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Energy Performance Certificates: Fit for purpose or falling short of efficiency expectations?

Energy Performance Certificates: Fit for purpose or falling short of efficiency expectations?
Samantha Partington
Written By:
Samantha Partington

Greater emphasis has been placed on Energy Performance Certificates (EPCs) to help homeowners make their properties greener as the government commits to making the country carbon-neutral in the future. But with confusion over their purpose, are EPCs really up for the job?

In the second of YourMoney.com’s special series on EPCs, we look at what they include and what is off the radar, the methodology and the misconceptions, and how they’re set for change in the spring.

The government has backtracked on some of its net zero plans, such as forcing landlords to achieve a minimum EPC C rating in just two years. But the long-term goal remains that we must continue to decarbonise our homes and improve their efficiency to be a carbon neutral country in the future.

But finding out how, is leaving property owners confused.

Every home put up for sale or for let must have an EPC, a six-page report generated by a computer but fed with data collected in your home by an assessor.

It gives your home an energy efficiency rating from A – the most efficient, to G – the least. The better your rating, the lower your energy bills are likely to be. They are valid for 10 years, with each report listing recommendations to help you boost your score.

A report by the Royal Institution of Chartered Surveyors (RICS), however, said the EPC approach was one of “extreme simplicity”. Other experts claim that assumptions made about properties lead to inaccurate scores; recommendations do not lead to greener homes and heating systems that pollute the atmosphere score higher than ones that don’t.

Some would argue EPCs are “falling short” of increasing expectations from homeowners who want to know how to make their homes greener.

Nonetheless EPCs are the government’s approved measure of energy efficiency, but when it comes to helping homeowners become greener – are they up to the job? YourMoney.com investigates…

EPC objectives and incentives

When EPCs were introduced 15 years ago, the objective was to help incoming occupiers avoid getting into fuel poverty by telling them the cost of annual energy bills. But basing the rating on cost alone is no longer seen as the most suitable way to rate the energy efficiency of our homes.

Antony Parkinson, senior specialist, property standards at RICS, says: “Our knowledge and expectations are ever-increasing, so it is inevitable that EPCs are falling short of the expectations being placed on them.

“We understand that the greenest ways of heating our homes are not necessarily the cheapest, at the present time.

“If the government continues to use EPCs as the measure of the energy efficiency of a property, the methodology must reflect actual energy efficiency, including carbon emissions.”

Parkinson explained that currently EPCs don’t incentivise homeowners to install an air source heat pump – a form of low carbon heating powered by electricity – because it costs more to heat your house using one than a gas boiler does. If you have gas heating you are more likely to have a better rating than someone who uses electricity.

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"The EPC masquerades as something it clearly can’t deliver."

-   Sustainability consultant Martin Evans of Malthouse Consultancy

Sustainability consultant Martin Evans of Malthouse Consultancy, says EPCs are an “inadequate method” of trying to improve energy efficiency.

“The EPC masquerades as something it clearly can’t deliver. An Energy Performance Certificate sounds grand when actually it is an assessment that takes minutes and tells you the blindingly obvious.

“It should be a useful analysis of a building to see how well it performs now and what its potential is for the future. But it’s hopelessly simplistic.”

Recommendations include basic tips such as switching to energy efficient light bulbs and insulating a water cylinder. However, he adds that advice to install better insulation is useful.

“Anyone who is serious about making meaningful improvements to the efficiency of their homes should have a more thorough assessment carried out,” Evans adds. This could span two to three weeks and cost in the region of £5,000.

Phasing out gas boilers: Green mortgage rewards

Although the government has scrapped its EPC targets for landlords, it is still committed to phasing out gas boilers and has upped the value of the grant available for replacing them.

Meanwhile, ratings are still being used as incentives by banks and building societies. Green mortgages are available that reward homeowners who have the highest ratings by offering borrowers the cheapest mortgage deals.

But, those striving for a higher efficiency rate will find that EPC recommendations are not specific to their property and may not even be applicable.

Assessors explain it isn’t possible to personalise advice because the reports are generated by the software based on a standard set of questions and are meant as guidance only.

"I do think EPCs are fit for purpose. But they are currently being asked to do all things for all people and they need to be adapted and improved in several ways."

-   Andrew Parkin managing director of Stroma Certification

Pushing back on criticism that EPC ratings could be skewed by assumptions, Andrew Parkin managing director of Stroma Certification, an accreditation body for energy assessors, says: “They do use assumptions where necessary – usually where something cannot be assessed or seen without being destructive.

“Any assessment process that must reach a conclusion needs to use assumptions. But these are based on established science, though by their nature they are usually averages or broad assumptions.”

As an example, if a homeowner can’t prove they have a certain type of insulation because they haven’t kept the warranty, the software assumes a default level of insulation that was common in properties of that type and age.

Parkin adds: “I do think EPCs are fit for purpose. But they are currently being asked to do all things for all people and they need to be adapted and improved in several ways.

“I feel that the methodologies used for EPCs are good and based upon well understood and continuously improving science. When applied correctly, they give a good degree of accuracy. They are certainly fit for the purpose that they are currently used for and are a great place to start for future policies, understanding how our buildings perform.”

‘EPCs are misunderstood’

An improvement for homeowners, Parkin says, would be to base the rating on cost, carbon emissions and the amount of energy a property uses.

At a cost of around £30 to complete an assessment, a quick turnaround is necessary leaving assessors little time to linger after the checks are done to explain how the ratings and report work.

Domestic energy assessor Faye Handfield thinks EPCs are a valuable tool for homeowners but without being properly explained, the ratings and reports can be misunderstood.

She carries out EPC assessments for landlords who use her letting agency. She charges £75 and sets aside a morning or afternoon for the visit. She says it takes up to 30 minutes to input the data collected at the property onto the EPC platform. She then spends another hour in the tenant’s home to get a complete picture of how they use the property. Afterwards she discusses the outcomes and recommendations with the landlord.

“It’s tough hearing from assessors about how badly they’re paid and how much they’re disrespected for carrying out what I consider to be an essential document for the millions of people who own a house,” Handfield says.

“If they could spend double the time with owners to truly explain the results and what is going on in their homes, that change would improve our energy efficiency, consumption and attitudes by 30 to 40%.”

Handfield wants to see more money invested in the EPC system, education for homeowners from the EPC community, lenders and energy companies and she wants assessors to be paid better so they can spend more time in the property.

EPC changes on the horizon

For most homeowners, the EPC remains the most accessible tool to help them achieve lower energy bills and greener properties. So it will come as a relief that an update to the way your home is scored is due to be released in spring.

It’s expected to improve the accuracy by removing assumptions made on window sizes typical for the age of the property; it will take into account solar technology such as PV diverters that allow you to heat your hot water, and heat pumps will start to appear in the recommendations.

Related: The first story in YourMoney.com’s special EPC series: Landlord despair: ‘I spent £40k making my flat more energy efficient but my EPC was downgraded’