What is an EPC? Energy Performance Certificates explained
What is an EPC?
An Energy Performance Certificates (EPC) is a summary of a standardised assessment of the energy efficiency and CO2 emissions of a property in the UK. Properties get a rating from A (best) to G (worst) and a score out of 100. The better the rating and score, the lower your energy bills are likely to be. Any building that is put on the market for sale or for rent in the UK must have an EPC, as do all newly constructed buildings.
Example EPC rating
What is in an Energy Performance Certificate?
As well as the letter rating and numerical score for energy efficiency, EPCs give a breakdown of the performance of individual elements of a property, including the building fabric (walls, roof, windows etc) and services (heating, lighting etc.), and suggestions on how to improve the energy efficiency of the property and get a better score.
Each EPC includes an estimate of the cost of energy bills for that property, but beware, the estimate is based on costs in the year that the EPC was created. As EPCs are valid for 10 years, those energy costs could be very out of date by the time you see them.
As well as the headline energy-efficiency rating, which is based on the estimated energy use of the property per square metre (as measured in kWh/m2/year), EPCs include an environmental impact section, which rates the property on carbon emissions per square metre. These two scores are closely related, especially when it comes to the building fabric, however they are not the same. The source of the energy used for heating and lighting can vary from building to building, with different fuels producing different amounts of carbon dioxide for every kilowatt hour (kWh) of energy used. The environmental impact rating is calculated by applying these 'carbon factors' for the fuels to the overall energy use.
What are the legal requirements for EPCs?
For newly constructed buildings it is the responsibility of the builder to provide an EPC to the person who commissioned the construction of the building, within five days of completion.
An EPC must be obtained before a building is marketed for sale or rent, and it is the responsibility of the selling owner or the landlord to make sure the EPC is made available to potential buyers or new tenants. You can't sell or rent a house without an EPC.
An EPC can only be produced by an accredited energy assessor who will visit the property to carry out an assessment.
Not having an EPC could lead to enforcement action and the issuing of a penalty charge notice of £200.
Non-exempt domestic properties must have a rating of E or better under the MEES regulations. Local authorities can fine a landlord up to £5000 per property for being in breach of the regulations.
Why are they important?
Because they are produced using a standardised procedure, EPCs allow prospective buyers and tenants to easily see and compare the energy efficiency of all properties they are considering, and factor their potential energy bills into their decision. They are a legally required for newly constructed buildings and all buildings put on the market for sale or rent.
EPC ratings are also the way in which buildings are assessed under the Domestic Minimum Energy Efficiency Standard (MEES) Regulations, which cover rented homes in the UK. Currently, a domestic rented property must have a rating of E or better. A landlord cannot let out a property rated F or G - they must improve it to an E or better, or show that they have done all they can within a budget of £3500.
There are some exceptions to this requirement - see 'exception and exemptions' below.
The minimum rating is likely to increase from an E today to a C at some point in the next few years. The government has consulted on improving the efficiency of privately rented homes to band C by 2028 and raising the maximum landlord spend from £3500 to £10,000 but have not made a final decision on changes to the regulations yet. Given that the average UK property is currently rated D, it is likely that a huge number of rental properties will have to be improved soon if their landlords want to continue to be able to let them out.
“Our preferred policy scenario is a single target of... band C, achieved using the “fabric first” principle. ”
Where can I find an existing EPC?
The easiest way to understand EPCs is to look up the EPC for your own home. For properties in England, Wales and Northern Ireland use GOV.UK's 'Find an energy certificate page' (Find an energy certificate - GOV.UK (www.gov.uk)). In Scotland the Energy Saving Trust provides an equivalent service (EPC - Search By Postcode (scottishepcregister.org.uk)).
How to get an EPC
The first step is to find an assessor. GOV.UK has a 'Find an assessor' page, which will list assessors in order of distance to the property, as well as their contact details and accreditation. Other sites such as The EPC Register (https://theepcregister.co.uk/) offer similar services with smaller databases (meaning you are less likely to find a very local assessor), but with additional information and customer reviews. Estate agents may also be able to recommend local assessors.
The assessor will visit the property to conduct a measured survey, and inspect the building fabric and services. They will be trying to understand the performance of the components - for example what is the likely construction of the walls and the level of insulation (often guessed based on the age of the building unless the owner can provide detailed information), how many energy efficient bulbs there are, whether windows are double or single glazed and so on.
The assessor will input the information into government-approved software that will perform the Standard Assessment Procedure (SAP) or Reduced data SAP (RdSAP), to calculate the estimated energy use and carbon emissions. For new-build properties with a lot of detailed information available SAP is the more appropriate method, while for older properties RdSAP will be better.
The assessor will lodge the data into the EPC register through their accreditation scheme, and then provide the seller or landlord with a copy of the EPC.
How much does an EPC cost?
The price of an EPC assessment can vary from around £50 to over £100, with some assessors charging higher prices for larger properties, reflecting the longer time it would take to survey. We recommend comparing quotes from a few local assessors.
Exceptions and exemptions - when is an EPC not required?
While an EPC is generally required for any home sold or rented in the UK, there are some exceptions. In the following circumstances an EPC is not legally required:
Listed buildings or buildings in a conservation area, where work to improve energy efficiency would unacceptably alter the character or appearance of the building.
Temporary buildings (with a planned life of less than two years)
Stand-alone buildings smaller than 50 sq m.
Residential buildings intended to be used less than four months of the year
Buildings that are about to be demolished
Furnished Holiday Lets (as defined by HMRC)
Evidence would be required to demonstrate that these exemptions apply.
There are also exceptions to the requirement for a rented property to be rated E or better:
A property that is not required to have an EPC is also not required to reach the minimum efficiency rating (see above).
If the owner has spent £3500 or more on improving energy efficiency they are not required to improve it further, even if they haven't reached an E rating yet ('All relevant improvements made' exemption')
Similarly, if even the cheapest improvement would cost more than £3500 owners can be exempted from the requirement ('high cost' exemption)
If the only improvement that can be made is to insulate the walls, and this would negatively impact the fabric or structure of the property ('wall insulation' exemption)
If the owner would need consent from a third party (such as a freeholder or planning department) and this can't be obtained ('third party consent' exemption).
If improving the property would devalue it by more than 5% ('property devaluation' exemption)
If a person became a landlord suddenly, under specific circumstances ('temporary exemption due to recently becoming landlord')
These exemptions also require evidence, and generally have a time limit - usually five years. After the time limit the owner will be required to try again to improve the property, or show that they can't.
What is the penalty for not having an EPC?
A seller or landlord can be fined £200 for failing to provide an EPC when a property is marketed, or failing to include the EPC in ads for the property.
The penalties for renting a property rated E or F are much larger. Landlords renting out a non-compliant property for more than three months can be fined up £4000 by the local authority. Providing false information in order to get an exemption is subject to a fine of £1000, and failing to comply with a compliance notice £2000.
Conclusion
EPCs are essential to marketing a property for sale or rent, and useful in understanding where a property sits in relation to the current minimum energy efficiency standards. With the minimum rating for rental properties likely to rise to C in the next few years, they are only going to become more important at time goes on.
Want to know more? Check out these other blog posts, or Preview Studio's energy efficiency services.