More about their report on this link:
It is difficult to dislike any of their 8 recommendations, except perhaps for no. 2 (reproduced below).
I am concerned that calling for a review such as this could provide a reason (or excuse?) to delay taking action on actually implementing policy:
"The Department for Energy and Climate Change should undertake a review of the metrics used for home energy performance"
I wanted to do my bit to help DECC act on this report quickly. As someone who’s been involved with home energy performance metrics since 1996, and managed the development of RdSAP (see elsewhere on my website for more about this) I thought I would be well placed to respond to recommendation 2. So click on Read More, and read on!
When energy performance metrics for homes were being developed, some decades ago, the metric they should be based on was the subject of much debate. Eventually, a decision was reached - the metric would be based on the annual cost of the energy required to provide a standard level of home comfort. To normalise this, and avoid the metric being unduly influenced by the size of the home rather than its intrinsic energy performance, the annual cost was to be divided by the home’s floor area. Whether created for new homes using SAP, or existing homes using RdSAP, home EPCs still use this as their basic metric.
To help readers appreciate the difficult choices surrounding this metric, here’s an example.
Different motivations – three examples
Take a home – a typical, smaller 3 bed semi in Buckinghamshire. Let’s say it is going to receive a programme of improvement, and this starts with the old, inefficient heating system. However, what constitutes an ‘improvement’ depends on the improver’s viewpoint. Consider this from the point of view of 3 possible improvers – let’s call them Mr Brown, Ms Green, and Mr&Mrs Pink. In order of installation cost, here are their stories:
Mrs and Mrs Pink are recently retired, cash poor but asset rich: like many others, they supplement their inadequate pension by renting out property. They have purchased this house as their second rental property. They want to provide a home to a local family at a fair rent, and they do have the means to make some improvements to make the property low maintenance. Through their past experience as landlords, they know that their biggest concern is convenience – they don’t want constant repairs, or to have to deal with problems getting access for a heating engineer to carry out the annual safety check that’s required on a gas heated home. They decide to replace the old wet heating system with 100% efficient, on peak electric individual room heaters (‘the salesmen said they are the most efficient system available today. Ever such a nice man..’). Cost to install : £
Mr Brown is a retired widower. He intends to live in the home, and with an eye on his pension he wants to keep the bills as low as possible. He decides to replace the 20 year old wall mounted gas boiler with a new, efficient condensing boiler. (Luckily for Mr Brown this house is on the mains gas network, otherwise his best choice in terms of running cost would be heating oil). Cost to install : ££
Ms Green has bought the property as her first home having previously rented. Not happy with the way the older generation has misused our planet, she is very environment conscious and wants to reduce her carbon footprint as much as possible. Having bought a home with plenty of outdoor space, she has room to install a biomass heating system and supplementary log burner in the living room. Ooh, lovely. Cost to install : £££, but she should hopefully receive the RHI to help offset the ongoing maintenance and fuel costs, providing she follows the Ofgem rules.
In summary, here is an outline of the effect on the home’s energy rating, based on three possible metrics – SAP as present (cost), Kwhr/m2 (energy), environmental impact rating, EIR (carbon). I should stress that this outline is a ‘thought experiment’ and isn’t underpinned by modelling, but it should be correct in principle:
* Assuming this metric is based on useful energy; if based on primary energy or delivered energy the result could differ. See elsewhere for an explanation of these terms
** A metric base on carbon dioxide emissions that was previously shown on the EPC, but was dropped in response to lobbying by Consumer Focus, who had asked for the EPC's design to be made more consumer-friendly
Mr and Mrs Pink’s improvement will cost the tenants more to run, compared to the old mains gas boiler, although it will benefit the landlord as it will be pretty much maintenance free. The useful energy used per square meter is the only metric where this change has improved the energy performance of the home. On peak electricity is a relatively high cost and high carbon fuel, which is why the improvement worsens both the SAP and EIR. However, the efficiency of on peak electric heating is 100% - the salesman spoke the truth! – which is why the useful energy used per square meter is lower.
