Are EPCs still fit for purpose?
Energy Performance Certificates are being revamped, but will the changes go far enough to make them useful? Inside Housing asks a range of sector leaders, in association with Knauf Energy Solutions, what they think. Illustration by Neil Webb
Energy performance certificates are being revamped. But should they be binned instead? Inside Housing convenes a roundtable discussion to find out (sponsored) #UKhousingIn association with:
The EPC has come of age. It is 18 years since the EPC launched in 2007, becoming a mandatory step in selling or renting domestic properties a year later. Its purpose: to give prospective owners or tenants a rough but easy-to-understand rating of the energy efficiency of their new home.
Much has changed since then. Today, EPC ratings are not just for buyers or renters; they are the metric underpinning the housing sector’s 2050 decarbonisation target.
Critics argue that this was never what EPCs were meant to do, that the assessment methodology behind the ratings is outdated and inaccurate, and that modern monitoring technology has, in fact, rendered them obsolete.
Supporters, however, describe the EPC as a simple, cost-effective tool that still has a critical role to play in delivering retrofit at scale.
The government describes EPCs as “a key measurement tool” and plans to introduce a revamped EPC system next year as part of reforms to its Energy Performance of Buildings regime. A consultation on this closed in December (see box: How will the EPC change next year?). Do EPCs simply need an update, or are they past their sell-by date? And if so, what might replace them?
Barry Lynham, managing director of building performance solutions provider Knauf Energy Solutions, says a gap between EPC ratings and real-world performance has been obvious for some time. “We were seeing a lot of projects where energy efficiency levels weren’t matching what we expected from the EPC. Sometimes the outcomes were better than we expected, but, more often, they were worse.”
The solution is to update rather than bin the “absolutely essential” EPC system, Mr Lynham argues. The update should incorporate technologies such as Internet of Things (IoT) sensors and machine learning to monitor and analyse buildings’ energy efficiency. The cost of these systems has fallen by a factor of 10 over the past five years or so, he adds.
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Kieron Williams is leader of Southwark Council, a landlord with 55,000 homes under management. “Are the existing EPCs any use to me? None at all,” he says.
Essentially, EPCs are trying to do two very different jobs – and doing neither of them particularly well, Mr Williams adds.
“They don’t tell me which of my homes I should focus on upgrading, because we know the data is wildly wrong. Often they don’t tell my tenants which home to bid for, because it doesn’t give them the cost of heating their home in any real sense.”
EPCs in their current form “don’t really satisfy anyone”, concurs James Traynor, managing director at ECD Architects. “Certainly not the funders, landlord, building owner, users or residents. Maybe on the sale of the property, it’s a basic tool, but even then, it’s not hugely reliable.”
However, the government’s proposed changes are a “big step forward in the right direction”, he adds.
The system has outlived its purpose, says Lianne Taylor, sustainability director at 49,000-home Platform Housing Group.
“There is absolutely a place for something to benchmark how well we’re performing in general, something to help us plan towards decarbonisation and energy efficiency,” she says.
“But [the EPC is] fundamentally flawed. It’s outdated. It was never made for all the purposes it now serves. We need to be looking towards decarbonisation and measuring regulated and unregulated emissions, and EPCs are not designed to do that.”
One thing they are definitely designed to do, however, is to be user-friendly – and this should not be discounted, says Donna Williams, group director of strategy and sustainability at 125,000-home Sanctuary.
How will the EPC change next year?
Since their introduction in 2007, assessors calculated EPC ratings based on a single metric: a property’s energy cost per square metre, known as the Energy Efficiency Rating.
In the Reforms to the Energy Performance of Buildings regime consultation, the government recognised that while EPCs are “a key measurement tool for assessing [energy] performance”, they are now “widely used beyond [their] original scope”.
In December, the Ministry of Housing, Communities and Local Government announced changes that reflect this. From the second half of next year, assessorswill use four metrics to calculate an EPC rating: fabric performance, heating systems, smart technology readiness and energy cost.
The new method includes asking for more documentation to prove what windows, insulation and boiler is in place, and changing the heat-loss calculation process for flats and mid-terrace homes.
“There are some known problems with EPCs, but the system is fundamentally very easy for our customers to understand. It’s something people are broadly comfortable talking about… that has a meaning and a connection to the vast majority of our customers, and that, in itself, is very helpful,” she says.
The EPC’s dual purpose as both an easy-to-read rating for home sales and lettings, and a tool that facilitates decision-making around large-scale regeneration projects is not always harmonious.
