Retrofit decisions: the role of EPCs & Green Deal Assessments

When looking to choose the right option from many available, whatever the setting, it’s a good approach to look at the extremities of choice and work in towards your favoured position. Some choices are easier to make than others of course; a new toaster – 2 or 4 slots, colour, energy rating, price. I personally tend to reach for my copy of Which? magazine and my decision is made. Thorough testing, consistent comparison methodology, decent explanation. Our homes don’t quite work like that though do they? Metering a toaster shows you the electrical consumption of the toaster. Metering the house just tells you your total consumption drawn from many sources, the pie chart below gives a feel for the average home below:

The make up of a typical UK home's energy consumption

The make up of a typical UK home’s energy consumption

Therefore, when choosing the most appropriate set of tactics to improve the energy efficiency, comfort and occupant health for a dwelling, its not straightforward even though we can really just focus on heat and heat loss as the big ticket problem.

If you ask a householder to operate a toaster, they nail it pretty quickly. Similarly, there is a widely held understanding that driving a car at around 55mph achieves good fuel consumption. This varies with the car’s available power and the weight you’re pulling. Ask a householder to “drive” their house, the majority have no idea how to do that optimally. We certainly don’t know what the “miles per gallon” ought to look like. To dwell on the driving analogy a little, the ‘engine’ is ostensibly the boiler (or heat source) with a supporting cast of the obvious lightbulbs, appliances, and less obvious humans and animals that give off heat.
An engine’s consumption will be reduced if it can easily transfer its power to the wheels, in our case we are dependent on the fabric of the building to retain the heat, the internal temperature the occupants find comfortable, how cold it is outside and how many appliances and lightbulbs give off heat to reduce the boiler work rate. Fuel consumption of a car rises exponentially beyond 50(ish) mph. And so it goes with houses. So lifestyle has a massive role to play.

Translating all of those interdependent household and personal parameters into a coherent retrofit strategy is a necessary requirement if we are to hit our tough national energy saving targets. Even by looking at the discussion of basic principles above, one can see how easy it is to make incorrect decisions. So what is available to support our decision making in the UK? The Government-led approach is the Energy Performance Certificate (EPC) a benchmarking tool which provides a baseline assessment that assumes a certain lifestyle for all homes. Building on this is the Green Deal Assessment Report (GDAR) which adds an Occupancy Assessment (OA) to the EPC.

DECC recently issued a Mystery Shopper Research paper to assess the impact of these two approaches. The basic premise of research was to carry out at least four different assessments on individual houses. Here follow some key extracts from that report.

“There was a lack of consistency in the data, results and advice generated by different assessors for the same property. There was significant variation in the EPC and OA results produced by the different assessments conducted at individual properties. The range of EPC ratings spanned at least two EPC bands for almost two thirds of the dwellings analysed”.
“The analysis found many differences in the values recorded for key input variables at the same property. Input variation was observed with EPCs, particularly for total floor area and the energy efficiency rating of building fabric and technologies. The variation in the inputs to the EPC process contributed to the EPC rating varying by, on average, 11 points in each dwelling. The variation in the EPCs was carried across to the OA where it was augmented by further input variation, particularly with respect to the definition of internal temperature and heating schedule.”

So the information collected contains errors and therefore the outputs are affected. How significant are the errors? Based on one of our recent stock assessments for a local authority of 67,000 dwellings, 11 points equates to around £250 for better performing homes, but around £500 for the very poor performing homes. 11 points is the average – some properties had a range of 35 points. This is the equivalent of inputting the wrong heating system or fuel. How would these cost difference affect payback of investment? Whilst ‘payback’ is a very crude measure, finance requires it in a world devoid of grants. A £500 discrepancy in either the baseline or the recommended savings could double or halve the payback period. There is inherent risk here for the householder and the financier.

But there is more. Householders largely don’t know they need this information. They appreciate that their bills are going up and would like to do something about it, but on the whole they are introduced to an EPC by default on the sale of a dwelling or if they hear of a grant scheme that requires it as an entry point. So the EPC and GDAR have a crucial role to play in not only a survey and some maths, but as a strong introduction to a journey that, if done properly, is unlikely to be an instant fix but carried out over time with not an inconsiderable amount of hassle involved. It needs to be good and slick. It would be easy to boot into the survey process and the maths that generates a report, but in the right hands, with an educated and experienced energy professional, only then can the generic outputs be translated into appropriate advice. If you look at the detail in the Mystery Shopper report, most assessors are spending a good amount of time on site and are asking the right questions. One massive issue is the journey. The follow up to a GDAR, according to the research, is appalling. Documents were received within the required 5 days in only half of all cases. Quotations for work received in only 32% of cases within 5 days. This is a huge missed opportunity to inspire confidence, to excite the homeowner and to show the way forward.

So therefore it is worth thinking about whether those 2.5% of householders annually renovating have thought thoroughly about energy efficiency in their design? This is the time it will be cheapest to take on that work. They have accepted hassle into their lives. So this is the time that an assessment of some kind is really crucial – but there is no regulatory requirement which is a big missed opportunity. (We can revisit Consequential Improvements another time)

To draw all of this into a conclusion would be to say that EPCs and GDARs are applied at times when people least want to look at them, and there is a strong chance that they are inaccurate. This market for energy advice is broken. Hardly anyone wishes to offer the customer what they really need – and the problem is that the customer doesn’t really know that they need it. Industry sells on the basis of what the customer has asked for as this is the easiest sell. Moreover, it is a race to bottom with regard to prices. Less money, less time, less accuracy. Given that we need to turn the advice market into a service that is desired by homeowners, we need a parallel market to the regulated arena. That’s certainly where we are with our Home Energy Masterplan. It is a snapshot in time but one that offers a long term view of the renovation with a route to either bite sized chunks or a whole house refurbishment. We would want to see a market for retrofit advice rather than energy advice, which seems pedantic, but it is different. It is the crossover between energy and building. There are a few rare individuals and organisations that exist in this space. We do, and we work hard to ensure that householders know the difference.