A note on Energy Performance Certificate (EPC) consultation

Recently, the Department for Energy Security and Net Zero (DESNEZ) and the Ministry of Housing, Communities and Local Government (MHCLG) published a consultation on reforms to the energy performance of buildings regime, focusing on EPC reforms, the consultation¹ that the industry had been anticipating for some time. The proposed changes are expected to be introduced in the second half of 2026.

Is EPC the best metric for a building’s efficiency?

Currently, EPCs use the Energy Efficiency Rating (EER) for homes (based on energy costs per square meter) and the Environmental Impact Rating (EIR) for non-domestic buildings (based on carbon emissions).

But does an EPC really show how energy-efficient a building is? The short answer is NO.

Limitations of existing methodology

Using standardised internal conditions, predefined building operating hours, and reporting solely on regulated consumption, along with the simplified method to estimate energy consumption, led to unrealistic predictions of actual operational energy consumption. This issue is further exacerbated by the fact that EPCs are currently calculated based on energy costs or carbon emissions. Considering the rapid fluctuations in energy prices, the reported costs often become outdated within the typical 10-year EPC lifespan. Additionally, using carbon emissions as an indicator is increasingly unreliable due to grid decarbonisation.

Why EPCs are important?

Although it is well established that EPCs are not a good indicator of energy efficiency and despite their limitations, they have been widely used by policy makers to define building related policy targets and incentives. It is estimated that in the domestic building sector alone, at least 15 policies are affected by EPC rating.²

What is new in the published consultation?

The latest consultation shows the government’s intent to enhance EPCs clarity, practicality, and alignment with net zero objectives. The proposed changes aim to make EPCs more informative and actionable, moving beyond the current EER and EIR by introducing multiple complementary metrics as follows:

• Carbon emissions – estimates the operational carbon emission of the property.
• Energy use – tracks expected regulated energy consumption.
• Fabric performance – assesses insulation and thermal efficiency.
• Heating system – evaluates heating efficiency and environmental impact.
• Smart readiness – indicates a building’s ability to integrate energy-saving technologies.
• Energy cost – provides an estimate of predicted energy expenses.

Additionally, the new consultation proposes reducing the validity period of EPCs as well as expanding the categories of buildings that require an EPC.

Currently, an EPC is valid for ten years and is only required when a rental property is re-let. The consultation proposes shortening this period and mandating a valid EPC throughout tenancy periods to ensure up-to-date energy information.

At present, EPCs are required only when an entire property is rented. The proposal suggests extending this requirement to include individual rooms within a property.

Currently, heritage buildings are exempt from EPCs if energy upgrades would alter their character. The proposal seeks to make EPCs mandatory for all heritage properties while allowing exemptions from minimum energy efficiency standards where improvements are impractical.

Pros and cons of the new consultation

The latest consultation introduces several positive steps to enhance the quality and accuracy of the existing methodology. However, some fundamental limitations remain unaddressed. The following section outlines the key advantages and drawbacks of the proposed changes.

1. Additional metrics

The consultation introduces new metrics to provide a more comprehensive understanding of building performance. A notable addition is the heating system metric, which ranks different heating technologies. While this is a promising step towards decarbonisation, there are concerns about its implementation.

One key issue is the lack of transparency in determining efficiency rankings. Given the rapid evolution of heating technologies, the most efficient options may change frequently. Additionally, system size and other factors can influence performance.

Moreover, prioritising efficient heating systems without first addressing overall energy demand could have unintended consequences. In retrofit projects, where buildings often have inefficient fabric, this approach may lead to fuel poverty and thermal discomfort for occupants. While these changes represent progress, a holistic approach that considers both efficiency and demand reduction is essential to avoid negative impacts, particularly for vulnerable households.

2. Use of actual metered data

The government is exploring ways to assess home thermal performance using smart meter data to identify factors contributing to the performance gap. While this positive step could improve the current EPC methodology, the implementation details remain unclear. Additionally, this change is unlikely to be introduced in the 2026 revision.

4. Improving EPC quality and assessor training

Variations in EPC ratings often result from assessor errors and inadequate training. The consultation proposes giving accreditation schemes more control over training, strengthening CPD requirements, and introducing specialisations (eg for heritage buildings) to improve assessment accuracy.

5. EPC for existing buildings

Currently, EPC ratings for existing buildings are based on high-level surveys and assumptions, leading to inconsistencies across the sector. The proposal suggests reusing validated data from previous EPC assessments to reduce costs and improve efficiency. However, this approach could compromise accuracy if incorrect assumptions from earlier assessments are carried forward.

With over 30 million buildings in the UK requiring accurate EPC ratings³, greater effort is needed to ensure assessments are reliable and reflective of actual building performance.

6. Methodology limitations

Many limitations of EPCs come from issues with their underlying methodology, which this consultation does not fully address. While some improvements have been proposed, EPCs will still not be a reliable indicator of actual building performance.

Suggestions for further improvement

To address the remaining shortcomings, the following recommendations should be considered:

• Prioritise fuel poverty reduction: The electrification of heat is a crucial step toward decarbonisation. However, due to the significantly higher cost of electricity, reforms that do not prioritise demand reduction will increase the risk of fuel poverty.
• Support skilled labour and decision-making: Given the shortage of skilled labour to implement the UK’s heating decarbonisation plan, EPCs should assist design teams in making more accurate decisions. A checklist with impact-weighted methods for key efficiency factors could complement EPCs and improve decision-making.
• Utilise EPC data for decarbonisation strategies: With over 30 million buildings in need of decarbonisation plans, EPCs should be used to collect relevant data. This information can then be used to categorise building types and develop tailored decarbonisation strategies for each category.
• Enhance public awareness and education: EPCs are widely recognised by the public, presenting an opportunity for energy efficiency education. By integrating live and historical metered data, EPCs could influence occupant behaviour and encourage energy-saving practices.
• Incorporate operational energy data: To ensure a comprehensive understanding of energy performance, operational energy data should be included in the consultation. This is essential for assessing actual energy use and identifying areas for improvement. It is recommended that a clearer methodology for implementing smart meters be developed, considering user behaviour.
• Implement the energy hierarchy: Energy efficiency measures should be prioritised before introducing clean energy sources and offsetting remaining emissions. Applying this hierarchy to all buildings, especially the ones that need to go through decarbonisation would help optimise energy use.
• Improve control strategies for non-domestic buildings: A detailed assessment of building automation and control systems should be conducted to evaluate their impact on energy performance in non-domestic buildings.
• Measure peak demand for smart readiness: Both notional and design proposals should measure peak energy demand. This would help assess a building’s smart readiness and enable better energy management.
• Develop a clearer smart meter strategy: The rollout of smart meters should consider user behaviour and follow a phased approach that includes planning, vendor selection, and integration with existing systems.
• Mandate more frequent EPC renewals: EPCs should be renewed every three years to ensure compliance with updated building regulations and reflect improvements in energy efficiency.

Final note

While the consultation introduces several positive changes, significant methodological limitations remain unaddressed. To improve EPC accuracy, reduce fuel poverty, and enhance the effectiveness of energy policies, a more holistic approach — including the recommendations above — should be considered.