Energy Performance Certificate reform consultation: response

1. Executive Summary

This Scottish Government response to the 2023 EPC Reform consultation sets out our final decisions on the reforms we will make to EPCs to improve their quality and better align them to net zero policy objectives. It sets out our intention to introduce new EPC regulations in the Scottish Parliament during 2025 and to bring them into force in 2026. These reforms include:

• adoption of a new EPC rating system for domestic buildings, which will give clearer information on the fabric energy efficiency of a property; the emissions, efficiency and running costs of its heating system; and the cost of energy to run the home to standardised conditions;
• adoption of a new EPC rating system for non-domestic buildings;
• adoption of a redesigned EPC certificate, based on a first phase of user testing, and to be followed by a second phase prior to regulations coming into force;
• reduction of the validity period of EPCs from 10 to five years to ensure consumers have more up-to-date information;
• development of a new dynamic EPC user interface to sit alongside the published EPC;
• introduction of strengthened operational governance arrangements for EPC assessors and Approved Organisations to enhance quality assurance for consumers;
• establishing a new technical infrastructure to replace the current Standard Assessment Procedure (SAP) with the new UK Home Energy Model (HEM) calculation methodology, together with a new EPC Register;
• continuing to work with the UK Government and devolved administrations where we share elements of the EPC regulatory system across the UK internal market

Rating system and redesigned Domestic and Non-Domestic certificates

We will introduce a new set of ratings to appear on the Domestic EPC. These will include a Heat Retention Rating to provide information on how well-insulated the home is, on an A-G scale. Alongside this will be the Heating System Type Rating, showing the current and potential emissions category of the main heating system, thermal efficiency and running costs. The EPC will also include the Energy Cost Rating which will be based on the cost of energy to run the home to standardised conditions and will be in line with the current Energy Efficiency Rating or SAP Rating.

We are finalising how we intend to show these ratings on the redesigned EPC, including through user testing and refinement with consumer groups. The designs set out in the response show a potential approach, based on consumer testing carried out during 2024. We will continue to engage with users to refine these further in advance of regulations coming into force.

Alongside the design and ratings, we have set out our revised approach to EPC ‘recommendations’. We have listened to stakeholders who told us that we need to be clear on the basis on which advice is provided in an EPC and therefore we will rename these suggested actions as Potential Improvement Options.

We will also reform Non-Domestic EPCs to provide clearer information about buildings, in line with our consultation. We will introduce a new set of non-domestic EPC ratings. These will include the Energy Efficiency Rating based on modelled emissions from regulated energy use^[1], responding to business’ calls that this should be in line with the rating system used elsewhere in the UK. Alongside this the EPC will show the building’s Direct Emissions based on modelled direct emissions from regulated energy use. The EPC will also show the building’s Energy Demand under standardised conditions. We will display these new ratings on a redesigned Non-Domestic certificate.

Operational Infrastructure

Alongside these changes to the content and design of EPCs, we will also reform the Technical and Operational Infrastructure that underpins the quality of the EPC system. We will replace the current Standard Assessment Procedure (SAP) with the new Home Energy Model (HEM) calculation methodology, together with developing a new EPC Register that can interface with the UK Government’s cloud calculation service for HEM.

We will reduce the validity period of EPCs from 10 years to five to ensure people receive more up-to-date information about buildings they are considering buying or renting. We are undertaking further research to consider how an interactive EPC could benefit users. We will modernise the provisions in regulations relating to sharing non-personal data, to allow stakeholders to develop tools to use EPC data, including organisations such as Registered Social Landlords to more easily see how their stock changes over time.

We are finalising our review of the current Operational Framework that governs the delivery of EPCs in Scotland to ensure that assessments are undertaken to the highest quality standards by competent and qualified assessors. We will implement reforms through a revised Operational Framework to come into force alongside the revised regulations in 2026. We are working with other governments across the UK to agree a common approach to issues around accreditation, skills, and quality assurance.

Our response sets out our position on EPC reform. In the related consultations on proposals for a Heat in Buildings Bill and Social Housing Net Zero Standard, we also considered the role that EPCs could play in supporting mandatory standards. The Scottish Government is still considering its response to these consultations and will set out its position separately, when responding to them, on how EPCs could support proposed mandatory standards.

We intend to lay regulations during 2025 to bring these changes into force in 2026. This timetable will give time for the assessor market and those in the property letting and conveyancing sectors to prepare for these changes. We have listened to stakeholders’ calls for the introduction of the UK Home Energy Model to be used as the basis for reformed Domestic EPCs, and so the final date on which the regulations come into force will be dependent on when HEM becomes available. We are liaising closely with the UK Government on this issue and anticipate regulations coming into force in the second half of 2026.

In order to bring these reforms into place, we will shortly issue an additional technical consultation on proposed changes to EPC lodgement fees. This will set out the increases to the EPC lodgement fee which we think will be needed to meet the cost of developing and maintaining the new technical and operational infrastructure to underpin the revised regulations, and ensure a regulatory system of the highest quality.