Energy Performance Certificate (EPC) reform: consultation

4. Proposals

This section sets out our proposals to reform EPCs to enable them to better help reaching net zero. This includes proposals on:

• Domestic EPC reform;
• Non-Domestic EPC reform;
• The purpose and validity period of EPCs;
• Digital and accessible EPC format and content; and,
• Quality assurance and the Approved Organisation Framework.

4.1 Domestic Energy Performance Certificate Metric Reform Proposals

Domestic EPC metrics are widely used to provide information on a home, and yet, the current metrics do not accurately reflect the fabric efficiency of a home nor do they support our transition to net zero. To address this, we are proposing to reform the current metrics to provide more holistic information about the efficiency of a home that is relevant to owners and occupiers. We propose the following set of headline metrics:

• Fabric Rating
• Cost Rating
• Heating System Type

These three metrics, based on those advised by the CCC, each support distinct policy purposes – the heat demand, the cost to run the dwelling, and whether the heating system is zero direct emissions compliant.

In addition, we propose to display:

• the Emissions Rating; and,
• the Energy Use Indicator.

These are not intended to be used as headline metrics but provide information that is useful to stakeholders.

Additional information as set out in the draft Energy Performance of Buildings Directive may be required in a separate section to enable future alignment with EU countries. If this is the case, these will also be added to the EPC as secondary information.

Beyond metrics, we also propose to ensure the EPC provides a clear description of the energy efficiency features of the dwelling, showing them in a list. This could include the insulation condition of the walls, as identified in accordance with the relevant assessment methodology. We intend to review the presentation of this information in the current EPC format, and consider whether this can be made more prominent.

4.1.1 Fabric Rating

The metrics currently shown on EPCs do not solely reflect the energy efficiency of the building fabric, and so do not drive the fabric energy efficiency improvements that are key to improving our housing stock. By ‘fabric efficiency’ we mean how well the building retains heat. This includes how well insulated the walls, roof, and floor are.

To address this, we propose to add a metric to reflect the fabric of the home, namely the fabric rating. This is primarily intended to support any future fabric energy efficiency standards. This would provide a clear rating of the dwelling’s fabric efficiency. We have developed two potential options for this metric with BRE:

1. The energy required to be supplied by the heating system to achieve standardised internal conditions, including heating, cooling, and domestic hot water heat demand.

2. The energy required to be supplied by the heating system to achieve standardised internal conditions, including heating and cooling demand but excluding domestic hot water heat demand.

Domestic hot water demand means the heat required to be provided to the dwelling’s hot water system to meet needs based on standardised assumptions.

The first option would mean that the fabric metric reflects measures that improve the efficiency of the hot water system. This is important because reducing heat used for domestic hot water has many of the same benefits as reducing space heating demand. It reduces the energy needed to run the dwelling. Relevant measures include retrofit hot water cylinder insulation, which is a low cost measure and effective at reducing losses from a hot water cylinder, or waste water heat recovery.

However, there are some considerations that should be taken into account. First, including domestic hot water demand could complicate the metric and lessen the focus on fabric measures.

For example, domestic hot water heat demand is affected by the type of hot water system. This means changing the dwelling’s hot water system type could impact the ‘fabric' metric. This is a particular policy concern when moving from a gas combi boiler to an electric system with storage (and consequently adding unavoidable storage losses), such as a heat pump. While this reflects the reality of changing to a system with storage, it could be confusing for an owner to see their fabric rating unexpectedly worsen after installing a net zero compliant system. This does not align with our overarching aim to encourage zero direct emissions systems through EPC ratings.

Additionally, the ‘fabric’ of the building can be seen as a relatively long term feature, while hot water systems may have a shorter lifetime. Similarly, in some circumstances a domestic hot water cylinder may need to be replaced as part of the conversion to a zero emissions heating system. In this case insulating the cylinder may not have a long term impact.

While we recognise the benefits of including hot water demand, our proposal is that it should not be included in the fabric metric. This would ensure that the fabric metric has a clear meaning and role, and is not unexpectedly influenced by non-fabric changes. Changes to the domestic hot water heat demand would be recognised by other proposed metrics, including cost and energy use.

