining potential to insulate the housing stock in GB, December 2018
                                                                                                                                          • Construction activity
                                                                                                                                            • Figure 47: Segmentation of the construction market, 2018 (% of total)
                                                                                                                                          • Major differences in growth between sectors
                                                                                                                                            • Construction output set for modest growth in 2019
                                                                                                                                              • Figure 48: Forecast construction market, 2019-23
                                                                                                                                            • Continued divergence of sector performance
                                                                                                                                              • Strong new housing prospects
                                                                                                                                                • Figure 49: Forecast new housing market, 2019-23
                                                                                                                                              • Short-term difficulties in private non-residential
                                                                                                                                                • Figure 50: Forecast private non-residential new construction, 2019-23
                                                                                                                                              • Public non-residential construction continues to reflect restrictions
                                                                                                                                                • Figure 51: Forecast public sector non-residential new construction, 2019-23
                                                                                                                                              • Varied influences on R&M activity
                                                                                                                                                • Figure 52: Forecast R&M activity, by sector, 2019-23
                                                                                                                                              • Government energy efficiency schemes drive retro-fit building thermal insulation measures
                                                                                                                                                • 7% of households had a measure installed under ECO scheme
                                                                                                                                                    • Figure 53: Number of key insulation ECO measures installed, by measure type, Q1 2013-Q4 2018
                                                                                                                                                    • Figure 54: Number of key insulation ECO measures installed, by measure type, 2013-18
                                                                                                                                                    • Figure 55: Number of insulation ECO measures installed, by obligation, January 2013 to February 2019
                                                                                                                                                    • Figure 56: Key insulation ECO measures installed, by measure type, January 2013 to February 2019
                                                                                                                                                  • Drivers in heating and ventilation sector
                                                                                                                                                    • Drivers for process plant investment
                                                                                                                                                    • Companies and Brands – What You Need to Know

                                                                                                                                                      • Manufacturers’ investment in UK production facilities suggests optimism in market growth potential
                                                                                                                                                        • Kingspan launches new service-led business Kingspan Facades
                                                                                                                                                          • Major firms are adopting digitalisation innovation
                                                                                                                                                            • Increased focus on sustainability
                                                                                                                                                            • Industry Structure

                                                                                                                                                              • Industry development
                                                                                                                                                                • Figure 57: Analysis of the changes in the other non-metallic mineral products manufacturing industry, 2014-18
                                                                                                                                                                • Figure 58: Analysis of the changes in the glass fibres manufacturing industry, 2014-18
                                                                                                                                                              • Structure by employment
                                                                                                                                                                • Figure 59: Analysis of the employment structure of the other non-metallic mineral products manufacturing industry, 2017 and 2018
                                                                                                                                                                • Figure 60: Analysis of the employment structure of the glass fibres manufacturing industry, 2017 and 2018
                                                                                                                                                              • Structure by turnover
                                                                                                                                                                • Figure 61: Analysis of the financial structure of the other non-metallic mineral products manufacturing industry, 2017 and 2018
                                                                                                                                                                • Figure 62: Analysis of the financial structure of the glass fibres manufacturing industry, 2017 and 2018
                                                                                                                                                            • Company Profiles

                                                                                                                                                              • Encon Insulation
                                                                                                                                                                • Recent activity
                                                                                                                                                                  • Financial performance
                                                                                                                                                                    • Figure 63: Financial analysis of Encon Insulation, 2014-18
                                                                                                                                                                  • Company outlook
                                                                                                                                                                    • Jablite
                                                                                                                                                                      • Recent activity
                                                                                                                                                                        • Company strategy
                                                                                                                                                                          • Financial performance
                                                                                                                                                                            • Figure 64: Financial analysis of Jablite, 2013-17
                                                                                                                                                                          • Kingspan Insulation
                                                                                                                                                                            • Recent activity
                                                                                                                                                                              • Financial performance
                                                                                                                                                                                  • Figure 65: Financial analysis of Kingspan Insulation, 2013-17
                                                                                                                                                                                • Company strategy
                                                                                                                                                                                  • Innovation highlights in 2018
                                                                                                                                                                                    • Knauf Insulation
                                                                                                                                                                                      • Recent activity
                                                                                                                                                                                        • Financial performance
                                                                                                                                                                                          • Figure 66: Financial analysis of Knauf Insulation, 2013-17
                                                                                                                                                                                        • Rockwool
                                                                                                                                                                                          • Company strategy
                                                                                                                                                                                            • Financial performance
                                                                                                                                                                                              • Figure 67: Financial analysis of Rockwool, 2013-17
                                                                                                                                                                                            • SIG
                                                                                                                                                                                              • Company strategy
                                                                                                                                                                                                • Financial performance
                                                                                                                                                                                                  • Figure 68: Financial analysis of SIG, 2014-18
                                                                                                                                                                                                • Superglass Holdings
                                                                                                                                                                                                  • Acquisition by Inflection, part of Russian TechnoNICOL Group
                                                                                                                                                                                                    • Upgrade of UK manufacturing facility to double production capacity
                                                                                                                                                                                                      • Financial performance
                                                                                                                                                                                                        • Figure 69: Financial analysis of Superglass Holdings, 2014-18
                                                                                                                                                                                                    • The Consumer – What You Need to Know

