Andrew Warren, chair of the British Energy Efficiency Federation, explores the potential future for building Energy Performance Certificates (EPCs) as the UK shifts towards lower carbon home heating in an article first published on the Business Green website.
What role could EPCs play in the crucial shift towards low carbon home heating?
The days of the gas boiler being the means by which practically all British buildings are heated are looking increasingly numbered.
The Environmental Audit Committee (EAC) is one of the most important House of Commons committee. And, following a series of public hearings into progress on energy efficiency in housing – including an unprecedented session involving Ministers from across the Treasury, MHCLG and BEIS departments on Whitehall – it has published a magisterial report.
Acknowledging that the UK is notorious for having among the least energy efficient buildings in Europe, the EAC made a series of recommendations concerning how policies and practices should be improved, and right at the top of the list was the humble Energy Performance Certificate (EPC).
Half of all homes in England and Wales have already got a valid EPC. These must by law be acquired whenever a home changes occupancy or ownership. They can then last for ten years, regardless of what changes are made to the building.
In their 13 years of existence, EPCs have become the accepted means by which the relative energy performance of each building – commercial as well as residential – can be measured. Practically every estate agency window provides details of each building’s rating on an A to G scale, along with room numbers and selling or letting prices. This fulfils that old business school dictum: you can’t manage what you can’t measure.
EPCs exist to help cut spending on fuel
EPCs are designed predominantly to provide information regarding the likely fuel bills in a particular home and, importantly, to give guidance as to how these might be reduced in future. That is precisely their current purpose.
Right now, acquiring an EPC is absolutely the only occasion commonly available that provides individual recommendations for change on energy usage available, based on each specific home. Well, in England at least. In both Scotland and Wales, schemes do exist which can and do provide assistance regarding possible improvements based upon a specific, rather than a generic, building.
If, as anticipated, there is to be a major drive towards improving each buildings’ carbon footprint on the road to net zero emissions by 2050, an agreed mechanism like an EPC will need to play an absolutely vital role.
Today the vast majority (86 per cent) of homes are heated by fossil fuel gas. Among the most effective means of improving a home’s heating and energy efficiency obviously includes insulation, double glazing, efficient lighting, better controls, and above all a more efficient gas boiler.
Of the 1.6 million high efficiency gas condensing boilers installed each year, the vast majority are replacing traditional elderly gas-guzzling boilers. But still there are five million of these in use.
EPCs don’t recommend heat pumps
And that is why there have been very, very few occasions when an EPC has been issued that stresses the need to replace an existing gas boiler with a heat pump. For a start, the capital cost of the latter is several times that of a gas boiler. Even without calculating the extra expenditure that replacing a boiler with a heat pump will inevitably follow upon the home’s radiator system.
However, according to official government calculations underlying the ill-fated Green Homes Grant scheme – which was unceremoniously scrapped earlier this year – a ground source heat pump is apparently deemed to be 17 times more valuable in carbon saving terms in the average household compared to installing triple-glazed windows, 23 times more effective than installing loft insulation or heating controls, and 39 times more impactful on emissions than humble draught proofing.
As an accompanying government note wryly observed: “These carbon savings do not reflect the cost of installing each measure.” Quite so – but it adds blithely that “more generally, a larger heat pump can be installed if insulation levels are low”, rather than vice versa.
A long-promised Heat and Buildings Strategy is due “shortly” from the government this summer. As indeed it was throughout last summer. And last autumn. And last winter. And last spring. The EAC has told the government this must “set an ambitious but realistic strategy for owner occupiers to achieve minimum EPC C standards”.
Unlike the government, the EAC recognises that the current structure of EPCs simply won’t deliver the 20-fold increases in heat pumps promised by the Prime Minister within seven years. Perhaps that is why the EAC is also describing EPCs as “outdated”, and wants them replaced “with Building Renovation Passports, which set a clear pathway to decarbonise homes”.
It was recently suggested in The Telegraph that “electricity bills could be slashed to persuade homeowners to abandon gas boilers by 2035 under green plans”. It adds that “nearly a quarter of consumers’ bills currently cover taxes to pay for policies, including subsidies for renewable energy and fuel vouchers for poorer households” – a reference to the Energy Company Obligation.
“Ministers believe these additional costs are acting as a major barrier to get people to heat their homes on low carbon electricity alternatives such as heat pumps, at a time when gas prices are lower,” it said. “The government wants heat pumps to replace 600,000 gas boilers every year from 2028, and will announce that costs will be removed from electricity in the coming years in its upcoming heat and buildings strategy.”
Building regulations assume gas heating is best
The problem that policy makers face is that for fifty years building regulations have been written on the basis that gas heating is the default preferred means of heating homes. Apart from studio and one-bedroom flats, the economics of electric heating currently do not stack up. Even rebalancing the existing tax system is unlikely to remove much of the price differential. Only heavy government-funded subsidies together with dramatic regulatory intervention can hope even to level the playing field.
Up to now, the main commercial pressure in favour of electric heating has come from buy-to-let landlords who do not want the hassle of having to organise an annual gas safety survey for every property they own. But even that ‘unique selling point’ has now vanished: since April 2021 it is also mandatory for landlords to provide an electricity safety survey too.
If the gas tax change does happen, it will inevitably have serious repercussions for those undertaking energy performance certificate (EPC) surveys. It seems that the role traditionally associated with EPCs – that of guiding householders upon how to decrease expenditure relating to fuel bills – may need to be placed firmly into reverse.