What should EPC reform look like?

Elmhurst Energy’s Managing Director Stuart Fairlie is calling for EPC reform from the next government, but what does that reform look like?

Using current Energy Performance Certificates (EPCs) to drive net zero is like using blunt scissors to cut grass. EPCs are a powerful tool for estimating energy bills, but we are asking them to do a job they weren’t designed for. They must change and, given that a government consultation on the issue was expected this summer, Elmhurst Energy is urging the next government not to let the general election further delay vital progress in EPC reform.

The current EPC was introduced as a cost metric to simply show how cheap or expensive a home is to heat. Improving them would unlock the potential they offer for improving the energy efficiency of our homes and buildings, making them carbon net zero-ready and able to support decarbonisation of the grid.

EPCs now need to include information on the energy cost, energy consumption and carbon emissions of a home or building – the three Cs (cost, consumption and carbon). To make them easier to understand, the format should change to something similar to food labelling. To increase their validity, they should be renewed every three years – or every time there is a change to a building that impacts its energy performance.

The government was expected to release its EPC consultation as part of the EPC Action Plan, launched in 2020. However, the general election in July has meant that progress has stalled.

Elmhurst’s Almanac 2024 Driving Progress During Political Change offers policy and regulatory recommendations to government to put energy efficiency policy relating to UK homes and buildings back on track. Five key asks on EPCs, as well as other areas vital for improving the energy performance of UK buildings, include:

1. EPCs should show the three Cs as well as the Golden Triangle
2. a new EPC should be launched alongside the Home Energy Model (HEM) and Future Homes Standard (FHS)

3. rebalance tax should be applied to fuel

4. minimum energy efficiency standards (MEES) should be reinstated; and

5. a retrofit advice hub should be launched.

1. Use the Golden Triangle of information in EPCs

As well as showing the three Cs, EPCs should also use a Golden Triangle of information:

• asset rating: the predicted energy cost and consumption of the building, based upon average occupancy patterns

• occupancy rating: the predicted energy consumption of the building, based on the people using it; and

• energy consumption: what energy the building uses to run, ideally based on data from smart meters.

2. Launch the new EPC alongside the HEM and FHS

Consultation results are expected on the new FHS and HEM. The latter will be used to demonstrate that a home complies with legal energy efficiency performance targets.

Elmhurst believes the most sensible solution would be to deliver the new EPC so that it coincides closely with the HEM and FHS. It is urging government to release its long-awaited EPC consultation – earmarked in the 2020 EPC Action plan – as close to summer 2024 as possible, as previously indicated.

3. Rebalance tax applied to fuel

Currently, any low-carbon heating solution running on electricity, such as a heat pump, is more expensive than running a traditional gas boiler. This means they won’t be recommended on the current EPC.

To change this, we must switch the green levy in energy bills so it applies to gas rather than electricity supply. Price ceilings and floors should be applied to ensure that what is right for the environment is also right for the consumer. This would also make heat pumps and other low carbon heating solutions more attractive to consumers.

4. Put minimum energy efficiency targets back in place

The government must take a deep breath and reinstate energy efficiency targets for the private rented sector. All non-domestic tenancies should be required to meet EPC C by 1 April 2027. EPC B should apply to all privately rented non-domestic properties by 1 April 2030.

For domestic private rented sector properties, the government should adjust the timeline previously proposed for new and renewed tenancies to reach EPC C by 1 April 2028. This should be gradually extended to cover all existing tenancies at a later date.

5. Launch a retrofit advice hub

A retrofit guidance hub located on GOV.UK would deliver much-needed consumer information on retrofit and energy efficiency improvements – including the best order to complete them and how they might work alongside planned property refurbishments.

It should support decisions around green finance and appropriate renewable technologies, such as heat pumps and solar panels, plus options for insulation, ventilation and heat recovery. The hub should also signpost to registered professionals so homeowners can locate properly accredited and trained people.

With reform, EPCs could deliver so much more. They can help drive policies for cutting carbon emissions and slash energy use to make the UK’s housing stock fit for purpose and ready for the future.

Read Elmhurst’s Almanac at b.link/ElmhurstAlmanac24

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