Mr Brown’s improvement is likely to be reflected in a better rating on all three of these metrics. It saves money on his fuel bills, it reduces the useful energy used per square meter, and it saves carbon emissions. Mains gas is a relatively low cost, low carbon fuel, and this is why it scores well on SAP and EIR. The improvement in efficiency from the old boiler lowers the useful energy used per square meter.
Ms Green’s improved heating system may cost her a little more to run, but creates much lower carbon dioxide emissions. She is happy with the extra cost, as her motivation is to reduce her carbon footprint. Thus, the EIR is the only metric where this change has improved the energy performance of her home. In terms of the SAP and Kwhr/m2 metrics, it’s likely that both will worsen, although the change to the SAP is likely to be more marked than the change to the Kwhr/m2 metric. It should be fairly obvious that the cost of the biofuel compared to the cost of mains gas influences the change to the SAP metric, but there’s actually more to it than this – we’ll explore this next.
The double problem with the SAP rating when installing a low carbon heat source
Respublica’s excellent report notes, at Page 6 Recommendation 2, that the treatment of low carbon heat sources is an inaccuracy in the current home energy performance metric:
“There are concerns that the current metrics used to assess the energy performance of a home – Energy Performance Certificates (EPC) and Standard Assessment Procedures (SAP) – do not accurately measure the performance of a property. For instance, installing a low carbon heat source will improve a property’s energy performance, but may actually lower its SAP rating”
One reason why the current metric acts this way is the higher cost of biomass compared to mains gas. This is a given; we can’t wish the cost of biomass down, or the cost of gas up, although by installing more biomass we could hope that economies of scale will eventually bring the price down. If the prices change, this is reflected in the SAP rating, via a process of updating the fuel costs used in SAP.
There is also a second reason that may be less commonly understood. SAP (and RdSAP) use the heating system efficiency in the calculation of the energy used, so a higher efficiency system tends to give a higher rating – except for electricity, where the much higher fuel cost brings the rating down again. The program used to calculate this accesses a database of product efficiencies (the Product Efficiency Database).
Most gas boilers and oil boilers are included in this database, but only a few biomass boilers appear on it. There is a cost involved in appearing on this list, notably to test the system efficiency under ‘real’ rather than laboratory conditions, and perhaps this is partly why few boilers are listed.
When an energy assessment is carried out for a biomass boiler that does not appear on the list, the calculation must use a default (assumed) efficiency, and for biomass boilers this is relatively low figure.
Perhaps there are two possible solutions to this, neither of which involve changing the energy performance metric?
1) Require biomass boiler manufacturers to have their products tested and recorded on the list before they may sell in the UK domestic market. I suspect this would contravene EU law, but it would certainly put the cost squarely on the industry. In fact, it would bring biomass boilers more in line with oil and gas boilers, which are required to meet a set minimum efficiency to comply with the EU Boiler Efficiency Directive. It was this Directive that led to the establishment of the original Boiler Efficiency Database (SEDBUK) that has now expanded into the Product Efficiency Database.
2) Amend the default efficiency assumed for biomass boilers in SAP. This would require some spend from the public purse, and arguably it could not be done without the co-operation of the industry, which would need to provide adequate evidence to support such a change.
The example above illustrates how installing a low carbon heat source only improves a property’s energy performance if you define energy performance in terms of carbon dioxide emissions (EIR). On the other two definitions – cost and Kwhr/m2 - it worsens performance, partly due to the lack of specific entries in the Product Efficiency Database.
The example also shows that there could be unintended consequences of changing the metric, for example to one based on Kwhr/m2. Under this metric, recommendations to improve energy performance would include replacing a cheap to run, mains gas heating system with a more expensive on peak electric system.
Whilst Respublica’s excellent report recognises that cost savings are not the only motivation to install improvements, we do need to bear in mind that the high cost of heating our homes is a major contributor to poverty. There is also evidence to show that fuel poverty – associated with high heating costs and low SAP ratings – contributes to poor health and raises costs for the NHS. Basing our home energy performance metric on something that encourages the installation of more expensive heating seems counter-productive.
On balance. I think it would be inappropriate to change our EPC performance rating to lose the connection with that cost. What's more, a protracted period of debate on the metric to be used could simply delay taking action. What do others think?