Energy Performance Certificate reform: consultation analysis

Purpose and Validity Period of EPCs Proposals

Key Findings

Across the questions asked in this chapter, the same issues tended to emerge repeatedly.

• There was majority agreement 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 schemes (Q8)
• There was minority support for the validity period of EPCs to be reduced from 10 to five years (Q10)

Key themes

• There were calls for funding packages and grants to be made available for people to undertake retrofit changes that might be suggested on an EPC
• Concerns that EPCs could be used to force people into undertaking retrofit measures or in preventing house sales (mainly noted by individuals) (the Scottish Government made no proposal to prevent house sales in the EPC consultation).
• There were some comments that the decision to obtain a new EPC should be the choice of a property owner. Conversely, some respondents felt there are specific points that would or should trigger the need for a new EPC
• The reduced validity period should only apply to new buildings. This was because some heating systems or generic retrofit recommendations are perceived to be inappropriate for some housing stock. Allied to this, there were views that EPCs should not provide retrofit options and advice that could contradict a full technical survey
• A key advantage to a reduction in the validity period of an EPC was that it allows for the provision of more up-to-date and accurate information. However, there were also some calls for EPCs to provide clear, good quality information and signposting to services

Next most frequent themes

• Suggestions for variable validity periods were suggested by some respondents, depending on the type of property and work already undertaken on a property
• Some respondents – primarily individuals – felt that EPCs are of limited usefulness and that specialist retrofit advice from other sources is more useful
• There were some concerns from organisations that changes could have an impact on the housing market in terms of reducing the number of available properties
• There were some queries over a potential lack of assessors to undertake the necessary work

Other themes

• EPCs were perceived to be useful for a range of policy areas as well as better targeting of resources for schemes. However, there were some concerns this could lead to higher levels of fuel poverty, given that electrical heating systems are more expensive
• Some organisations felt the full implications of EPC reform cannot be understood until the legislation for the proposed Heat in Buildings Bill is published
• Some respondents expressed views that the development of SAP 11 and the associated SBEM and RdSAP methodologies need to reflect the impact of market changes

Purpose of EPCs

Q8: 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?

A majority of respondents agreed 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. Once again, there were higher levels of agreement from organisations than individuals. Among organisation sub-groups, those with highest levels of agreement were in construction, involved in the EPC process or housing providers.

A total of 220 consultation respondents provided commentary in support of their initial response to this question.

A small minority of respondents across most sub-groups noted this was a sensible or logical proposal but provided little by way of additional information. A small minority of organisations agreed with the consultation paper and noted that:

• EPCs should not be used as a substitute for more detailed surveys or specialist technical surveys needed to obtain property-specific information and retrofit advice
• EPCs should not provide retrofit options and advice that could contradict a full technical survey.

Similarly, a minority of third sector organisations suggested an EPC should focus on providing basic information on the carbon emissions of heating systems and whether they are compliant with heat regulation standards. A small minority of representative bodies suggested that comments on an EPC should be limited to a description and what might be improvable. There were some comments that EPCs should not be used to prompt retrofit measures as RdSAP is too basic. South Lanarkshire Council commented:

“It is also important that Energy Performance Certificates remain a positive tool for gathering robust, credible and timely information about properties and should not become a mechanism that penalises homeowners who are unable to afford the installation of energy efficiency measures, even with the offer of grant subsidies to cover part of the cost.”

There were high levels of agreement from organisations 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. However, there were also some qualifying comments that EPCs are too generic to be able to provide retrofit advice specific to a particular property.

A small minority of organisations criticised the current perceived SAP methodology^[9]. This included comments that it can create unreliable results or can lead to perverse recommendations for retrofit. An organisation providing heating control systems suggested there is a need for amendments to RdSAP to ensure householders are offered a wide range of options. A small minority of organisations also noted that the development of SAP 11^[10] and the associated SBEM and RdSAP methodologies need to reflect the impact of market changes.

A minority of respondents outlined a number of secondary roles they felt EPCs could adopt. These included:

• To provide evidence of compliance with current and future regulatory standards for the fabric efficiency of the property
• To inform key datasets used by local authorities
• To signpost information on how to decarbonise heating systems and how to make properties more resilient to climate impacts. Also, to provide signposting to sources of support for retrofit advice
• The provision of clear guidance and information to ensure that unnecessary retrofit interventions are not undertaken
• To provide links to competent installers who can undertake retrofit work
• To provide a realistic idea of the energy costs of a building and the likely levels of energy bills

A significant minority of respondents raised issues of concern. A negative impact on the housing market was noted by a small minority of organisations – mainly housing associations and local authorities. They felt if an EPC rating is lowered, a knock-on effect could be to reduce the number of properties available for rent and increase levels of homelessness. For a significant minority of individuals, there were concerns that an EPC could be used to force people into undertaking retrofit measures or that this could be used to prevent house sales.

