The UK needs more focus on short-term energy efficiency measures which can cut the costs of energy-hungry heating systems, writes Andrew Parkin from the Property Energy Professionals Association (PEPA)
A lot has been said recently about the fact that EPCs do not currently recommend the installation of a heat pump. There is a very good reason for this. EPCs are designed to recommend to stakeholders the most cost-effective ways of improving energy efficiency in a building.
There are two factors to consider when it comes to any heating system and when to recommend a change:
1) The cost to install the system vs the payback period, and
2) The running costs vs the current heating system.
On the former, it is a reality that when it comes to replacement heating systems the cost of heat pumps mean that they simply cannot compete with oil and gas-powered boilers at this present moment in time; this equation will shift over time but in order to do so, the technology must improve, and installation costs must come down.
The second point is more complicated, and we must try to understand how the Energy Efficiency Rating (EER) on the EPC is achieved. The EER is the A-G rating at the top of the EPC and also scored out of 100. On an EPC for a domestic building, this rating is a combination of how the building’s walls, roof, floors, windows and doors, heating and hot water systems and any insulation impact on how energy efficient the building is. But crucially, it is also factored by the cost of the heating and hot water fuel. The cheaper the fuel, the better the rating. This happens because the government’s original focus for the EPC was to reduce fuel poverty. A very good goal indeed.
Now, we have been very lucky compared to our friends in Europe, in that mains gas has always been cheap in the UK. All things being equal, it has always been cheaper to heat an average property with a gas fired heating system than oil, LPG, or electricity, and as a result the EPC has always given a better rating to gas heated properties and recommended a gas heating system where mains gas is available.
Many people do not know that the recommendations on an EPC are added by the methodology (i.e. the system) rather than the Energy Assessor, and this has always been the case. In other words, there would need to be some sort of intervention to come up with different recommendations.
Whilst an assessor can remove recommendations (provided there is justification) they cannot add or change them for something else. This is controlled by the government approved document called Appendix T. This document dictates when a recommendation is possible/feasible, looks at how impactful and cost effective it is, and on that basis, promotes what should be installed in the property (in this case, a gas boiler or a heat pump, but not both). In order for the recommendations on an EPC to change, this Appendix T document must also change
People in the know will say that a good heat pump is four to five times more efficient than the best gas boiler, and they are very correct. But then the cost of electricity is still three to four times more expensive than gas (even today, during the middle of a gas price crisis). Do we really want to risk pushing people into fuel poverty in the pursuit of net zero? Is it worth the cost of the change when the heating system would need a complete overhaul to work correctly? And what of insulation and fabric first approaches? Surely these are the most important measures to focus on in the here and now. The cheapest fuel is always the fuel you don’t use! When is the right time to recommend a heat pump? When the cost of gas gets ever closer to the cost of electricity? Should we look at how long the owner is going to live in the property, or think about their lifestyle? Should we suppose that gas is going to continue to rise in cost faster than electricity (which is also getting more expensive due to gas price increases)?
It’s a tricky thing to recommend a heat pump over and above another option when there is so much to consider. It is far from black and white. And at present the EPC is charged with doing that exact thing. Perhaps the best way is for the EPC to show what a range of options look like and help guide the homeowner towards the right choice for them. This is exactly what government is wrestling with. And as hopefully the reader can appreciate, there are no correct answers in the here and now.
Whilst the hope is that over time heat pumps will become more cost competitive when compared with fossil fuel systems the Property Energy Professionals Association (PEPA) believes that, in the meantime, EPCs will have to be adapted to include heat pumps as an option whilst highlighting that their cost can be higher than alternatives, even when subsidised. Delivery of the EPC Action Plan means that this can happen in the coming months.
Then, perhaps, the focus can move to what is a bigger problem. There are around two million heating systems currently replaced each year in UK homes, with over 95 per cent of these being high efficiency gas condensing boilers. Delivery of the government’s (most would agree) stretch target of installing 600,000 heat pumps a year by 2028 would still mean that 1.4 million alternative heating systems need to be installed. The government’s target of replacing all new fossil fuel boiler installations with heat pumps by 2036 looks a long way off. It raises the question whether heat pumps are really the only long-term solution, and whether there are alternative and less costly heating systems that might prove more attractive and feasible – dare one mention hydrogen, and what about smart storage heaters?’
In the meanwhile, PEPA advocates that there should be much more focus in the short-term on measures which can improve the energy efficiency in buildings at an economic cost and thus reduce the dependency on energy hungry heating systems.
EPCs are very good at identifying options for building owners to implement relatively inexpensive measures such as installing insulation and better heating controls, and improved lighting solutions to improve energy efficiency and reduce costs and carbon emissions – surely the emphasis should be on these at a time when the cost of gas, electricity and oil is going through the roof.
Andrew Parkin is managing director of Stroma Certification and chairman of the Property Energy Professionals Association (PEPA).