Comment by Fay Holland, Senior Energy Policy Advisor, at Energy Systems Catapult.

Reducing emissions from buildings is one of the biggest challenges the UK faces in getting to Net Zero. The Climate Change Committee’s latest progress report showed that, after several years with little change, emissions have started to fall in the buildings sector. However, this may be due to people using their heating less because of high prices and milder weather rather than a sign of real progress in decarbonising housing.

To really understand whether and how our housing stock is changing, we need to look at what’s happening behind the headline emissions figures. At the moment, Energy Performance Certificates (EPCs) are the main tool that we use to quantify the energy performance of an individual building, but are they telling us what we need to know?

Last December, the Catapult published a report which set out our views on how EPCs need to be updated to align with Net Zero. Before the General Election, we spoke to civil servants and ministers ahead of an expected consultation on options for reform of EPCs. With the new government in place and the Department for Levelling Up, Housing & Communities having reverted to its previous name, the Ministry of Housing, Communities and Local Government, this will be one of the many decisions in its new ministers’ in-trays.

Our recommendations

Our report found that current EPCs are too often inaccurate, recommend fossil fuel heating systems over low carbon alternatives, and don’t reflect the wider needs of the energy system.

To tackle this, we recommended that the current rating system is replaced by a suite of three metrics:

• Energy Use giving an indication of the predicted total energy use of the fixed elements of the building.
• Climate Impact giving an indication of the emissions attributable to the property’s energy use.
• Energy Cost giving an indication of how expensive the property’s energy bills are likely to be.

These metrics could be complemented by a Smart Building Rating, which would indicate a building’s capacity to provide flexibility to the electricity system by shifting energy use to times when there is lots of renewable energy available.

Alongside the new metrics, the Catapult is advocating for greater use of real data and measurement of building performance within EPCs. Moving to a system of Digital Building Passports, which would bring together relevant information about a building’s energy performance, would enable greater integration with Local Area Energy Planning and personalised retrofit advice.

What do households think of EPCs?

Recently, we surveyed members of our Living Lab to find out what they think about the current EPC system and the changes we’ve suggested.

The findings showed that many householders are familiar with EPCs: 75% of respondents were aware of their home’s EPC rating, with the other quarter either unaware (16%) or living in a home for which an EPC hadn’t been carried out (9%).

Many Living Lab members were sceptical about the accuracy of their properties’ EPC ratings. While 36% of participants view the ratings as either inaccurate or very inaccurate, only 3% consider them very accurate. Key reasons for perceived inaccuracies include incorrect estimations of energy usage and costs, unaccounted renewable energy, uninspected improvements, and outdated assessments. This reflects the findings of a recent investigation by the consumer organisation Which?, that found low levels of satisfaction with the EPC process among homeowners.

The survey also revealed some confusion about what EPCs are telling people about their homes. The headline rating in the EPC is called the Energy Efficiency Rating but this is something of a misnomer because it is actually a measure of the cost of the property’s energy use. The current EPC also includes an Environmental Impact Rating but less than half of respondents were aware of this.

This confusion is one of the reasons that we’ve proposed moving to three metrics, each clearly labelled to help users understand what it means.

We asked how people would use the three metrics we’ve proposed in different scenarios. Energy Use and Energy Cost were most likely to be rated very useful when buying or renting a home, making decisions about heating systems, or considering energy efficiency measures. The Climate Impact rating was also seen as useful by most respondents in each scenario, suggesting that people are likely to consider multiple aspects of a property’s energy performance at once.

Time for change

Reforming EPCs will not be a silver bullet – after all, they can only measure the energy performance of a building, not improve it. But if we get them right, they can serve as a strong foundation for domestic decarbonisation policy, allowing targets to be set and people to make informed decisions about their properties.

We know that we need to speed up the decarbonisation of homes, so a timely decision on EPC reform is needed. The Catapult looks forward to working with policy makers to make this a reality.