“EPCs undermining decarbonisation efforts”

The metrics, methodology and uses of domestic Energy Performance Certificates (EPCs) should be reformed to align with the decision-making needed to accelerate building decarbonisation and expand access to warm homes, finds a new report from Energy Systems Catapult.

Since EPCs were introduced in 2007, they have been used for an expanding list of purposes, including in policy relating to Net Zero, renters’ rights, and fuel poverty. The use of EPCs for purposes that they are not well aligned with, has created a situation whereby policies do not achieve their goals, undermining decarbonisation efforts.

The need for reform

The report, Making Energy Performance Certificates Work for Net Zero, highlights three key issues with the current system: accuracy and consistency, alignment with Net Zero, and alignment with wider energy system needs.

  • There is a performance gap between the actual energy consumption of buildings and the consumption modelled by EPCs, as well as an inconsistency in the ratings arrived at by different Domestic Energy Assessors for the same property.
  • EPCs continue to favour intensive gas heating over low carbon technologies such as air source heat pumps (ASHPs), owing to the focus on energy costs within the current Energy Efficiency rating.
  • The current EPC system deals with each property individually, with little consideration of the local context in which it is situated. This individualistic approach to EPCs limits the potential of whole system planning to accelerate the transition to Net Zero buildings.

Taking only the houses sold each year, if EPCs continue to recommend new gas boilers at the current rate (i.e. 25% of cases) until 2035, the total societal cost of resulting excess carbon emissions would be between £19bn and £57bn in the period up to 2050 compared to an alternative scenario where an efficient low carbon heating technology, such as an air source heat pump, were installed.

Outcome-based metrics

The EPC metric is ingrained into how we buy, sell, and rent property in England, Wales, and Northern Ireland. As such, Energy Systems Catapult proposes moving away from a single headline rating to a system built around three innovative, equally significant metrics, based on the most complete data, aligned to the outcomes most of interest to users.

  • Energy Use Metric: this would give a clear indication of the predicted total energy use of the fixed elements of the building, incentivising improvements to both the fabric efficiency of the building and the efficiency of its heating system.
  • Climate Impact Metric: this would give a clear indication of the emissions attributable to the property’s energy use and enable decision-making to target the property’s decarbonisation.
  • Energy Cost Metric: this would give a clear indication of how the energy costs of the property compare to others and facilitate continued use of EPCs in policy related to fuel poverty and energy affordability.

Policy and regulatory uses should be aligned to the relevant metrics in the reformed EPC system. For example, policy relating to fuel poverty should use the energy cost metric, while Net Zero policy should focus on the climate impact metric.

The EPC could be complemented by a Smart Building Rating (SBR), which would indicate a building’s capacity to provide flexibility to the electricity system. Shifting energy demand to times when it is abundant, clean, and cheap will be essential as the UK moves towards greater dependency on intermittent renewables.

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.

Fay Holland, Senior Energy Policy Advisor at Energy Systems Catapult, said: “EPCs – in their current form – are undermining efforts to achieve Net Zero. Our recommendations recognise the central role that EPCs play in the property market, and in policymaking to create the conditions necessary for innovative solutions to home decarbonisation to flourish.

“EPC reform will benefit consumers. It will encourage property owners – landlords, social housing providers, and homeowners – to adopt low carbon heating technologies, while opening the market up to new measurement methodologies will support innovative, high-quality performance diagnosis and retrofit solutions. The introduction of digital building passports will provide the data needed to inform better policy decisions by government on the decarbonisation of heat and buildings.

“The need for reform is evident. If we’re serious about getting to Net Zero while delivering outcomes best suited to consumers, then we need to act against those metrics that act as a barrier to a just, cost-effective energy transition.”

Markets, Policy & Regulation

Independent and technology-agnostic markets, policy & regulatory thought leadership tackling the hardest challenges on the way to Net Zero.

Find out more

Want to know more?

Find out more about how Energy Systems Catapult can help you and your teams