Stephen O’Hara, chairman of The Property Energy Professionals Association, responds to a previous article about EPCs, and proposes to government that the validity period should be reduced from ten to two years to improve accuracy
Following the piece written by Paul Ellis, chief executive of Ecology Building Society, in the February edition of the Mortgage Finance Gazette, with regard to the accuracy of Energy Performance Certificates (EPCs), The Property Energy Professionals Association (PEPA) would like to respond on behalf of the industry.
Since EPCs were launched back in 2007, we have seen their evolution from a simple guidance document to an integral part of many government initiatives such as the Renewable Heat Incentive (RHI), Feed-in Tariffs (FiT), the Energy Companies Obligation (ECO), Green Deal and the Minimum Energy Efficiency Standard (MEES) for private sector rental properties.
Throughout this transition period, the EPC has undergone many technical changes to ensure its accuracy, from changes to the background calculations and methodology, allowing fuller and more accurate data input, to adapting the format of the EPCs presentation to make it clearer and more user friendly.
More significantly still, the rules surrounding the operation and monitoring of EPC assessors have been refined and strengthened by industry over the past decade, with the introduction of conventions that are regularly updated and reviewed to ensure that all assessors are producing EPCs consistently.
There are also Scheme Operating Requirements (SORs) to ensure that accreditation schemes and assessors are applying the rules correctly.
Schemes themselves are audited by government annually to assure they are applying their procedures (SORs) correctly and operating within the framework set by government.
Over the past two years, the quality of the EPC has continued to improve significantly with the introduction of smart auditing which utilises a risk-based approach that is designed to identify EPCs with potentially erroneous data entry, rather than solely using randomly selected samples.
However, we do agree that there is always room for further improvement for the process surrounding the EPC. For example, the purpose for which the EPC is produced could be used to target auditing of EPCs being used for Green Mortgages. We strongly believe that if the EPC is to be considered a true and accurate reflection of a property, then EPCs should be kept up to date.
PEPA and the individual Energy Assessor Schemes responded at length to the government consultation on the future of EPCs, and we eagerly await the government’s response.
Principally, PEPA proposes reducing the validity period from ten to two years which would ensure that changes to the software calculation that are influenced by building regulations or methodology changes, fuel prices, carbon emission and new technology are reflected in updated EPCs.
Introducing further trigger points for EPCs is another excellent way of ensuring that EPCs are up to date and reflective of the current state of the property.
We also explored how to develop the methodologies, to improve the accuracy but also the repeatability of the EPC, as well as how to make the EPC a more informative, relevant and effective tool for homeowners and potential buyers.
Engaging with consumers
Considering that EPCs have a firmly established role in the property market, we believe that this latest evolution in usage should provide a platform to engage with consumers to establish a deeper understanding of the EPC and its potential monetary and environmental benefits.
If the EPC could be marketed effectively by all stakeholders, including government and professional institutions like banks, lenders, agents, surveyors etc this would certainly help the consumer understand and harness the power of the EPC as a tool to help achieve monetary savings and reduce their impact on the environment.
The concept of introducing EPC images on mortgage statements is a very good one as it provides a subconscious link between the cost of purchase and the operating costs. This may stimulate positive engagement towards investment in energy saving measures, helping the occupier visualise the money that they could save.
Finally, in response to Paul Ellis’s article in Mortgage Finance Gazette, PEPA would welcome engagement with all interested parties surrounding this topic – you have the absolute support of the energy assessment industry.