Put on the best performance

Energy efficiency is a hot topic. Terms like 'carbon neutral' and 'energy ratings' '“ once the preserve of industry bodies '“ are now entering common language. High-profile projects such as the Stern review have highlighted the urgent need to reduce our carbon dioxide emissions, and particular attention is currently focused on the housing industry, where there is significant room for improvement.

Energy efficiency in UK housing

The energy efficiency of the UK's housing stock could be vastly improved by a small number of low-cost, highly effective measures. Take for instance cavity wall insulation '“ it is one of the most cost-effective energy efficiency measures you can implement in the home. It can reduce heat loss through the wall by 60 per cent, and the cost of the insulation can pay back in less than two years. And yet, of the 15 million homes with cavity walls, a staggering 10 million or so still do not have any insulation in them. Loft insulation fares just as badly, with around 14 million homes being insufficiently insulated.

The underlying problem with the current situation is that we cannot begin to improve the energy efficiency of our housing stock until we can measure it - and most householders simply do not have access to information regarding the energy efficiency of their property. Plans to use a successful measure from another sector have been in place for several years.

The success of energy labels for consumer products such as fridges and washing machines is indisputable. In 1999 only 2 per cent of fridges and freezers being sold in the UK were A-rated. Fast-forward eight years and now more than two-thirds are A-rated. Providing information at the point of sale is imperative if you want to influence the buying decisions of the consumer.

Directive 2002/91/EC on the Energy Performance of Buildings (EPBD) expects to deliver exactly the same market transformation in the housing industry, by giving homes an A-G energy efficiency rating known as an Energy Performance Certificate (EPC). The average UK home will get a rating of E, and the average new home built to the 2006 Part L building regulations will get a high C or low B. To achieve an A rating, a new home would have to achieve a 60 per cent cut in carbon dioxide emissions over and above the current Part L requirements.

Decoupling the HIP and EPBD regulations

The EPBD was published in January 2003. The Directive has far-reaching implications for the owners, operators and developers of all buildings in Europe (both dwellings and non-dwellings) and will play a vital role in delivering a step change in buildings-related energy efficiency. Key provisions of the Directive include minimum requirements for the energy performance of all new buildings and large existing buildings subject to major renovation; energy certification of all buildings (with frequently-visited buildings providing public services being required to prominently display the EPC); and regular mandatory inspection of boilers and air conditioning systems.

The directive came into place on 4 January 2003. Member states, including the UK, had three years in which to implement the Directive '“ such as the provisions had to be transposed into UK Regulations by January 2006. A transition period applies until January 2009 for states without sufficient assessors qualified in January 2006 '“ this includes the UK.

The EPBD contains 17 'articles' which must be implemented. Its implementation is a devolved issue, with Communities and Local Government (CLG) only responsible for England and Wales.

Scotland and Northern Ireland are being implemented by their respective administrations.

For the marketed sales sector, the requirements of the EPBD have been aligned with the Home Information Pack (HIP) regulations (Statutory Instrument 1667). The HIP contains a range of required and optional documents, with the EPC being a required item on the first page. It is important to note that the EPC is governed by separate legislation (Statutory Instrument 1669) and ultimately its implementation will not be affected by any possible amendments to the HIP regulations.

The UK government's original timeline for implementation had mandatory HIPs and EPCs for all marketed properties beginning on 1 June 2007. However CLG made the decision on 22 May to undertake a delayed and phased implementation '“ beginning on 1 August, when all properties with four or more bedrooms will require a HIP. This altered implementation came about due to a Judicial Review by the Royal Institution of Chartered Surveyors (RICS) regarding the period of validity of EPCs, and a concern over the numbers of qualified and accredited energy assessors available to carry them out.

CLG announced on 11 June the criteria for implementation of HIPs for the marketed sales of dwellings with fewer than four bedrooms. When there are 2,000 qualified and accredited energy assessors, HIPs will be required for properties with three bedrooms, and when the number reaches 3,000 HIPs will be required for all other homes. This implementation is also dependent on the geographical spread of energy assessors to avoid local problems with commissioning an EPC for the pack. It is widely expected that enough assessors will be qualified and accredited for these scenarios to occur shortly after 1 August.

Following the May and June announcements, the date for EPCs on rental properties remains 1 October 2008, but the introduction of EPCs for new homes has been postponed until 1 January 2008 in order for all the necessary processes and systems to be in place.

