The Salford Energy House is a remarkable laboratory. A reconstructed 1919 end-of-terrace dwelling, it sits within a completely insulated warehouse on the university campus . External temperatures can be precisely adjusted. Simulated rain falls from the ceiling onto the roof of the house. Wind is mimicked by giant fans. 400 measurements can be taken every minute. Researchers are able to make large and small changes to the house (such as opening or closing the curtains) and measure accurately what the impact is on energy consumption and internal temperatures. This is the only place in the world, I was told when I visited a couple of weeks ago, where the real impact of energy-saving measures can be exactly calculated.

Commercial companies can use the house for experiments. The building products company St Gobain recently released some details of the work it has carried out on the Salford house. Although the published data is very sketchy, the headlines suggest that external wall insulation can be much more effective than some other estimates would suggest. When St Gobain put insulation on the outside of the end of the house and the back wall and also added internal insulation on the front wall, it reduced heat loss by almost 50%, saving over £250 a year. This is about three times what the latest government data suggests. The reasons will include the care with which the St Gobain staff installed the insulation and the quality of the product.

About 7 million houses in the UK have solid walls, about a quarter of the total stock of homes. These houses were usually built before the mid-1920s, when cavity wall insulation became almost universal in single family dwellings. A typical Victorian terrace has brick walls, often only one brick thick. Such houses, still popular with their owners, are amongst the most energy inefficient in the Western world. Solid wall insulation – either on the outside of the brick or on the inside of the house is the most important improvement that can be made. Reducing the heat need in these homes (1/4 of the stock) by up to 50% by using solid wall insulation would cut UK carbon emissions from domestic heating by about 12%. This is not an overwhelming number but external wall insulation is one of the two or three most important individual energy improvements that the UK can make.

An earlier article on this web site looked at the results from the National Energy Efficiency Database (N-E-E-D). This database showed that the real world results from most energy efficiency measures were much less than other government sources predicted. For example, increasing the thickness of loft insulation had very little effect on actual energy consumption. The N-E-E-D results also suggested that solid wall insulation measures were not particularly effective. The average installation was shown to reduce its energy consumption by about 2,000 kWh a year, perhaps a sixth of the total heating bill.

So the Salford results are much better. In the laboratory, where St Gobain technicians could carefully fit insulation without fear of being rained on or being distracted in other ways, the savings seem to be about 6,000 kWh a year, three times the level suggested by N-E-E-D for real world houses. The explanations for the difference are well known: the work will have been done more carefully and precisely in Salford, the materials will have been first-rate and – perhaps critically- the laboratory house was still run at the same temperature once the insulation was completed. (Better insulation sometimes seems to encourage the householder to turn up the thermostat, taking back some of the savings).

So the good news is that solid wall insulation can really make a difference to energy consumption. But this is balanced by the high cost of such measures. Even a small terraced house, such as the Salford lab, would face a bill of over £5,000 for good insulation, possibly much more. The annual return would therefore be less than 5% or so. This isn’t sufficient to incentivise most householders, although they would certainly benefit from a more comfortable and less draughty house. However government can borrow at much less than 5% so it may makes financial sense to think about a national programme of solid wall insulation.

What about the other measures that the St Gobain team undertook? Topping up loft insulation saved about £20 a year, underfloor insulation and better windows cut bills by about £35 for each measure. These are all quite small savings and its worth reiterating the point that the cash benefits wouldn’t justify taking out a Green Deal loan to finance the improvements. (Unlike the results for external wall insulation, the St Gobain figures for loft insulation are similar to the figures suggested by N-E-E-D for real homes).

We all like to think that energy efficiency improvements are financially sensible. These latest Salford results suggest that the reality is more complex: if you have savings mouldering in a close-to-zero interest bank account then improving the fabric of your home may make sense. But for new homeowners stretched by mortgage payments, insulation will not look financially attractive.