All change: social housing decarbonisation and the EPC action plan

By Knauf Insulation UK & Ireland
October 07, 2020

In just one week, the government has rendered the majority of social housing energy efficiency plans obsolete. A long-overdue fix of the clear deficiencies in the EPC regime, and details of the future public funding streams for social housing refurbs, have changed the fundamentals of social housing decarbonisation. At the centre is a shift to monitoring the actual energy performance of properties in the real world. That’s good news for all of us, but presents short-term challenges to social housing providers. We can help you navigate them.

EPC ratings are the foundation of most decarbonisation plans

Will the London rail commuter population double or halve in the next ten years? If it’s your job to buy the rolling stock, and build the rail network, the wrong answer may see sardine-squeezed commuters in a dysfunctional capital or desolate stations criss-crossing the suburbs of London. Deserted monuments to your lack of foresight.

Big infrastructure decisions with similar timelines are facing social housing providers charged with decarbonising their housing stock. The demand on them requires significantly increasing home energy efficiency, dramatically reducing reliance on fossil fuel heating while protecting occupants from fuel poverty.

To make these long-term plans, social housing providers are relying on the only tool they have available to them. And why not? It is the same tool that government uses to set targets and track emissions – the Energy Performance Certificate. Or at least the SAP or RdSAP software that underpins the EPC.

But EPCs are changing – substantially

In its EPC Action Plan, the government has indicated a direction of travel that will necessitate a rewrite of each and every social housing provider’s stock decarbonisation plan.

That Government Action Plan said;

‘Energy Performance Certificates will need to move from a reflection of the features of a building (fabric, services and installed improvement measures) to a true measure of ‘in-use’ building performance’.

I.e. EPCs will shift from notional tickbox exercises to genuine, evidence-based records of a building’s actual performance.

The impetus for the decision was made obvious in our recent project reported in Inside Housing. Retrofitted homes showed an average home fabric efficiency improvement of 31% post-retrofit with one home improved by over 50%. And yet the EPC ratings barely changed.

The EPC Action Plan is not just aspirational. It offered a first review date of March next year when a report evaluating ‘in-use’ home fabric measurement technologies will be published.

To be clear, this shift to real performance is excellent news. It will result in a radical improvement in energy efficiency, with all the accompanying benefits. The challenge for social housing infrastructure planners – each told to design a programme to get all homes up to EPC level C perhaps – is that they have built their strategy around the very SAP software that is now under threat.

Design your strategy to deliver EPC C using SAP alone as a gauge of success and you may discover all the homes you have retrofitted in the next few years of your programme, when tested to Real Performance standards, turn out to be an EPC level D in the new world. A Sisyphean waste of time, and one that ill serves occupants wanting a low cost warm home.

The £3.8Bn carrot for adopting Real Performance standards

As this proposed change lands, in a piece of genuinely joined up government, the Business, Energy and Industrial Strategy Department has fired the starting gun on a scheme that offers Social Housing providers a route to better understand this new world. The £50m Social Housing Decarbonisation Fund (SHDF) Demonstrator offers the chance to bid in retrofit projects up to £13.5m, but uniquely those bids will need to demonstrate how they will measure in-use pre-retrofit and post-retrofit home performance.  

Bidders will even be required to demonstrate whether the homes can be run for 50kWh pm2 per year. A genuine energy performance target rather than the notional one promised in the current EPC but never measured. The costs of that measurement are also eligible project expenses.

The ambition of the programme appears clear; support Social Housing to learn to procure and retrofit to Real Performance standards while providing an early stage market for the developers of in-use efficiency measurement and even those offering ‘proven warm comfortable homes’ as a service.

With the £50m programme designed to tee up a much larger £3.8bn 10-year SHDF programme, the writing is on the wall for those making decarbonisation plans. Approach this latest funding round to only push your worst housing stock up a couple of EPC bands by the traditional measure at your peril. Instead, consider how your plans will incorporate the changing goal posts that will underpin the EPC v2.

Refurbishment today, New builds tomorrow

And for those in refurbishment teams struggling to get to grips with how to work to a shifting measure of success, you won’t be alone. If, as seems inevitable, this programme brings through in-use performance measurement at scale, consider the application of those same tools for new build homes. Especially in the hands of a nascent New Homes Ombudsman with ‘fuel and energy performance’ in its remit and the power to levy fines of up to £50,000 per home.

We can help

The good news is that social housing providers don’t need to take a standing start. Our sister company Knauf Energy Solutions has already developed a fully monitored insulation retrofit service based on Real Performance standards. Underpinned by groundbreaking sensor technology, it uses a machine learning algorithm to measure the actual fabric performance of a home pre- and post-retrofit in just 12 weeks. This data informs a deep retrofit that delivers genuine energy efficiency improvements with a robust evidence base.

In the UK we’ve proven the approach with pilot projects on housing estates in Trafford and Eccles, while in Belgium we’ve launched a full commercial offering with a near €10m project pipeline. The hope is to grow a UK offer by taking forward a small number of schemes linked to the SHDF demonstrator.

If you’re a social housing provider seeking to genuinely improve your stock while learning how to orient decarbonisation plans around a radically different measure of success, contact [email protected].