                                                                                                                                                                                                      • Loft insulation represents most popular thermal insulation measure installed in the last three years
                                                                                                                                                                                                        • Homeowners add energy efficiency measures primarily to reduce energy bills
                                                                                                                                                                                                          • 58% of homeowners would pay more for a high energy efficient home
                                                                                                                                                                                                            • Availability of ‘green mortgage’ products would encourage just over half of homeowners to improve the energy efficiency of their home
                                                                                                                                                                                                            • Usage

                                                                                                                                                                                                              • Loft insulation represents most popular thermal insulation measure installed in the last three years
                                                                                                                                                                                                                • Figure 70: Types of energy efficiency measures added to home in the last 3 years, May 2019, (%)
                                                                                                                                                                                                              • Older people more likely to have installed loft insulation
                                                                                                                                                                                                              • Installation Motivations

                                                                                                                                                                                                                • Homeowners add energy efficiency measures primarily to reduce energy bills
                                                                                                                                                                                                                  • Figure 71: Reasons for having energy efficiency measures(s) added to home in the last 3 years, May 2019, (0%)
                                                                                                                                                                                                              • Future Intentions

                                                                                                                                                                                                                • Majority of homeowners do not expect to install home energy efficiency measures over the next two years
                                                                                                                                                                                                                    • Figure 72: Energy efficiency measures considered to add/replace in home in the next 2 years, may 2019
                                                                                                                                                                                                                • Attitudes towards Energy Efficiency Measures

                                                                                                                                                                                                                  • 58% of homeowners would pay more for a high energy efficient home
                                                                                                                                                                                                                    • Availability of ‘green mortgage’ products would encourage just over half of homeowners to improve the energy efficiency of their home
                                                                                                                                                                                                                        • Figure 73: Attitudes towards energy efficiency measures, May 2019
                                                                                                                                                                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                                        • Abbreviations
                                                                                                                                                                                                                          • Methodology
                                                                                                                                                                                                                          • Further Sources and Contacts

                                                                                                                                                                                                                            • Trade associations
                                                                                                                                                                                                                              • Association for the Conservation of Energy
                                                                                                                                                                                                                                • British Urethane Foam Contractors Association (BUFCA)
                                                                                                                                                                                                                                  • Energy Industries Council
                                                                                                                                                                                                                                    • Energy Saving Trust
                                                                                                                                                                                                                                      • Insulation Manufacturers Association (IMA)
                                                                                                                                                                                                                                        • National Insulation Association
                                                                                                                                                                                                                                          • Thermal Insulation Contractors’ Association
                                                                                                                                                                                                                                            • Thermal Insulation Manufacturers & Suppliers Association
                                                                                                                                                                                                                                              • Trade magazines
                                                                                                                                                                                                                                                • Building Control
                                                                                                                                                                                                                                                  • Insulate Magazine
                                                                                                                                                                                                                                                    • Roofing, Cladding & Insulation
                                                                                                                                                                                                                                                      • Trade events
                                                                                                                                                                                                                                                        • National Homebuilding & Renovating Show
                                                                                                                                                                                                                                                          • edie live 2020
                                                                                                                                                                                                                                                            • Northern Homebuilding & Renovating Show
                                                                                                                                                                                                                                                              • Scottish Homebuilding & Renovation Show
                                                                                                                                                                                                                                                                • Southern Homebuilding & Renovating Show
                                                                                                                                                                                                                                                                  • South-West Homebuilding & Renovating Show

                                                                                                                                                                                                                                                                  Thermal Insulation - UK - August 2019

                                                                                                                                                                                                                                                                  £995.00 (Excl.Tax)