A number of other issues were raised by respondents. These focused on the need:

• To have good quality information provided on an EPC.
• For EPCs to be simple, clear, concise, user-friendly and easy to understand across a range of interested audiences
• For an assessment approach for mixed-use and multi-owner buildings, with options for whole building assessment
• For homeowners to be offered financial support, grants and advice. These comments came primarily from individuals
• For skilled tradespeople to undertake the necessary work. That said, there were some concerns that there is a lack of suitably trained and skilled tradespeople at present. There were also a small minority of comments that there is a need for retrofit professionals who can consider a holistic approach that will include advice on insulation, ventilation, heating provision etc

Other comments

A small minority of organisations referred to Building Performance Certificates or Passports (GBPs). Advantages included that they provide more detail than EPCs and focus on more than a fabric first approach. A combination of EPCs and GBPs could offer owners more bespoke advice about their property and provide homeowners with a clear roadmap to decarbonising their property.

While not related directly to the consultation question, a significant minority of respondents – primarily individuals but also some organisations – raised the issue of property type, with suggestions that this should only apply to new buildings and not older buildings.

A small minority of respondents – mostly individuals – noted that EPCs are of limited importance and usefulness in relation to property sales or purchases. There were references to the EPC being a necessary formality but many buyers or sellers placing little emphasis or priority on them.

Q9: If you disagree or have further comments about the role of the EPC, please provide your comments.

A total of 98 respondents provided commentary to this question, a number of whom reiterated comments made to the previous question.

A small number of organisations – primarily in the construction sector – felt there is a need for better information or tie in to other schemes. For example, to tie in with the Scottish Government’s draft Heat in Buildings Strategy.

Attendees at a workshop suggested there should be health warnings provided to users to ensure EPCs are not used inappropriately.

Themes echoed from the previous question included:

• EPCs play an important role in measuring compliance with national policy targets
• The role of an EPC is to demonstrate to a property owner what can be done to improve the property and reduce emissions
• EPCs should not apply to some types of home
• Geographic location can be a restriction in terms of available heating systems and / or retrofit opportunities
• Dislike of EPCs in general or that they are of limited use
• EPCs should provide information on the flexibility of a property
• When providing information, EPCs should consider the full range of technologies available to help reduce emissions
• EPCs should not be used to enforce any changes to a property and should not be a prohibitive factor in the sale of a property. This was allied to concerns over the cost of retrofit recommendations and requests for a package of supports for homeowners and landlords, including grant funding
• An EPC needs to be simple, clear, concise and user-friendly

Validity Period of EPCs

Q10: Do you agree that the validity period of EPCs should be reduced from 10 to five years?

A large minority of respondents agreed that the validity period of EPCs should be reduced from 10 to five years. Support levels for the reduction in time period were higher among organisations than individuals. Across organisation sub-groups, highest levels of agreement came from organisations in the third sector and those involved in construction.

A total of 234 respondents provided commentary in support of their initial response to this question.

A key theme – cited primarily by organisations across all sub-groups– was that a reduced validity period for EPCs would allow for more up to date and accurate information. This information could be used for a variety of reasons including being of benefit to retrofit programmes and Local Heat and Energy Efficiency Strategies (LHEES). More up-to-date information could also feed into data on housing stock. In turn, this would be useful for policy makers in terms of targeting resources and measures to meet climate change, achieve poverty targets and help future planning. Also, this would help to provide a more efficient assessment of existing buildings and data could be used to understand the condition of Scotland’s housing stock.

A small minority of respondents – mostly organisations – also referred to this as being a useful factor in moving towards net zero targets. Some third sector respondents felt this would give homeowners the information they need to start planning their transition to net zero and consider retrofit work.

A large minority of organisations across most sub-groups suggested there should be a mandatory requirement for a new EPC at specific trigger points. These triggers might include:

• The sale or lease of a property
• Upgrades that will affect a SAP rating
• Any changes such as a new heating system or improvements to the fabric of the building that impact on the energy performance of a building
• When there is a change in tenancy or compliance with EESSH2^[11]

There were also some suggestions from a small minority of respondents across sub-groups for an EPC to be required as part of a building warrant when work is undertaken in a property.

However, another key theme, cited primarily by a small minority of individuals, was that it should be a choice for building owners to opt for a new EPC. However, they noted that certain trigger points such as buying or selling a property or when there are material changes to a property would prompt a new EPC anyway. It would appear that some respondents were uncertain as to when a new EPC would be triggered. Some noted there is little benefit to obtaining a new EPC if no changes have been made to a property as this will not lead to improved outcomes.

Retaining the status quo was advocated by a small minority of respondents across a number of sub-groups. The reasoning behind this was that there is no need to reduce the validity period as certain triggers such as a new tenancy will require a new EPC.