Of course, energy labelling alone cannot solve our energy problems in housing '“ it has to be backed up with other market initiatives, such as fiscal incentives for home owners who do take action. These could include green mortgages, where lenders offer reduced mortgage rates to homeowners that carry out the recommendations of the EPC. Also in place in some areas are rebates on council tax or stamp duty. Ultimately, we need a supply chain that delivers energy efficiency improvements reliably and at low cost, but energy labelling is an important first step.

Who are the assessors?

EPCs can only be produced by home inspectors and domestic energy assessors who have gained a nationally-recognised qualification from an approved examining body. These assessors will have undergone a training course, passed an external exam and been subject to a series of checks to ensure they are 'fit and proper' persons. This process includes a Criminal Records Bureau check.

National Energy Services' DEA training course consists of eight days of training, supplemented by distance learning. Beginning with the overarching legislation, candidates go on to study the construction and thermal properties of dwellings, alongside energy efficiency. An important part of all candidates' training is an understanding of RDSAP '“ the methodology which the EPC is based on.

This includes learning the conventions, being able to correctly identify property elements, and entering the data in the software to produce the EPC. Candidates will also learn how to deal with non-standard properties, unusual features and renewable energy technologies. There is a strong focus on practical training, and candidates must demonstrate that they can successfully produce EPCs on test properties before they can pass.

Saving carbon and money '“ using the EPC

The EPC provides the homeowner with two ratings for the building, showing its energy efficiency and its environmental impact on an A'“G scale. The scale is based on the underlying rating system, called a SAP rating, which runs from 1 to100.

The environmental impact rating is a measure of a home's impact on the environment in terms of carbon emissions '“ the higher the rating, the less impact it has on the environment. The energy efficiency rating is a measure of a home's overall efficiency. The higher the rating, the more energy efficient the home is, and the lower the fuel bills are likely to be.

Energy performance measure

The EPC also contains recommended measures to improve the energy performance of the building. These recommendations could include low-cost measures with shorter payback periods, like loft insulation, as well as more ambitious energy saving measures to consider. Included on the A'“G scale are the potential ratings the building could achieve if all the cost-effective measures were installed.

The EPBD permits that the EPC should be allowed to be valid for up to 10 years, but member states may apply shorter periods. The UK government's regulations require EPCs for marketed sales to be no more than three months old, to fall in line with the HIP regulations.

Having a more up-to-date EPC will spur take-up of the energy efficiency measures contained within it, and the government has produced a regulatory impact assessment which demonstrates that the social cost in carbon emissions saved outweighs the cost of producing EPCs more frequently.

Following the RICS judicial review, the government has agreed an interim measure to allow EPCs up to 12 months old, with a full public consultation in the summer.

To dispel one particular myth, many of the recommendations generated by the EPC will be suitable for older properties '“ even those in conservation areas. While measures such as external cladding are inappropriate, simple internal measures can reap huge savings in carbon and energy bills.

Typical energy ratings

Take a typical 1930s semi with cavity walls and 75mm of loft insulation. The boiler is 15 years old with an open flue and the controls are solely a room thermostat. The hot water cylinder has no thermostat and a 12mm jacket. There are no low energy lights in the dwelling.

This fairly typical property would achieve an E rating on the A'“G scale (47 SAP points). The EPC suggests low cost recommendations of increasing loft insulation to 250mm, installing cavity wall insulation, increasing the hot water cylinder insulation to 160mm and fitting low energy lighting to all fixed outlets.

These four measures push the energy efficiency rating up to a D (62 SAP points) and would typically save the homeowner around £190 each year on their energy bills. Other options include installing a hot water cylinder thermostat, upgrading the heating controls and replacing the old boiler with a brand new condensing model. These measures push the house up to a high C rating

(76 SAP points) and would typically save the homeowner £353 each year '“ saving around 3.1 tonnes of carbon dioxide every year. In a generation, that's nearly 80 tonnes.

Even a Victorian (pre-1900) end terrace property with solid walls could achieve a large increase in its energy efficiency rating '“ from a low E (42 points) to a high D (66 points) '“ using the same measures.

Benefits to customers

EPCs and HIPs will begin their rollout in a matter of weeks. Industry is showing that there will be enough qualified and accredited assessors for both to be rolled out for all marketed sales shortly thereafter.

Despite the misinformation that exists, provided by organisations with vested interests in maintaining the status quo, EPCs will provide enormous benefits for consumers and the environment. Their implementation has been something of a bumpy road, but we will very shortly see the huge benefits and opportunities they provide.