More aligned thinking about EPCs needed

With a large energy inefficient housing stock, energy assessment training only makes sense

Our surveyors are currently training to become domestic energy assessors and as anyone who has delved into the world of Energy Performance Certificates (EPCs) will know, there are a few anomalies at play.

As well as rating the energy efficiency of a property, a bi-product of the EPC is intended to be lowering the carbon footprint of a home – or at least it should be.

It’s full speed ahead to reduce the UK’s carbon emissions

The Government’s bid to reach net zero carbon emissions by 2050 is in full swing and April saw the launch of its Boiler Upgrade Scheme offering households in England and Wales up to £6,000 to switch to low carbon heating systems, such as an electric powered heat pump.

EDF Energy estimates that installing a heat pump could cut a property’s carbon emissions by more than 23 tonnes of CO2 over ten years; the equivalent of 30 return flights between Heathrow and Madrid.

Those applying for the scheme will no doubt be hopeful that such a measure will improve the EPC rating of their property – but they may be wrong.

EPCs – How are they calculated, and why?  

The way in which a domestic EPC is currently calculated means it is based on a cost metric – not carbon output – and as the price of gas per unit is cheaper than that of electricity, installing carbon reducing features does not automatically see the EPC’s rating improve.

While it might seem illogical that the EPC is calculated in this way, if we look back to how they originated, it is perhaps not surprising.

EPCs date back to 2007 and were originally intended to form part of the ill-fated Home Information Packs. They were created long before the Government’s net zero carbon emissions pledge and were intended for the most part to highlight to a homeowner how they could make cost savings on their energy bills.

As the EPC becomes of increased significance in the housing market though, we hope and expect the guidance and the way the rating is calculated to continually evolve, and this is something we are already seeing for non-domestic and some domestic properties.

Unlike domestic EPCs, non-domestic EPCs are based not on a cost metric but rather a property’s CO2 emissions. Theoretically this would imply that properties with features such as a heat pump would carry a good rating – this has not necessarily been the case thus far however.

A much-needed revamp for assessing carbon emissions

The methodology used for assessing a property’s carbon output was up until recently based on outdated figures referenced from when the UK’s electrical grid relied heavily on fossil fuels.

Nowadays, the increased usage of renewable or low carbon fuels means that electricity produces much lower emissions and the guidance was updated in June to reflect this. Some have predicted that this new measurement could result in an electricity fuelled non-domestic property moving from an E banding to a C.

The new guidelines will also apply to new build and existing domestic dwellings that are undergoing significant extension or transformation work. Whether this will lead to an increase in such properties’ EPC ratings still remains to be seen. In the case of such a property installing a heat pump, even though the new guidelines would work in the property’s favour in terms of carbon output, for an improved EPC to occur, it may also need to work out cheaper than a gas boiler – as whilst recognising carbon output the new guidelines have not dispensed with the way the domestic EPC is calculated related to cost. For domestic new builds and those undergoing refurbishment, it will therefore be a case of understanding the relative balance in order to make the best installation decision for the EPC.

Going forward clear communication will be key for any changes with EPCs

It is hoped and would be sensible that as we move forward, all domestic EPCs will see their EPC rating improve inline with any carbon output improvements to the property.

As we edge closer to the date when all newly-rented properties will need an EPC of at least a C rating – expected to be 2025 – it will also be vital landlords are well informed and that any changes that are made to the EPC calculations happen sooner rather than later.

Simon Jackson is managing director of SDL Surveying 

First published by Financial Reporter

 

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