As the UK Government announces "a new approach to net zero" the Scottish Government is preparing to publish its Heat in Buildings Bill and is currently consulting on the reform of Energy Performance Certificates (EPCs) in Scotland. The consultation is largely a technical one dealing with the metrics used to create an EPC but the end result of the consultation and a new form of EPC will matter to those involved in dealing with properties.
The consultation on reform of EPCs
A regular criticism of EPCs is that their metrics oversimplify energy efficiency considerations and do not adequately classify certain matters, such as a property's fabric efficiency, in their ratings.
This issue is prevalent with rural and older properties, whose features may not always fit into the parameters of the current metrics and may therefore receive an EPC rating that does not accurately capture the property's energy performance.
Given the wide acknowledgement of these and other issues, the Scottish Government is undertaking to reform EPCs and is consulting on matters such as the metrics to be used going forward and the scaling of some of those metrics.
The following set of headline metrics are proposed for the reformed domestic EPCs:
- Fabric Rating – the efficiency of the building fabric;
- Cost Rating – running cost per year; and
- Heating System Type – whether zero direct emissions or not, and the efficiency of the system.
It is also proposed to add the following metrics to reformed domestic EPCs:
- Emissions Rating – rating based on carbon dioxide equivalent emissions per square metre; and
- Energy Use Indicator – the total amount of energy used per year.
These are not intended to be used as headline metrics but to provide further useful information in relation to the property .
The consultation also asks about the scaling for the proposed new Fabric Rating metric, i.e. how to assign bands from A – G.
The linking of the cut-off for band C in the Fabric Rating to the cut-off for band C in the current EPC metrics is being considered to ensure consistency between the two but the consultation acknowledges that the two bands could be set independently of one another. If they were to be set independently, the consultation notes there would be no clear link between band C of the current and new metrics, which is the basis of policy commitments – presumably referencing the minimum energy standards mentioned below.
Why do new EPCs matter?
An EPC must be provided when a residential property is sold or let to a new tenant. EPCs are beginning to have more of an impact on the marketability of properties and will play a central role in the application of any minimum energy efficiency standards (MEES).
Currently, MEES do not apply to residential properties, whether rented or owned in Scotland. However, as part of the Scottish Government's 'Heat in Buildings Strategy: Achieving Net Zero Emissions in Scotland's Buildings', it was proposed that from 2025 all private rented sector properties require to reach a minimum standard equivalent to EPC rating C at the change of tenancy and all remaining properties in the private rented sector reach this standard by 2028. Minimum energy standards were also proposed for owner occupied homes and households in fuel poverty, which we discuss in our prior article. The timescales for such measures may change but all should become clearer when the Scottish Government publishes its draft legislation which is promised for later this year.
Where it is not technically feasible or cost-effective to achieve the equivalent to EPC rating C in a private rented sector property, the Scottish Government has proposed that a minimum level of fabric efficiency (meaning the effectiveness of a property at retaining heat) through improvements to the walls, roof, floor and windows, as recommended in the EPC, would apply instead. This may be of particular relevance to many rural and older properties, depending on their current condition and the costs and technical limitations of any improvements. More detailed guidance from the Scottish Government is required as to when such cases would apply, but this may not be forthcoming until after the results of the EPC consultation and the corresponding reforms have been finalised.
When will the new EPCs arrive?
Following the consultation, the Scottish Government intends to introduce revised Energy Performance of Buildings (Scotland) Regulations to the Scottish Parliament this winter, with reformed EPCs coming into force shortly afterward. The idea behind this timing is that the reformed EPCs, with updated metrics, would be in place in advance of wider Heat in Buildings regulations, which are planned for 2025.
That being said, there is some uncertainty regarding the launch date of the reformed EPCs, as the Scottish Government has also indicated that they will review the UK Government’s timeline for development of an updated Standard Assessment Procedures (SAP) 11, which is the methodology used to calculate the information displayed on domestic EPCs, which may provide a more appropriate point to introduce the reformed EPC. SAP 11 is currently planned to be launched in 2025.
With all this in mind, it remains to be seen how the results of this consultation, and any subsequent regulations, will impact the minimum EPC rating proposed to come into force from 2025.
The Energy Performance Certificate Reform Consultation is open to the public and closes on 10 October 2023.
We recently wrote a similar article in the bricks and mortar section of The Times
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