The full BRE report, which includes more detail on each option, is published alongside this consultation. We are seeking your views on these two options: whether a fabric metric should include hot water demand or not.

In addition to the work undertaken with BRE to investigate the principle of a fabric metric, we continue to work with UK Government on development of the assessment methodologies and their outputs. If this work develops an appropriate alternative fabric efficiency metric, we may consider adopting this as the ‘Fabric Rating.’ We therefore invite comments on both the principle of a fabric metric and views on the specific metric developed.

4.1.2 Cost Rating

EPCs serve many purposes beyond net zero. We propose to retain the current Energy Efficiency Rating but rename this as the Cost Rating, as outlined in our 2021 consultation ^[29].

A cost rating would continue to provide important information. For example, it would continue to allow potential buyers or tenants to make a standardised comparison of running costs between properties. It would also continue to provide a mechanism for fuel poverty-focused schemes.

We propose to continue to use a 0-100 rating index rather than a £/m²/yr indicator, as suggested by CCC. This is because the purpose of the Cost Rating is to provide a figure to allow comparison. We think that presenting this information as a £ figure could suggest to users that the figure accurately reflects their predicted running cost, which is not the purpose of such a standardised metric.

4.1.3 Heating System Type

Fabric efficiency alone is not sufficient to reach net zero. The Heat in Buildings strategy notes the need to require the installation of Zero Direct Emissions Heating (ZDEH) systems in our buildings to reach net zero^[30].

To ensure understanding of how the home is heated, we propose for EPCs to provide information as to whether the heating system installed in a dwelling is zero direct emissions compliant.

In addition, certain types of zero direct emission heating systems are more efficient than others. It is useful for homeowners to understand this at a general level to help inform them about the type of heating system they have, and alternatives. This is important because a more efficient system uses less energy to deliver the same amount of heating or cooling as an less efficient system. In turn, this affects the amount it costs to run the system, and has implications for the wider energy system (for example, the amount of electricity required to be generated to heat homes).

We propose to include information about the efficiency of the system on the EPC. We intend to classify systems depending on their efficiency, so that the benefits of more efficient systems are recognised. This would mean that zero direct emissions systems with particular energy efficiency features, such as modern storage heaters, receive recognition for those features over direct electric heaters. Additionally, systems with high efficiency, such as heat pumps, would also be recognised.

This proposal is intended to encourage owners to consider the efficiency of their heating system, and potential alternatives.

Table 1 provides an illustration of how this classification of heating systems might work, in line with the direct emission approach set out in the Heat in Buildings Strategy.

Table 1 : Example of how heating systems could be classified

Type	Examples
High efficiency zero direct emission heating system	Heat pump
Zero direct emissions plus (systems with features to improve efficiency)	Modern electric storage heaters Heat network
Zero direct emissions	Direct electric heating Hydrogen
Heating system with direct emissions	Gas boilers / hybrid heat pumps Biomass heating

4.1.4 Emissions Rating

The existing Emissions Intensity Rating includes both emissions directly from the dwelling and emissions from other places, such as electricity generation. The Heat in Buildings Strategy sets our focus on direct emissions from within the curtilage of the dwelling as this is the only way to remove emissions from our buildings. However, we recognise that total emissions are important to stakeholders who are interested in indirect emissions attributed to dwellings. Therefore, we propose to continue to report this on EPCs, but not as part of the main metrics.

4.1.5 Energy Use Indicator

Following consultation in 2021, we received strong feedback supporting the addition of an energy use metric to EPCs. Energy use takes more aspects of the building into account, including heating system efficiency and lighting. It is a useful as a holistic indicator to show the impact of measures (e.g. insulation or installation of a heat pump) on the dwelling’s total energy use. This metric would show the modelled energy required by the dwelling in kWh/m²/yr and would be complemented by primary energy use^[31] to allow consideration of alignment with the recast EPBD. . We propose to report this on EPCs but not as part of the headline metrics.

