Performance review

Why energy performance certificates?

Intended as consumer information, energy performance certificates (EPCs) are required as a result of the Energy Performance of Buildings Directive 2002/91/EC (EPBD). The implementation of the EPBD is devolved to the Scottish Government, whose Building Standards Division oversees implementation at national level, and local authorities, who are responsible for enforcement on the ground.

The EPBD covers new and existing buildings as a whole, as well as the efficiency of air-conditioning systems and boilers. This article addresses only the requirement for EPCs for buildings as a whole.

Essentially EPCs are required for new buildings, on sale or lease of existing buildings, and for certain public buildings.

An EPC is calculated using one of three methodologies:

Standard Assessment Procedure (SAP) for new dwellings;

reduced data SAP (rdSAP) for existing dwellings;

Simplified Building Energy Model (SBEM) for non-domestic buildings.

Every EPC is linked to a specific individual, who must be either a recognised energy assessor responsible for directly entering or supervising the entry of data into an approved software program, or a local authority verifier who has checked all the input data.

What are the sanctions?

In the event that a building owner fails to provide an EPC when requested by the local authority, they can be subject to a penalty charge of £500 for dwellings or buildings that are ancillary to dwellings, or £1,000 in any other case. Paying the penalty does not relieve the building owner from the duty of providing an EPC, and the 2008 Regulations provide for measures including repeat penalties and enforcement action.

What problems can be anticipated?

Calculation

Whilst this article does not focus particularly on the methods of calculating EPCs, it must be recognised that neither SAP nor SBEM is a simple calculation to complete. The number of inputs to a SAP calculation is approximately 100, each of which can require separate calculation; it typically takes 1-2 hours.

The inputs to SBEM can run into the 10,000s, and for a building such as a primary school can easily take 3-4 days to calculate using approved software.

Experience shows that both calculations are prone to human error.

By contrast, rdSAP relies on the energy assessor having a good understanding of the different types of domestic construction and heating systems etc, and spending sufficient time on site to assess alterations and additions (such as improved insulation etc) that have been completed since construction.

Confusion

The first and foremost problem is a lack of information available regarding EPCs in Scotland. The majority of organisations are focused on England & Wales as the major market place, and we are already seeing companies offering energy assessor training that is not appropriate to Scotland and energy assessors themselves who are not recognised in Scotland offering to complete EPCs.

Within Scotland there is the potential for confusion between energy assessors who are a member of a protocol organisation and can only produce an EPC for an existing building, and certifiers of design and local authority verifiers who produce or check EPCs for new buildings.

Legislation

The way in which Scotland has chosen to introduce EPCs is different to the rest of the UK.

For example, elsewhere in the UK, SAP and SBEM calculations for new buildings can only be produced by members of a scheme licensed by the Department of Communities and Local Government (CLG). These are much more akin to the certifier of design schemes in Scotland, which includes the rigorous auditing of QA procedures of both certifiers and scheme providers.

The potential weakness of the Scottish situation is that until certification of design becomes the norm, local authorities will be responsible for checking all new build calculations, an onerous task for which no new funding has been provided by central government.

The Building Standards Division of the Scottish Government has chosen to adopt a light touch with the protocol organisations, leaving to them to decide who to approve as an energy assessor and how to regulate them.

Experience down south, where CLG audits the equivalent schemes much more closely, suggests that there are already worrying signs of sharp practice and poor performance on the part of energy assessors, many of whom are career changers rather than construction professionals.

We have to remember that the basic principle of the EPBD is to provide consumer information and is aimed at fostering the sort of fundamental shift in purchasing decisions that has been seen in the white goods industry, where energy labelling has seen a dramatic improvement in product performance driven by customer preferences.

Whilst the property market is much more sluggish, the dramatic rise in energy prices over recent years means that more and more individuals and companies will be making decisions based on total occupancy costs rather than first purchase or rental costs.

Given that an EPC has to be provided prior to the signing of a lease or contract for sale, it must be considered as a material item in the decision to conclude the deal, based on the reasonable assumption that it is has been produced by an independent expert as defined in the EPBD, using an approved methodology/ software and registered with the appropriate authorities.

Process

The EPBD central aim is that a qualified and regulated independent expert undertakes the process of assessing the energy performance of a building, either as a desktop exercise with all the building drawings for a new build or by visiting and assessing an existing building.

The temptation is of course to cut corners, and CLG is considering new guidance regarding the use of data gatherers, where an unqualified person makes a visit to a building to gather information for the energy assessor.

This can have significant efficiency benefits, and many would say is an acceptable practice for a housing association or local authority with a large housing stock of similar units and a group of officers with a good knowledge of the stock and working within an audited QA environment.

Problems are bound to occur, however, if this approach is extended to individual houses and commercial buildings, where the downward pressure on EPC prices may tempt some assessors to reduce costs by using unqualified and inexperienced staff.

What should solicitors do?

As advisers to the conclusion of lease and sale agreements, solicitors should ascertain as far as possible that an EPC has been produced in accordance with the EPBD and the Energy Performance of Buildings (Scotland) Regulations 2008, confirming with the energy assessor’s protocol organisation that the EPC has been registered and that the energy assessor is qualified to assess that property, that they had suitable PI insurance at the time of survey, and that they have not been disbarred from undertaking assessments.

The trigger point for EPCs for some buildings, such as workshops with no fixed means of heating, is by no means clear as the Building (Scotland) Regulations 2004 and the guidance produced by the Building Standards Division on the 2008 Regulations have subtly different definitions. In the case of a doubt as to whether a building actually needs an EPC, the author would recommend the precautionary principle – given that the cost of an EPC is usually tiny relative to the cost of renting or buying property and the implications of non-compliance are a potential penalty charge and, more importantly, a lost lease or sale.

In the case of new builds the author recommends that solicitors seek written confirmation from local authorities that an EPC has been produced by a certifier of design (section 6 – energy), or that they have undertaken (as verifier) a check of all the inputs to the underlying calculation as required by the EPBD. In either case the local authority should confirm that that they have uploaded the EPC to the building standards register and assigned to it a unique reference number.

Richard Atkins is a Chartered Architect, a member of the Royal Institute of British Architects and a Fellow and Council Member of the Royal Incorporation of Architects in Scotland. He has been instrumental in the establishment of www.RIAS-regs.co.uk, which provides a scheme to approve Certifiers of Design (Section 6 – Energy) Domestic in Scotland, and www.Architectural-EPC.co.uk, a scheme to approve on-construction energy assessors for dwellings in England, Wales and Northern Ireland.