Energy Efficient Scotland - improving energy efficiency in owner-occupied homes: consultation analysis

Chapter 3: Cross-cutting themes

A number of cross-cutting issues were raised across responses to questions posed in the consultation. In particular, issues were raised in relation to challenges with older buildings; the impact in rural areas; how to ensure compliance with the standard; concerns regarding the EPC certification process; the financial impact on owners; how best to incentivise change; the knock-on effect on the housing market; and the need for more extensive information sharing. These are explored below.

3.1 Challenges of older and listed buildings

Many respondents raised concerns in relation to improvements to older and listed buildings. Specifically, their concerns related to: the high costs of energy efficiency improvements in older properties; changes which would impact negatively on the fabric or character of the property (particularly listed properties); and limitations to changes that can be made to some older properties, including listed building regulations that preclude some types of improvements, for example cladding or double glazing.

In addition, introducing a standard "retrospectively" to address deficits in older properties was considered by some to be unreasonable.

"Agree that a standard is needed as the basis of achieving targets, BUT this must not be a 'one size fits all': the standard must have inbuilt flexibility to cater for buildings of different construction types. Otherwise there would be a very high risk of wasting money and carbon on inappropriate works, and further money and carbon on subsequent rectification. The methodology for calculating the standard must not impose inappropriate modern criteria upon historic and other buildings of traditional or unconventional construction, and should take into account the actual performance of materials in historic and traditional building fabric. The ability to make this legally-binding has to be questioned" (Professional or representative body).

Many respondents highlighted challenges likely to arise in relation to older properties and the need to acknowledge that achieving EPC Band C may not be possible in some of these properties. Some felt that the standard to be attained should vary depending on the age of the property, and emphasised the importance of having people undertaking the assessments who have the appropriate skills and expertise in the range of available technologies and the building type under assessment. 

In relation to EPC assessments, some respondents argued that these were based on assumptions about the building, including occupancy behaviour, building age, construction, location, hot water and heating systems. 

Some respondents felt there was a case for exemptions for properties where the full range of possible fabric energy efficiency improvements had been applied but EPC Band C still could not be attained. 

A few respondents also highlighted the challenges for owners living in, for example, a tenement which can make it difficult to get agreement from all owners to undertake any improvements to the building. 

Some respondents felt that any legally-binding standard should only apply to new-build properties and that for other properties it should be optional, with better advice and incentives provided.

3.2 Impact on rural areas

Some respondents raised concerns about homes in rural areas in particular, pointing out that there is a higher proportion of older properties in these areas which could make any minimum standard more difficult and costly to achieve. 

Respondents were concerned that introducing the standard would have a significant impact on poorer rural households due to the substantial number of homes in fuel poverty (and extreme fuel poverty), and the limited options for heating systems. Some noted that many rural properties were unlikely to ever be able to meet EPC Band C without significant work and high costs.

Some respondents also noted that homeowners with the least energy efficient homes are often those on low to middle incomes who would struggle to pay for improvements, although they would not necessarily be on benefits or classified as in fuel poverty. They were concerned that these people could face hardship if the standard is made legally-binding.

A few respondents noted that homeowners and house builders in rural areas have to spend more money on homes off the gas grid, compared to an identical home on the gas grid. This was seen to be unfairly and unjustly penalising rural areas, homeowners and house builders for no other reason than the fact that they do not use mains gas.

Some respondents also raised concerns about the availability of skilled tradespeople to undertake the volume of improvement work which would be needed if the standard were to become legally-binding, with particular concerns about island communities who already have insufficient tradespeople to carry out work.

3.3 Ensuring compliance

Many respondents referred to the importance of ensuring an effective regime to monitor compliance with the standard. Some respondents called for strong enforcement and penalties for non-compliance.

A few respondents noted concern about the capacity of local authority planning departments to take on any compliance role as they were considered to be already stretched. One respondent called for a national central agency to oversee implementation of any such standard. Another noted that minimum energy efficiency standards may be better understood and publicly acceptable if seen as part of a wider set of housing quality standards, with an emphasis on health, safety and well-being, such as the Repairing Standard (RS) for private housing, and the Scottish Housing Quality Standard (SHQS) for social housing.