4.1.6 Summary of Proposed Domestic EPC Metrics

Table 2 summarises our proposed set of domestic EPC metrics. This table shows the headline metrics which would be widely used in policy.

Table 2 : Proposed domestic EPC primary metrics

Proposed Metric	Description	Display
Fabric Rating	Efficiency of the building fabric	A-G scale and kWh/m2/yr
Energy Cost Rating	Running cost per year (based on £/m2/yr)	A-G scale with 1-100 rating
Heating System Type	Type of heating system	Heating system classification (zero direct emissions or not, and efficiency)

Table 3 presents the secondary metrics that we propose to also display on EPCs. These metrics provide useful information to stakeholders and users however are not directly used by policy. We intend to clearly separate these metrics from those above, to provide clarity to users.

Table 3 : Proposed domestic EPC secondary metrics

Proposed Metric	Description	Display
Emissions Rating	Rating based on the CO2e emissions per square meter	A-G scale with 1-100 rating
Total Energy Use	The total amount of energy used per year	kWh/m2/yr

4.1.7 Proposed Approach to Scaling Fabric Metric

We are interested in views on approaches to designing the scaling of the proposed Fabric Rating to assign bands from A – G (i.e. the A – G distribution against kWh/m²/yr values). We intend to base band C on a good level of energy efficiency (equivalent to the current EER C), to ensure existing commitments to this can be achieved. The approach to scaling the bands is important because it will determine which band dwellings fall into, and the way in which dwellings can move bands.

We have considered linking the cut-off for band C in the Fabric Rating to the cut-off for band C in the Energy Efficiency Rating (EER). This would ensure a degree of consistency between the current EER and the proposed Fabric Rating. As demonstrated in the BRE report, there is not a one-to-one relationship between Fabric Rating and EER, much of which is due to the difference in fuel cost between gas and electricity. We have investigated additional ‘anchors’ such as basing band A on PassivHaus equivalent performance, and band B on typical new build fabric performance.

Alternatively, the Fabric Rating bands could be set independently of EER band C. based on another approach. This would allow greater freedom to set appropriate bands against the distribution of fabric values, at the cost of not having a clear link between Fabric Rating and EER band C, which is the basis of policy commitments.

The full BRE report is published alongside this consultation and contains more details on the options above.

4.1.8 Energy Efficiency Features

Numerical metrics are useful because they quantify the performance of the dwelling. However, they may be less suited to providing clear and actionable information to homeowners and policymakers. For example, it may not be obvious to homeowners how to reach a specific numerical heat demand value, or they may make improvements but miss a threshold cut-off. On the other hand, displaying whether or not the walls or loft, for example, are insulated^[32] is unambiguous^[33]. For this reason, we propose to make details about the insulation level of the dwelling more prominent on the EPC. Details are already displayed in the “Summary of the energy performance related features of this home” section on the EPC.

We will consider whether the presentation of this information is sufficiently clear for users and how it could be improved. This would include information about measures that could be installed to achieve a good level of energy efficiency, and types of zero direct emissions heating systems that warrant further investigation.

Consultation Questions: Domestic Energy Performance Certificate Metric Reform Proposals

1. Do you agree with the set of metrics that we propose to display on the reformed EPC?

2. Are there additional metrics that you think should be included on the EPC, or metrics that you do not think should be included?

3. Considering our proposal to include a Fabric Rating on EPCs, do think this metric should include domestic hot water heat demand?

4. Do you have a view on the way that the Fabric Rating mapped against a scale, for example, how ‘A’ or ‘G’ rated performance is determined?

5. Do you agree with our proposal to give more prominence to the energy efficiency features of the home (such as the depth of loft insulation)?

4.2 Non-Domestic Energy Performance Certificate Metric Reform Proposals

We also propose to reform non-domestic EPCs to focus on the reduction of direct emissions. The variety of building types and activities in Scotland’s non-domestic building stock mean that it is challenging to identify decarbonisation pathways that can be used across all buildings. We propose to present the following set of metrics on non-domestic EPCs:

• Energy Rating (A to G) - based on modelled emissions relative to a reference building to align with the rating system used across the UK;
• Direct Emissions (kg of CO₂e/m²/yr) - the building’s modelled direct emissions to allow a focus on the decarbonisation of individual buildings;
• Energy Use (kWh/m²/yr) - the building’s modelled energy use under standardised conditions to allow comparisons between buildings.

