Getting building energy performance right is essential for net zero – part I

Buildings are the second largest contributor to UK emissions at just under 20% of the total. There are two elements to the energy performance of buildings: energy is used in the running of the building, primarily heating and lighting, and energy is used by the occupants for daily living such as cooking, refrigeration of food, laundry, dishwashing and so on.

I will explore both of these in a series of three blogs, this first one looking at the factors driving the energy use of buildings, and in particular the use of the Energy Performance Certificate. The second will look at issues surrounding measurement and the selection of energy efficiency measures, while the third will look at the energy use of building occupants. (Of course the issues of buildings and occupants cannot be entirely divorced in so far as occupants decide their preferred levels of heating, whether to turn lights off in empty rooms and so on, but there are fundamental properties of buildings which dictate their minimum energy consumption while occupied.)

In the recent energy white paper, the Government set out its plans for a new Future Homes Standard that will ensure that all new-build homes are “zero carbon ready”. New-build homes will be required to be fitted with low-carbon heating, and high levels of energy efficiency. These homes will have carbon emissions that are 75–80% lower than those built to current standards.

It is the second part of this aspiration, around the desire for higher energy efficiency, that is the focus of this post.

What is meant by “energy efficiency”?

This might seem like a trivial question, but it is important to be aware of the conflicting use of language around this subject. The Government wants homes to be “zero carbon ready”, but what does it mean by this? As noted above, building use energy in two ways: the basic in-use needs such as heating and lighting, and the additional requirements to support the normal daily lives of the occupants. There is in fact a third way which is the embodied emissions in the fabric of the building, its construction and its eventual demolition.

“Delivering our net zero target means largely eliminating emissions from domestic and commercial buildings by 2050,”
– Energy White Paper 2020

The white paper notes that the energy performance of many existing homes is inadequate, having an Energy Performance Certificate (“EPC”) rating of D or below. There is much discussion of making homes more energy efficient, and a rather dubious suggestion that various home improvement schemes currently available “could enable more than 600,000 homes in England to be more energy efficient, saving these households up to £600 year on their energy bills”.

The focus on EPC and energy bills is consistent – there is a common misconception that the rating measures energy efficiency, but in fact it is a fuel cost rating. This is confirmed in the methodology document: “The SAP rating is based on the energy costs associated with space heating, water heating, ventilation and lighting, less cost savings from energy generation technologies.”

The fuel choices for heating and the presence or otherwise of on-site renewable generation in particular solar panels contribute to the overall EPC score, but this approach is problematic in that building owners may not be in a position to choose the most cost-effective method of heating – if a property is not on the gas network then it will be unable to benefit from realtively cheap gas heating.

Combining the two drivers of cost: amount of consumption and type of fuel, creates some peverse incentives. Gas heating is cheaper than electric heating, so despite the fact that gas heating is significantly more carbon intensive, it is encouraged by the current EPC methodology. This is inconsistent with a key aspect of the Government’s net-zero ambitions: to move away from the use of traditional gas (methane) in heating towards lower carbon approaches, which are typically more expensive.

The situation is further confused by the fact that the SAP methodology dates back to 2012 when the carbon content of grid electricity was much higher than it is today.

Unless steps are taken to artificially increase the cost of gas, the EPC approach will suffer from these conflicting objectives. Removing the choice of fuel from the assessment would solve this problem: the EPC rating would measure the actual energy performance of buildings in net consumption terms, meaning that credit can still be given to onsite renweable generation which reduces net consumption, while the amount of energy needed to run the building is benchmarked. 

How is the EPC rating determined and is it a reliable guide to building energy performance?

Once an building is completed it is given an Energy Performance Certificate (“EPC”) with a rating from A-G where A is the most energy efficient. An EPC is valid for 10 years and a valid certificate is needed when a home is sold or rented out.

The use of EPC has been at the heart of the Government’s drive to improve the energy efficiency of the nation’s buildings with minimum standards being set. But if these standards are to be useful and achieve the desired they must accurately determine what they are intended to determine.