Some respondents were also of the view that there would need to be some form of accreditation of EPC assessors to give homeowners confidence that the rating and recommendations of energy efficiency improvements given at point of survey is accurate.

3.4 The EPC 

In responses to a number of the consultation questions, some respondents raised concerns about the appropriateness of the EPC as the mechanism for measuring energy efficiency in people's homes and whether it was the right process by which homeowners should be held accountable to any legally-binding standard. Some specific concerns raised by respondents included concerns that the U-values used in the method are based on calculations rather than actual representative in situ field measurement; a concern that, depending on the building, the energy rating would vary with fuel type; a concern that EPCs are encouraging homeowners to move to higher carbon, more polluting fuels such as coal and oil simply because they are cheaper because the EPC Energy Efficiency Rating (EER) calculation is a measure of energy cost per square metre.

Respondents made a number of suggestions for alternative energy efficiency improvements which included:

• the Environmental Impact Rating part of the EPC being used as an alternative measure in the first instance
• a strong role for Local Area Energy Planning as part of the wider framework of energy efficiency improvements to deliver building de-carbonisation
• a smarter, more accurate and valid new system of Carbon Performance Certification, harnessing digitalisation and better measurement of building carbon performance. A new system of Carbon Performance Certification could make use of smart metering data to derive accurate annual estimates of emissions at property level.

3.5 Financial impact on homeowners

Many respondents raised concerns about the financial impact on homeowners of meeting the standard. Some highlighted that it would disproportionately affect some groups of people including older homeowners (on fixed incomes who may be less able to find funds to make the changes required, and who may struggle to find trusted traders); people living in fuel poverty; people living in rural areas (as already noted); people living in homes which have an EPC Band of E, F or G; and owners of older, and particularly listed, properties. 

Some respondents emphasised the importance of homeowners being able to file for exemption for free and as easily as possible, whilst emphasising that there should be strict conditions under which not meeting the target could be considered acceptable.

Some respondents felt that the standard should only be legally-binding if financial assistance was available to improve properties.

3.6 Incentivising change

Many respondents made reference to the need to incentivise change should the standard be legally-binding. Some respondents emphasised that consumers should not be disadvantaged by any legally-binding standard based on the type of home that they owned; while others argued that there needed to be a mix of incentive-based policies and direct regulation, balancing the carrot and stick approach across the whole policy spectrum. 

Suggestions included the need for loans with long pay-back periods; government grants; the potential of extending the Renewable Heat Incentive,^[20] currently due to close in 2021, to help with the installation of low carbon systems and to reduce 'distress purchases' of a like-for-like fossil fuel heating system; a boiler scrappage system; and tax discounts (including Council Tax discounts). Some felt that any support should be means-tested whereas others argued that it should not.

3.7 Impact on the housing market

Some respondents raised concerns about the impact on the housing market of making the standard a legal requirement. Respondents raised concerns that costs associated with making improvements to comply with the standard could result in fewer properties coming to market. Respondents raised concerns in particular about the potential lack of availability of properties for first-time buyers. Some noted that requirements under the standard could discourage older people, in particular, from downsizing into smaller and more suitable homes.

Some respondents felt that it could impact on the flexibility of the housing market and people's ability to buy homes, establish households, move jobs, downsize or fulfil their duties as personal representatives of the deceased in the case of inherited properties. In raising these concerns, one respondent described the additional costs as "an increased transactions tax" which would not only add to the cost of a property sale, but could also deter transactions, lower prices and freeze the market.

3.8 Improving information sharing

Some respondents highlighted the importance of ensuring that members of the public were well informed about options for energy efficiency improvements, particularly if the standard were to become legally-binding. Suggestions included ensuring that consumers are made sufficiently aware of new and efficient technologies to enable them to make informed decisions; and making case studies and demonstration projects available to highlight the benefits of taking action.

Some respondents also highlighted the need for consumers to be aware of the likely financial impact of any legally-binding standard to enable them to plan their finances accordingly. 

A few respondents also highlighted the importance of ensuring that there is widespread understanding of EPC/energy ratings, noting that many consumers currently do not take the energy rating into account when purchasing a property.

Others noted the importance of guidance encouraging consumers to take longer-term decisions about their property.