In addition to this, we propose to make the heating system type and fuel more prominent on the EPC.

We propose this set of metrics because it provides a holistic picture of the energy performance of non-domestic buildings. Introducing a relative Energy Rating aligns with the rating system used in other parts of the UK, allowing non-domestic building owners a means to easily understand and compare their building stock across the UK. The relative rating provides a more useful picture of the building’s performance compared to a benchmark, which allows easier identification of ‘good’ performance.

In addition, Direct Emissions shows building owners the emissions directly related to their building, to help them reduce this to zero. The inclusion of Energy Use allows users to compare buildings based on standardised conditions, for example when considering a purchase or lease.

Table 4 : Proposed non-domestic EPC metrics

Proposed Metric	Description	Display
Energy Rating	Based on modelled total emissions relative to a reference building	A-G scale with 1-100 rating
Direct Emissions	Based on modelled direct emissions	kg CO2e/m2/yr
Energy Use	The modelled energy use under standardised conditions	kWh/m2/yr

Consultation Questions: Non-Domestic Energy Performance Certificate Metric Reform Proposals

6. Do you agree with the set of metrics that we propose to display on non-domestic EPCs?

7. Are there any additional metrics that you think should be displayed, or any in the proposed set that should not be included?

4.3 Purpose and Validity Period of EPCs Proposals

4.3.1 Purpose of EPCs

It is critical that EPCs provide clear and useful information because for many people in Scotland EPCs are the first piece of information they receive that helps them understand the energy efficiency of their home. We intend that this remains the role of EPCs and we do not propose for EPCs to be a substitute for a more detailed or specialist retrofit advice or technical survey, such as assessment following PAS 2030/2035.

Instead, EPCs have a key role to play as a first step towards improving energy efficiency and reaching zero direct emissions. EPCs will continue to allow buildings to be compared and will provide easily accessible information to help owners understand potential options and signpost next steps.

EPCs are already widely used for various purposes. EPCs will continue to fulfil their current function in other policy areas, including fuel poverty, area-based schemes, and UK-wide schemes. In addition, reform may allow EPCs to be used in more situations, for example for use as evidence in demonstrating the home meeting a certain standard of energy efficiency for any future regulations.

4.3.2 Validity Period of EPCs

In line with our intention that the information EPCs contain is as useful as possible, we also propose to ensure that EPCs are more up to date and better reflect the building at the time they are used. To do this we propose to reduce the validity period of the EPC from 10 years to five. This would mean that, at the current trigger points (such as sale or let to a new tenant), an updated EPC would be needed if the building does not have one that was issued in the last five years. This is intended to provide prospective owners and tenants with more up to date information about the building. This proposal would not require a building to have an EPC other than at existing trigger points.

Consultation Questions: EPC Purpose and Validity

8. Do you agree with us that the primary role of the EPC should be to provide basic energy efficiency information for the purpose of comparison and act as a prompt to consider retrofit options?

9. If you disagree or have further comments about the role of the EPC, please provide your comments.

10. Do you agree that the validity period of EPCs should be reduced from 10 to five years?

11. We welcome any views on the usefulness of our proposals for other relevant policy areas, such as fuel poverty or the delivery of government schemes. Please provide any comments you wish to share.

4.4 Digital and Accessible EPC Format and Content Proposals

EPCs need to provide clear and accessible information so that current and potential owners and occupiers, and other stakeholders, understand the performance of the dwelling and measures that could be installed to improve it. The addition of new metrics and content to EPCs has the potential to further complicate them. To alleviate this risk, we are proposing to:

• Move from PDF format EPCs to webpage format;
• Add additional signposting on the EPC to suggest steps that could be taken to improve a property;
• Improve data access provisions to allow more effective use of EPC register data;
• Consider future application of EPC data to the development of Green Building Passports.

