EPC Reforms Address Current Issues but May Create New Ones

Proposals for reforming dwelling Energy Performance Certificates (EPCs) could trigger changes to grant funding criteria and require revisions to ESG strategies.  Whilst providing a more comprehensive indicator of performance, the addition of three further performance metrics to the certificate could increase the difficulty in comparing the performance of homes.

The government’s consultation on EPC reform acknowledges the flaws of the current methodology, especially the effect that external factors such as grid decarbonisation and fuel prices have on the current A-G ratings criteria. The current methodology is exclusively an energy cost metric, driven strongly by the difference between p/kWh grid electricity and gas costs, with new homes utilising gas-based heating strategies typically achieving higher EPC ratings than those using heat pumps. This does not align with government decarbonisation objectives and is particularly problematic where EPC ratings act as a commercial driver on projects, such as applying for grant funding where a minimum rating is specified.

The new proposals, whilst retaining this current metric, will look to provide a more comprehensive summary by adding the following measures:

• Fabric performance – this will reflect Part L Fabric Energy Efficiency
• Heating system – this will rank different heating technologies based on efficiency and emissions
• Smart readiness – not yet defined, but intends to reflect how energy systems in the home could support users to better manage their energy use

Changes are planned to be introduced in the second half of 2026 for new EPCs. All existing EPCs will remain valid for their extant life. New homes under the incoming Future Homes Standard, because of the differences between SAP and the incoming Home Energy Model, will be covered by a different EPC methodology to be consulted on later in 2025. Additionally, heritage buildings will no longer be exempt from having EPCs.

The above proposed changes are not planned to be applied to non-residential buildings, with the current carbon measure remaining the single headline metric.