“The EPC is not intended to be a detailed retrofit planning tool, and I think some of the criticism we’re seeing emerge here is almost a price of its success,” says David Weatherall, head of policy at BRE, the organisation that developed the Standard Assessment Procedure (SAP) by which EPC ratings are calculated.
Mr Weatherall suggests that the simplicity of the EPC as a benchmarking tool can be useful in multi-stakeholder projects.
“The main aim of our partnership is how do we bring up the organisations that haven’t retrofitted much before, or are very new to the game, and use some of our other partners that are very experienced to do that?
“EPCs play a huge role in getting that baseline data right, so that we can then start to deliver good-quality retrofit across London.”
EPCs are also the metric that underpins grant funding, says Fallon Warren, head of environment and sustainability at 39,500-home housing association Amplius. “When you’re dealing with targets for grant funding, there’s got to be some form of metric there to be able to show that you’ve improved the property.”
The EPC was originally designed as a simple and cost-effective rating system, says Taylor Boutin, lead retrofit consultant at consultancy Ridge and Partners, and it does that well.
“[The EPC] is fine for selling or letting a property. It’s an asset rating. It lets people know: under typical occupancy, this is what you can expect to pay. But for retrofit, it does not work,” Mr Boutin adds.
To serve this purpose, the EPC needs to take much more granular, occupant-specific data into account, he says. “We need to know exactly how many people live in the property, and to what temperature they keep their house heated to.
“How many hours a day do they heat? How many baths and showers are there each week? Do they have old appliances in the property?”
While this extra data would be useful, it raises questions around privacy, says Steve Evans, senior research fellow at the UCL Energy Institute. “As soon as you’re starting to include personal information… you’ve got an issue.”
The assessment process itself can be a contributory factor to the inaccuracy of some EPC ratings, suggests Mr Weatherall.
“There are skills and training issues around the assessors who are going into homes. The entry requirements to be an energy assessor are very low… compared to European countries,” he says.
2%
Percentage of EPCs that are ever audited
18
Number of years since the EPC was launched
The variance between ratings can be such that whether an EPC Band C rating is a reliable indicator of a warm, safe home is an open question, says Ms Warren – and the assessors are a big factor in this inconsistency.
“Some are great, some are not great. Some have done two days’ training, then go out and think they know the world,” she says. This can lead to delays, as internal teams push back on inaccurate certificates, and potentially on larger-scale inaccuracies as inexact EPC data is fed into modelling software.
Don’t blame the player, blame the game, says Mr Lynham. “It’s not the fault of the EPC assessors. They can’t see there isn’t insulation behind the wall. It’s not their job to drill through walls and check everything.”
Ben Harrison is the programme manager for London Councils’ Retrofit London project, which brings together 21 boroughs and six housing associations that are retrofitting around 8,000 properties between them.
He points out that only around 2% of EPCs are ever audited. “And even those are based on pictures, not what’s actually happening in reality. There are ways you can gamify the whole thing.”
As the use of EPCs becomes more widespread – and as they draw on more sources of information – auditing capacity will become even more stretched and the audit quality will drop, he believes.
“This is going to become a bigger problem,” he adds.
Two-tier model
Sanctuary is piloting a fresh approach on its properties in Scotland, says Ms Williams. EPC assessments are carried out at the same time as stock condition surveys – and by the same in-house surveyors.
“By getting our surveyors to do both at the same time, they are rooting those EPCs in the much more in-depth overall stock assessment,” she says.
“It is showing some initial promising results, both in terms of efficiency – as someone’s already in the home – but also, we’re hoping, in terms of the quality and reliability of the data.”
The broad consensus advocates for reform of the EPC rather than outright rejection. One possible solution could be to have more than one variety of certificate, depending on its intended use. “When you’re retrofitting at scale, you’re not going to be able to employ all kinds of monitoring equipment on every house. It’s just not feasible,” says Mr Boutin.
Mr Boutin suggests a two-tier model could work. “You have your EPCs when you’re selling or letting a house, but then we need a more robust data-collection that the retrofit assessor can do. It will still be fast, it will still be cost-effective.
“Then we can progress that into formulating our retrofits, where we have the knowledge and the understanding of what’s happening with the property.”
“You don’t have to throw away the EPC,” adds Mr Lynham. “But like taking the diesel engine out of cars and replacing it with an electric engine, you just put something much better in.”
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