Government urged to level the playing field on EPCs for off-grid homes

• Flawed EPC methodology means two homes built to same standards can have different EPC ratings, depending on whether they are on or off grid
• LGUK calls on Government to remove cost element from EPC methodology
• Current rules could force homeowners into spending thousands more on home improvements than they need to

Liquid Gas UK (LGUK), the trade association for the LPG industry in the UK, today calls on the Government to revise the methodology for Energy Performance Certificates (EPCs) which currently encourages off the gas grid property owners to choose higher carbon heating solutions, such as heating oil, over more energy efficient options, such as LPG or Heat Pumps.

LGUK is calling for the UK Government to address this when it publishes an EPC Action Plan later this year, and more importantly for homeowners, ahead of the Government publishing a strategy setting out how energy efficiency in owner occupied homes can be enhanced.

LGUK is worried that the UK Government’s strategy could seek to follow the Scottish Government[1] in enforcing a minimum EPC standard to buy or sell a home. If so, off-grid rural homeowners risk paying more and making choices that are less sustainable.

While positioned as a measure of energy efficiency, the current methodology used for EPCs is, in reality, actually a measure of energy cost per m2 through the inclusion and weighting of fuel costs. By applying this methodology, the EPC rating for homes is distorted when comparing various fuel types, especially when all alternative heating options are more expensive than natural gas. As a result of this, an identical property, built to the exact same standards, will receive a much lower EPC rating if it is situated off the gas grid.

George Webb, Chief Executive, Liquid Gas UK commented: “If the Government is serious about hitting net-zero it is important that it looks at the challenge as a whole, and not solely focus on the energy that the UK consumes. Fixing the EPC methodology and levelling the playing field is a quick win. Removing the cost element from the methodology will help off-grid homeowners and landlords achieve a more accurate EPC rating, guiding them to make the right decisions when looking to improve the energy efficiency of their homes.

“No other European country includes input fuel costs as part of their methodology. By simply removing the input fuel cost, we can encourage off-grid homeowners to move away from heating oil in favour of fuels and technologies that are cleaner, such as LPG and bioLPG which sets them up for a hassle-free transition to Net Zero.”

EPC ratings comparison for off-grid home when changing the fuel type and heating system. (Typical off-grid property features: sandstone/limestone as built with no insulation, pitched roof, full secondary glazing, boiler and radiator, heating controls, programmer, thermostat and TVRs. Low energy lighting.)

• Main gas boiler 60 (D)
• LPG boiler 28 (F)
• Oil boiler 47 (E)
• Electric boiler 18 (G)
• Electric high retention storage heater 42 (E)

As a result of this long-standing issue, there are four unintended consequences. Firstly, off-grid homeowners have to spend more money on building improvements to reach the same EPC rating as those on the grid. Secondly, in order to gain a higher EPC rating, homeowners are incentivised to switch to or stay on higher carbon, cheaper fuels such as oil in order to meet the Minimum Energy Efficiency Standard (MEES). Thirdly, the rules also make the likelihood of a home reaching EPC Band C and above extortionate and in some cases impossible.

Finally, there is the potential impact to the off-grid rental market by increasing the rent for families in order to cover the costs for undertaking home efficiency improvements in order to achieve a Band C rating. 

Analysis of ONS EPC data for existing dwellings in 2019 shows that 36% of properties in England and Wales had a C rating (Government target), followed by 43% D, 14% E, and 3% F[2]. When compared to local authorities that are in rural areas and where off-grid homes are more prevalent, there is a notable increase in the number of properties that have an EPC rating of below D, the UK average.                                

Webb continued: “As our analysis shows, in the rural areas of the UK where we see more properties off the gas grid, you are much more likely to have a lower EPC rating than those living in the towns and cities around the country. While some of this is due to the older nature and fabric of rural homes, it is exacerbated by the disproportionate focus on input fuel cost.

“EPC Band C is currently being proposed as a minimum threshold for homes to be bought or sold in Scotland in under four years. We are opposing this in Scotland, unless the methodology is fixed. We will do the same if similar plans are proposed for the rest of the UK. If it was to be applied in England and also Wales, then in these rural areas, we will see comparatively higher numbers of homeowners pushed into spending thousands extra on energy efficiency improvements than they need to, or forced into paying for measures which are less environmentally sustainable. This is a tough predicament to be faced with and must be addressed by Government in its forthcoming EPC Action Plan.

“It’s a simple solution for UK Government, remove the input fuel cost from the EPC methodology, as they do in other European countries, to provide an accurate energy efficiency rating and help rural homeowners fairly achieve a C rating.”

[1] ‘Improving energy efficiency in owner occupied homes’, a Scottish Government consultation, published 19 December 2019, closed 9 April 2020.

[2] ONS data. Figures used rounded up to nearest whole number: https://www.gov.uk/government/statistical-data-sets/live-tables-on-energy-performance-of-buildings-certificates#history