4.4.1 Webpage EPCs

Scottish EPCs are currently presented on the register as a downloadable Portable Document Format (PDF) file. This format has a number of limitations. These include:

• Difficultly viewing on mobile devices;
• Issues correctly reading the information for users of accessibility technology such as screen-readers;
• Presenting fixed and unchangeable data;
• Relying on an additional step to verify the authenticity of the document (i.e., the Report Reference Number must be searched on the EPC register to confirm the EPC is genuine).

We also know that adding additional metrics and features to EPCs has the potential to introduce confusion. This is particularly important if some metrics relate to any future regulations while others are for information only.

We therefore propose to move EPCs to a webpage format. This offers greater flexibility in the way information is presented. For example, this would allow EPCs to be redesigned to meet modern good practice and ensure EPCs are inclusive to all.

It could allow information relevant to regulations to be shown to all, but more complex information to be shown only to users who choose to see it. Additionally, it could allow additional explanatory text to give context, particularly to ratings. In future, a webpage format EPC could also act as a platform for other services, such as an occupancy-based assessment.

To develop webpage EPCs, we propose to undertake a user-centred redesign to understand the needs of people who interact with EPCs. This is intended to inform the way that information is presented on the EPC, and ensure it is accessible and its meaning is understood. We would ensure consideration is given to how users without internet access can continue to engage with EPCs. We would also ensure the format is compatible with physical printing, to allow inclusion in the Scottish Single Survey (Home Reports) and other uses.

4.4.2 Signposting and Further Steps

As set out above, EPCs have a clear and important role to play as the first step in a homeowner’s retrofit journey. We intend to make clear on the document that the EPC is the result of an unintrusive survey. It is not a substitute for more advanced survey of the property, which may be required where more complex measures are considered, such as internal wall insulation.

However, moving to a webpage EPC will allow them to link directly to resources that help owners take the next steps, such as Home Energy Scotland’s advice service or information on grants, which could be dynamically embedded in the EPC webpage.

In addition, if the property lies within a heat network zone identified by relevant criteria, we propose that the EPC includes information on available connections to heat networks or plans for future work in the area, where this information is available.

Moving to webpage format also offers potential future data linkage opportunities, such as the potential to integrate data based on metered energy use.

4.4.3 Data Access

Alongside an updated EPC format, modernisation of the EPC Register offers the potential to improve the use of EPC data. Making full use of this dataset offers significant advantages to those involved in delivering net zero.

Non-personal data from all valid EPCs on the Scottish EPC Register is published quarterly^[34]. Since first publication in 2018, EPC data has been of interest to many diverse stakeholders including local authorities, researchers, and commercial businesses. In the last year, the Domestic Energy Performance Certificate dataset was the second most frequently accessed page on statistics.gov.scot, with over five thousand page views.

EPC data also has an important role to play in supporting strategic planning of heat decarbonisation through Local Heat and Energy Efficiency Strategies, developed by local authorities.

To further enable research and use of this data, we intend to expand this dataset to include historic EPCs (i.e., EPCs that have been superseded by a more recent certificate). This will allow stakeholders to understand trends in energy performance over time, which is a common request. We propose these superseded EPCs would be shown in the dataset, but the latest available EPC would be presented to users searching the EPC register portal by address.

In addition to this, we propose to introduce Application Program Interface (API) access to the Scottish EPC Register. This would allow stakeholders to access the register in real time, rather than relying on periodic dataset uploads. This would include access to:

• Domestic EPCs;
• Non-Domestic EPCs;
• Energy Action Plans;
• Display Energy Certificates.

This could, for example, allow owners of multiple properties to monitor the EPCs of their stock.

Moving to an API accessible register has further advantages in allowing the register to connect to other databases. This could, for instance, allow the EPC register to use heat network data to identify whether a building is in a current or planned heat network zone.