A small minority of respondents noted that shortening the validity period could lead to a waste of resource. This is particularly if a property already meets the minimum EPC requirement and nothing has changed since the last EPC was undertaken.

A small minority of respondents gave suggestions for alternative time periods, although there was no consistency in these.

A key concern highlighted by a significant minority of respondents related to increased costs if the validity period of an EPC is reduced. There were comments this would bring in additional costs when cost of living increases have had a negative impact on many households, RSLs and council landlords. It was felt by some that these additional costs would not be justified unless changes had been made to a property. A housing association noted this would place a significant burden on staff resources and budgets without delivering any real outcomes. Linked to this, there were some concerns of a reduction of properties available for purchase or rental or increases in rents.

In line with concerns over costs, a small minority of respondents requested incentives and funding to be made available.

There were also some concerns from a small minority of respondents (mostly organisations), over a potential lack of assessors to carry out the additional workload that would be created. For example, a potential shortfall of assessors will limit the practical viability of a reduction in the validity period of an EPC.

Pre-empting a later question, a small minority of organisations felt that in the longer term, it would be useful to move to live digital EPCs so that records would be updated.

Alternative suggestions were made by small minorities of organisations. These included:

• Variable validity periods
• A longer time between assessments for properties that meet a particular energy efficiency level; or exemptions where a property has reached its maximum rating and has a decarbonised heating system; or a link to compliance with EESSH
• Exempted private properties where there has not been a change of ownership

Impact on other policy areas

Q11: 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.

A total of 205 respondents answered this question. A number of these focused on fuel poverty and / or the delivery of government schemes and echoed themes outlined in the consultation paper. A number of responses also appeared to have been based on the assumption that required ratings and any other changes would be implemented. This would mean the proposals would be useful to other policy areas. It was felt that a more accurate EPC would help to inform policy across a range of areas.

A significant number of respondents commented on the need for EPCs to provide more accurate and property-relevant information. There were also comments on the limitations currently presented by EPCs. These included that they can only provide a basic measure of a building’s performance. Additionally, they do not provide an accurate picture of energy costs or likely carbon emissions.

Fuel poverty

A key impact – and concern – was identified by a small minority of respondents across most sub-groups. This was a perception amongst such respondents that the requirements of these proposals are likely to lead to higher levels of fuel poverty. This was because electrical heating systems are more expensive to install than some other heating systems and have high running costs. As such, they could increase fuel poverty rather than reduce it. Additionally, a small minority of mostly organisations felt that fuel poverty would not be addressed. This was because it is the result of a complex range of influences and not solely determined by the building that is lived in. However, there were also a few suggestions that EPCs could be used with smart meter systems and other demographic datasets. This would help identify and provide support to those at greatest risk of fuel poverty.

Local Heat and Energy Efficiency Strategies (LHEES) and heat networks

A small minority of respondents – primarily local authorities – referred to reformed EPCs as having more reliable and useful data across a range of policy areas.

The Energy Efficiency Standard for Social Housing (EESSH)

A small minority of respondents referred to EESSH2 and felt that EPC reform would have a direct impact on the ongoing review of EESSH2. That said, there was a request for more clarity on this.

The Heat in Buildings Strategy

A small minority of organisations noted that a more accurate EPC would help to inform monitoring of progress against Heat in Buildings Strategy targets. This was because they would provide a more accurate picture of energy use.

Funding Schemes

Similar numbers of respondents also suggested that improved EPCs would allow for better targeting of resources for schemes. These included area-based schemes (ABS) or Energy Company Obligation (ECO) schemes.

Another key concern was that of the affordability of any recommended measures to reach net zero targets. A significant minority of respondents, particularly within representative bodies, local authorities and individuals requested funding and grants to be made available. These would help to incentivise property owners to undertake the necessary retrofit measures and installations required. There were also requests for funding to be available to all properties, including those with low EPC ratings. Many of these respondents perceived the Scottish Government to have a role in the provision of grants and funding, either directly or indirectly via specific schemes such as the Warmer Homes Scotland scheme administered by Home Energy Scotland.

Other comments

A number of comments were made that echoed themes that emerged at previous questions. These included that there is too much emphasis on the installation of heat pumps, which are not suitable for many properties. There were suggestions for a different approach to these types of property, particularly as many need an individualised assessment rather than an EPC based on standardised modelling. Allied to this latter point, there were some calls to consider all low carbon alternatives.

Pre-empting a later question, a significant minority of respondents called for the Scottish Government to provide signposting on EPCs. For example, to help homeowners access competent installers or to access guidance and advice on retrofit approaches and the benefits of different heating systems. This issue is covered in more detail in the following chapter.

Other references echoing responses to previous questions included the need for more trained assessors so that they can produce EPCs utilising the requested ratings.