The ratings are established by inspectors who assess various aspects of the building, awarding points in accordance with the Standard Energy Procedure, a methodology set by the Government to show that a building complies with the energy and carbon requirements defined by current building regulations. The certificate indicates the current rating and the potential for improvement. The inspections are non-invasive and take around an hour, meaning that most of the calculation inputs are based on theoretical rather than measured values.

The SAP points are based on:

• Construction materials
• Heating systems (and how efficient they are)
• Any solar gains found through openings in the property
• The level of thermal insulation
• Any renewable energy technologies
• The fuel you use for water and space heating, light and ventilation
• Air leakage

The certificates contain the following statement, which highlights the main deficiency of the system:

“This assessment does not take into consideration the physical condition of any element. “Assumed” means that the insulation could not be inspected and an assumption has been made in the methodology based on age and type of construction.”

The Centre for Research into Energy Demand Solutions (“CREDS”) has estimated the error in EPC reliability to be equivalent to 10 EPC points on average:

“This work compared values from the national data base of all registered EPCs for properties that have had more than one EPC. [The chart] shows how, for 1.6 million dwellings that have had two EPC assessments, the EPC ratings are likely to decrease as well as increase. For example, thirty percent of C rated buildings were issued a D rating for their second assessment.

Normally one would expect a later EPC to improve – not get worse – suggesting that there is considerable random error in the EPC rating system. Perhaps most worrying is the fact that over half of highly energy efficient buildings (A or B rated) get a worse rating the second time around. It appears that most assessors cannot identify highly energy efficient properties which is exactly what the EPC rating is supposed to encourage. Instead we suspect they default to using U-values associated with the age of construction,”
– CREDS

Ratings that fall with the age of the building are a matter of concern, since it means that any premium paid by the home owner as a result of the high rating would not be recovered on its subsequent sale. The report cites the Beddington Zero Energy Development, one of the UK’s first zero carbon developments. The SAP/EPC design energy use was 75kWh/m², with a measured energy use of 125kWh/m².

However, when the properties were sold, the mean EPC energy rating was 175 kWh/m², and while the properties were expected to get an A or B rating, 30 of the 43 were given a C rating or worse. 33 of 43 assessors failed to even notice the triple glazing, and 41 out of 43 assessors had rated the U-value of the wall as 0.3 to 0.6 W/m²K when it was in fact 0.1 W/m²K, despite 300 mm wall insulation which would have made the walls very thick (assessors are supposed to measure wall thickness)! 9 out of 43 assessors rated the roof insulation at 0.31 to 0.5 W/m²K when the design heat loss was a third of this at 0.1 W/m²K.

A case study highlights important deficiencies in the EPC approach

This case study exposes some surprising and some less surprising shortcomings of the EPC process. Notably the replacement of some 60% of the gas heating with electric heating caused the rating for the subject house to drop from D to F despite the building being renovated and new floor insulation added (which was ignored by the assessor as it could not be visually inspected). Very little credit was given to the improvements made to the property because condition is not taken into account – according to the assessor, there could be large gaps around the windows and panes missing, and the rating would be unaffected.

The SAP methodology dates back to 2012 when the electricity generation mix was very different and much more carbon intensive. While the cost of electric heating is higher than for gas, the emissions now are lower: with gas heating, 100% if the emissions are due to gas, but for electric heating, the contribution from gas is now only around 35% annually, with zero carbon contribution from nuclear and renewables which together account for 55% of the generation mix. Ironically, while the Government wishes to see the use of low carbon heating as an alternative to gas, the expense of electric heating is so high that the replacement of electric systems with new gas central heating is being subsidised.

Another finding from the case study is that some of the recommendations for improvements within the EPC assessment were unrealistic or inappropriate. In this case, two of the recommendations (installation of a wind turbine, and addition of external wall insulation) would require planning permission, and, since the house is located in a national park and conservation area, the permission would be unlikely to be granted.

