The government's Energy Performance Certificate reforms must be balanced
The Chartered Institute of Building (CIOB) is calling for the government to carefully consider the potential impact on consumers with its proposed reform of the Energy Performance of Buildings (EPB) regime.
A consultation, launched in December 2024, asked for views on proposed reforms which would see the metrics used for calculating Energy Performance Certificates (EPCs) changed as well as potentially altering requirements for both EPCs and Display Energy Certificates (DECs).
The suggested changes, which cover England and Wales – although similar reforms have already been proposed in Scotland – also include shortening the EPC validity period and extending requirements for rented properties, amongst other areas.
And while CIOB is broadly supportive of proposals to reform the currently outdated EPC system to better understand a building’s true performance and better recommend measures to consumers to improve the efficiency of their building, there are some key challenges these reforms must navigate.
We encourage the government to carefully consider the potential impacts of these reforms on those in low-income households and those without the necessary finances to fully afford energy efficiency upgrades.
CIOB has long criticised the current system for calculating EPCs. In fact, many other organisations have shared concerns about the accuracy and consistency of EPC ratings.
In 2023, research firm CarbonLaces found current EPCs potentially overestimate energy use by 344 per cent in a comparison of more than 17,000 homes with actual use logged by smart meters versus EPC cost estimates.
Simultaneously, a survey conducted by the Better Buildings Partnership found only 17 per cent of respondents believed EPCs were useful in identifying energy efficiency upgrades, calling into question their suitability as currently calculated.
The proposed reforms aim to expand the data used to calculate EPCs, shifting from relying primarily on estimated energy cost to a broader range of factors, such as carbon emissions, building performance, energy use, heating systems, and smart readiness.
Training and trust
One of the key failings of successive government-led retrofit schemes to incentivise improving energy efficiency has been the lack of trained and accredited professionals to carry out the works and the impact this has on trust in the market.
Should the current government choose to include a large swath of new metrics for the evaluation of EPCs, those carrying out the assessments will require significant upskilling. This will be crucial to ensure both consistency and accuracy of assessment and accompanying recommendations for efficiency upgrades are targeted and realistic for both domestic and non-domestic property owners.
While we understand the consultation documentation makes recommendations on training and accreditation for assessors, the government must ensure training is required well in advance of the new assessment scheme coming into force.
Alongside this, a comprehensive list of schemes must be published to ensure accountability is built into the new system and proper enforcement is in place so assessors are held to account.
Working with professional bodies across the built environment which have a long history of ensuring competence and consistency across multiple industries will be important for the new system to have the correct frameworks in place so as not to lose the trust of consumers.
Trust is paramount when making recommendations to home and business owners who will ultimately be paying for energy efficiency upgrades. If a new system does not function as intended or assessors are not trusted with their recommendations, we believe the system will fail to make the impact necessary to make a dent in the energy efficiency of the UK’s building stock.
Cost
Alongside reforms to the metrics used to calculate EPCs, great weight has been put on the output of these assessments being a concrete suite of recommendations for consumers to make upgrades to their properties and therefore their EPCs.
The intention here is good. Encouraging consumers to upgrade their properties will help push the UK towards meeting its legally binding net-zero obligations while reducing regular energy bills. However, the government must be honest and transparent with consumers about the potential costs associated with energy efficiency upgrades.
Considering the proposed heating system metric as an example, a metric to understand the impact of a heating system on the efficiency of a building would be a good way to understand what actions can be taken to improve building performance. However, if the aim is to push consumers to low-carbon solutions such as heat pumps, accommodations must be made for those who cannot afford the upgrade.
As has been well documented, heat pumps are expensive to install, current grant schemes do not go far enough to cover the cost of an upgrade, and the actual short-term impact on energy bills is relatively minimal.
Accommodation should be made to address this, either by increasing current grant funding to cover more of the upfront installation costs or by recommending upgrades that consider how recommendations for expensive technology might affect low-income households' ability to sell their properties.
Balance
The points above show a balanced approach must be taken when looking to overhaul the way EPCs and DECs are calculated.
On the one hand, assumed cost has been overly relied on to calculate the performance of buildings but, on the other, it is still a useful tool for consumers to understand the financial commitment they may be making when they purchase a property.
Including a metric on smart readiness to promote smart meters and other intelligent appliances may be a good mechanism for optimising the understanding of energy usage. While this is sensible, the government must be aware of some of the recent criticisms about smart meters not working properly for 2.7 million households.
Likewise, when grading or ranking heating systems based on their environmental impact, the government must tread a fine line between encouraging efficiency and consumer choice. The reality is that not all heating systems will be appropriate or viable for certain properties, such as heritage buildings, so ranking fossil fuel systems at the bottom and direct electric heating in the middle may cause properties to lose out when choice is limited.
Overall, it is important these reforms carry out two primary functions: reducing carbon emissions while simultaneously reducing energy bills, and ensuring consumers are equipped with relevant, actionable recommendations for how they can reduce their emissions that are affordable and tailored to their financial situation and building type.
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