Introduction
The Ministry of Housing, Communities & Local Government and the Department for Energy Security & Net Zero have released a consultation document [1]. The aims are:
- Better quality data will be particularly beneficial for businesses or landlords who own a large number of homes or buildings, allowing them to better compare the impact of actions across their estates.
- Improving consumer trust in, and the overall reliability of energy certificates will hopefully increase the number of energy efficiency recommendations undertaken, helping to build demand and supply chains in this industry.
- Improving EPCs will allow companies to have more confidence in their potential investments. Government knows that EPCs are increasingly being used in Environmental, Social and Governance (ESG) reporting and investing, with a growing number of companies wanting to ensure their investments are environmentally responsible.
In the introduction to the document it also states that one of the priorities in the new policy landscape is, “A lower cost, fairer deal for consumers: Lowering bills, spreading costs more progressively, and protecting consumers”.
The consultation proposals
Here are a few of the proposals and, unless otherwise stated, they apply to both domestic and non-domestic buildings.
- “The government is proposing that domestic EPCs use four headline metrics; ‘fabric performance’, ‘heating system’, ‘smart readiness’ and ‘energy cost’, with other metrics provided as secondary information.” The government claims that, “these metrics together convey the key, complementary aspects of building energy performance, allowing the user to distinguish where the home performs more or less well.”
- Reducing the validity of EPCs to only 5 years and not 10 – the idea is to allow prospective property buyers to have a more accurate idea of what they are buying. This proposal was coupled with a proposal to
- Bring Houses of Multiple Occupation (HMOs) more fully into the EPC regime. The proposal is that each time a room is rented the whole property must have a valid EPC.
- Heritage buildings to have an EPC. “We are proposing that all heritage buildings are required to have an EPC. The act of obtaining an EPC does not have any effect on the building materially, and even if obtaining an EPC were to bring a heritage building into scope of MEES, there are relevant exemptions”
- Improvements on EPC assessor quality and fraud prevention
- Improve levels of compliance – the consultation refers to evidence that there were low levels of compliance with the EPC regime. Reason suggested were that the regime was viewed as a “tick-box” exercise; limited awareness; insufficient penalties
Initial thoughts
Whilst we think some of the proposals are good, we are not quite sure how some of the other proposals will help us all progress to a net zero future.
New requirements for HMO’s and bringing heritage buildings into the regime will certainly help make energy efficiency more visible for those using the buildings and prospective buyers. We would also be very much in favour of better enforcement and the low compliance rates mentioned above are pretty shocking. And fraud reduction should certainly be a priority.
We are in favour of improved quality, but a balance must be struck between what an assessor is expected to do on site and what they get paid. Any new quality regime must also respect the difficulties that assessors experience on site. The consultation mentions that “schemes” must have more control over the training. In our experience though, Scheme-branded training has been very poor. The focus was on qualifying delegates and not on ensuring they know what they are doing.
We are not sure what the benefits of having four headline figures in the EPC’s will bring. Our suspicion is that it will lead to more confusion rather than clarification. We’d suggest sticking with a headline metric with lots of other sub-headings. This way any user can focus on whatever bit of the EPC they want, but the headline metric stays the same.
It is interesting that “the heating system” is proposed to be set out as a headline metric. Presumably this is an attempt to nudge occupiers into getting a non-fossil fuel heating system in line with net zero pathways. We’d suggest that a more effective way to do this is to reduce the running cost of non-fossil fuel forms of heating. This will then feed into the EPC calculations and result in a better rating for non-fossil fuel heated properties and come out as a standard recommendation.
Reduced cost of electricity versus gas has been called for many times and even the Government’s Heat and Buildings Strategy identified that it need to be done. On top of all that, one of the priorities of this and other energy policies is to reduce costs for users.
We’d suggest having a cost metric as the headline metric for both domestic (more or less as is now) and non-domestic. We recognise that the running cost and CO2 emission on the issued certificate will go out of date each year, but this could be overcome by caveating it and linking to the web version for more current £ and CO2 emissions. We have also experienced occasions where the running cost displayed on the EPC has directly spurred energy efficiency improvements.
The requirement to reduce the validity of EPCs to 5 years seems redundant. In addition, it will increase costs for organisation such as housing associations for no real benefit. We’d suggest that enforcement and other drivers should increase the frequency of EPC renewals:
- Proper and fuller MEES enforcement
- Investor requirements – EPCs can get updated when it comes to reporting to investors
- Funding requirements – if grant funding is given to upgrade properties, then part of the funding requirement is to have an updated EPC
- Property sellers – we suggest they would be motivated to have an up-to-date EPC to show to prospective buyers anyway. Perhaps this motivation can be increased by a Government campaign about what EPCs are and how useful they are
What to do next
If you are looking at how you can reduce energy usage in your domestic or non-domestic properties, please be in touch and we can organise either desk-based approaches or actual site visit to help. Contact: [email protected]
If you are a social landlord, we know that CIH have a survey [2] out to their members about this consultation. You can contact them if you wish to contribute to the survey.
If this is important to you, you can also take part in the consultation. We will be submitting a full response to the consultation.