The assessor said this is common, particularly with rural properties, and even listed buildings where the installation of exterior cladding without permission – which is unlikely to be granted – is a criminal offence. Wall insulation and claddding can create other issues such as condensation in buildings that were built with a process that anticipated a degree of breathability and flexibility in the construction. The assessor is not alone in these concerns.

“Also, much like the installation of double glazing on older housing stock, retrospective insulation can have a negative impact on a building in terms of water ingress [damp] and cold bridging [condensation]. Are homeowners going to be financially assisted to remedy any effects of modifications should they arise, particularly those considered the poorest households?”
– Dr Chris Roberts, assistant lecturer at Birmingham City University’s School of the Built Environment

Another problem with the recommendations is that they may not be cost effective. The capital cost of some recommendations is so high it would take decades to recover through any reduction in energy bills.

And even if the work is undertaken there is no guarantee it will improve the EPC rating since the ratings are based on the assumed construction methods – unless an assessor can visually inspect improvements such as floor or wall insulation, it will be assumed not to be present if it is not typical in properties of that age. Documentary proof might be acceptable but this must be inspected during the visit, which is generally not made clear ahead of time. Indeed the recommendations make no reference to the need to produce acceptable proof of works or allow for visual inspection in order for the improvements to be included in the EPC rating.

This means that building owners could spend thousands of pounds on improving the energy performance of their buildings without any correspoding improvement in the EPC rating, and requiring decades of use to recover the capital cost through reduced energy bills.

Making the EPC fit for purpose

Although more examples should be examined before full recommendations could be made, this case study highlights some significant issues with the process with some clear means for improvement:

• Take the condition of buildings into account so that improvements to the condition which reduce energy use are credited;
• Carry out an air-pressurisation test, thermal imaging survey and thermometric analyses on buildings to identify the actual thermal properties of the structure and identify areas of heat loss (while façade U-values cannot be measured directly, they can be derived from thermal imaging and thermometric testing which involves measuring internal and external air and surface temperatures);
• Re-calibrate the calculation methodology so electric heating is not penalised in order to align with de-carbonisation targets;
• Ensure recommendations are realistic and cost-effective, and that they make clear what evidence must be obtained in order for the work to be recognised in future EPC assessments to avoid undermining public confidence.

If the Government is serious about improving the energy performance of buildings it is essential that the key measurement used is appropriate and works as intended. The current focus on cost gets this only half right because it pits a lower cost/higher carbon technology against higher cost/lower carbon technologies.

Making the EPC technology neutral in the base case and focusing on the amount of consumption would avoid this conflict, because the first focus should be on reducing consumption and the second to ensure the remainig consumption is met through lower carbon means. One of the biggest ways of impacting consumption is to make sure that the condition of buildings is sound, so condition must be part of the scoring before new structural improvements such as the addition of wall insulation are considered.

Off-grid solutions such as solar-panels and wind turbines could add points on the basis that they reduce the external costs of energy, but the reports should make clear the length of the payback period, and exclude investments that do not generate positive returns within a reasonable timeframe. Most people would probably expect to see returns within 10 years and possibly less, so the 37 year payback period for the wind turbines in the case study which are unlikely to appeal to the great majority of consumers should be excluded.

If the EPC methodology is not reformed it will be impossible for the Governments targets of getting all homes to EPC C while at the same time moving away from gas heating to be achieved, and real improvements in the energy performance of buildings will not be realised.

The is currently no obligation for building energy performance to be measured at any stage in its life. This means that poor design, faulty installation or consumer errors are not identified or corrected, and there is no mechanism for the deign of buildings to be improved. Embodied emissions are also often overlooked: if buildings are to become genuinely sustainable, lifecyle emissions analyses are vital.

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Consumer decision-making has a major impact on building energy performance. The way we heat our homes, the appliances we use, and the timing of consumption all contribute to the energy use of buildings. Some of this is discretionary, but even climate-conscious consumers often fail to make sustainable choices, since they find it hard to accurately visualise the energy each activity requires.

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