Consultation Questions : Digital and Accessible EPC Format and Content

12. Do you agree with our proposal that EPCs should move from PDF to webpage format?

13. Do you agree with our proposal to improve signposting to further support and advice schemes on the EPC?

14. Do you agree historical EPCs should be publicly accessible on the EPC register (while clearly marked as historic)?

15. Do you agree that the EPC register should be accessible by API?

16. Do you have any further comments on our proposals to move to a digital and accessible EPC?

4.5 Quality Assurance and Approved Organisation Framework Proposals

The quality assurance system underlying EPCs must be robust to ensure they adequately deliver their current and potentially enhanced future role. Existing Government targets and consumer support to improve homes are often linked to EPC ratings, and the Heat in Buildings (HiB) Strategy sets ambitious targets to improve the energy efficiency of the building stock. It is vital that EPCs provide accurate information to consumers and to stakeholders who use them.

We propose to update the existing Operating Framework. We will draw from previous independent analysis and work with Approved Organisations and the UK Government to identify best practice and improve and maintain standards across Energy Assessors working in Scotland.

We propose to review and update the auditing regime of Approved Organisations by introducing a smart auditing process for EPCs, similar to that used in England and Wales. Smart auditing is risk based auditing based on set criteria. If an EPC was to meet certain criteria an audit review would be triggered. This would use the EPC Register to identify and request audit of EPCs and ask for the outcome of an audit to be reported. This would allow for central oversight of EPC audit performance and allow for subsequent targeting of reviews and iterative updating of auditing criteria as issues emerge. Findings may also then inform any updates to training requirements and the Operating Framework.

Consultation Questions : EPC Auditing and Assurance

17. Do you agree with our proposals to review and update the audit and assurance requirements for EPCs in Scotland?

18. Please detail any additional assurance activity that you think would be appropriate to enhance the accuracy and reliability of EPCs.

4.6 Potential Future Reform

We know there are other potential changes that could be made to EPCs, including on:

• Actual energy use data
• Green Building Passports

Our current EPC reform proposals do not directly address these aspects, but they are under review.

4.6.1 Actual Energy Use Data

Stakeholders have told us that the use of modelled data for EPCs is flawed in certain contexts. This is because there are risks of assessments misidentifying characteristics of buildings, and of models over or underestimating the demand of buildings and their occupants.

Many of these risks will be mitigated through our proposals for quality assurance of EPCs. We do not currently plan to move away from using modelled data for EPC ratings. Standardised modelled data enables the building stock to be compared on a like-for-like basis, regardless of the current occupant’s behaviour. This is helpful for understanding the building stock as a whole and enabling policies to be developed that apply to every building equally.

This is why our proposals include only metrics based on modelled data.

However, we do understand that there may be benefits in a metric that displays or is derived from the actual energy consumption of the building, such as those developed through DESNZ’s Smart Meter Enabled Thermal Efficiency Ratings project^[35]. This kind of metric would allow current and potential occupiers to understand how the building works in practice.

To help us understand this better, we have commissioned ongoing research on the use of energy consumption data on Scottish EPCs. This research looks at the potential role of meter data, the benefits it could bring to stakeholders, and possible barriers and opportunities. Part of this research also considers the potential for future work to explore the relationship between values calculated through SAP and metered data.

We will continue to review this area and will make any additional required changes at a later stage.

4.6.2 Green Building Passports

Green Building Passports (GBPs) are documents that provide information about a building including the EPC rating, previous renovations or a record of work carried out, any relevant warranties, energy use data, housing standard and water efficiency etc. GBPs could be used to supplement EPCs by storing more detailed information about buildings, and providing evidence of retrofit insulation. The CCC recommended^[36] the roll out of digital GBPs across the housing stock.

In 2021, the Scottish Government commissioned research through ClimateXChange to review learning from existing GBPs across Europe^[37]. The research found that international approaches to GBPs have the potential to gather holistic information about a property’s energy use and its roadmap to net zero. However, the research also found a lack of robust evidence connecting GBPs with increased retrofit activity, due to many projects being in the early phases. It found that challenges have been encountered with implementation, which could take significant time and resource to overcome.

We recognise that the reformed EPC would not provide everything needed to support retrofit, and we see value in an address-level database for Scotland. At this stage we are not proposing to prioritise the development of GBPs. However we intend that our work to develop the EPC register into a more flexible service could support future development of GBPs.