Energy Performance Certificate Rating Research Articles

The over-prediction of energy use by EPCs in Great Britain: A comparison of EPC-modelled and metered primary energy use intensity

This analysis compares the difference between the Energy Performance Certificate (EPC)-modelled and smart-meter measured annual energy use on a like-for-like basis in 1,374 gas-heated British households from the Smart Energy Research Lab (SERL) Observatory. EPCs and metered energy use were converted to primary energy use intensity (PEUI) to provide a comparison of the same quantity for the first time.We show that EPCs predict significantly more energy use than metered in homes in Great Britain. EPC bands A and B show no statistically significant difference, but all other bands show a significant gap which increases as EPC rating worsens. The PEUI gap widens from −26 kWh/yr/m2 (−8%) for band C to −276 kWh/y/m2 (−48%) for bands F and G. Unlike previous research, we show that the difference persists in homes matching the EPC-model assumptions regarding occupancy, thermostat set-point and whole-home heating; suggesting that occupant behaviour is unlikely to fully explain the discrepancy.EPCs are a core tool in the residential energy sector, and the gap between EPC-modelled and metered energy use could have a significant impact on policy, research, and industry. Future research should investigate disaggregated components of energy use, the underlying thermal model, and assumptions regarding building characteristics.

Uncovering the price effect of energy performance certificate ratings when controlling for residential quality

In the last decade, market-mediated financial incentives for energy-efficient construction drawn from information policy, including energy performance certificates (EPC), have been intensively researched. While hedonic-based research seems to confirm a positive correlation between residential prices and EPC ratings, opinion-based studies have found that these ratings have a negligible effect on price formation. This paper explores whether insufficient control of non-energy-related architectural attributes in hedonic specifications is responsible for such a divergence. To achieve this, a case-by-case quality assessment is performed for a sample of listed apartments in Barcelona. Then, architectural assessment is introduced as a control in the context of hedonic analysis. The results suggest that EPC ratings show a positive correlation with prices (1.8% price increase for each EPC increment) only when location, general architectural attributes, and basic quality attributes are controlled. Conversely, when architectural quality is thoroughly controlled, such a correlation disappears. However, EPC rating remains as a price driver (7.5% price increase for A/B/C ratings) for the upper tier of apartments in central and affluent zones. Such findings have relevant implications for developers and energy policy.

Buildings’ energy performance, green attributes and real estate prices: methodological perspectives from the European literature

Buildings’ energy efficiency may affect real estate prices, but the literature suggests that the effects of green attributes and Energy Performance Certificate ratings on the value of residential properties in Europe are still variable across contexts. The adoption of methods able to appropriately investigate this issue is thus essential. In this framework and to support future studies, this paper offers a methodological review of scientific works on the topic published in the last five years. Our work does not only represent an update of other reviews, but it originally analyses the papers by a methodological viewpoint. Results highlight a progressive refinement of the research questions and methods adopted. Then, the increasing importance of concepts such as latent variables and green attributes in the real estate pricing process is detected and identified as a field to be furtherly explored. Finally, Structural Equation Modelling is proposed as a promising approach for future studies.

Minimum energy efficiency – is the energy performance certificate a suitable foundation?

PurposeClimate change is one of the most significant challenges of our time. The existing housing stock is a crucial component in achieving international and national climate change targets through energy efficiency improvements. The private rental sector incorporates some of the worst performing housing. To address this, the UK has implemented the minimum energy efficiency standard, based on the energy performance certificate rating. However, the energy performance certificate has a number of criticisms in the UK and across the EU. This viewpoints paper discusses the primary criticisms of the EPC and whether these undermine the minimum energy efficiency standard.Design/methodology/approachThis viewpoint paper draws on the recent work across academic, government and professional literature to develop a critique of the energy performance certificate and its underlying methodology as a basis on which to form the minimum energy efficiency standard.FindingsThe paper concludes that based on the current form of the energy performance certificate in the UK, the minimum energy efficiency standard is likely to unfairly advantage some landlords and penalise others. This has implications for landlords, tenants and the wider housing stock.Originality/valueThis paper presents a discussion of the new minimum energy efficiency standard based on the limitations of the energy performance certificate. It has implications for policymakers, researchers and practitioners in the private rental sector.

Impact of Adding Comfort Cooling Systems on the Energy Consumption and EPC Rating of an Existing UK Hotel

In light of the recent launch of the Minimum Energy Efficiency Standard and its expected impact on the commercial buildings sector, this study investigated the impact of adding cooling systems on the annual energy consumption, carbon dioxide emissions and energy performance certificate (EPC) rating of an existing UK hotel. Thermal Analysis Software (TAS) was used to conduct the study, and the baseline model was validated against the actual data. As is the current accepted procedure in EPC generating in the UK, the cooling set points of the guest rooms were set to 25 °C, resulting in a small increase in the annual energy consumption and emission rates, but not enough to change the energy performance certificate rating. Also, it was found that an improvement in energy consumption and energy performance certificate rating of the hotel would be achieved if the new systems replaced the existing heating systems in the guest rooms. Further simulations investigated more realistic situations, in which occupants may decide to keep their rooms at cooler temperatures. The results from this round of simulations showed considerable increase in the energy consumption and emissions of the building; however, these results would not be considered in the current approved procedure for EPC generating.

Limited Attention in the Housing Market: Threshold Effects of Energy-Performance Certificates on Property Prices and Energy-Efficiency Investments

We study the effects of limited attention on property prices and energy efficiency (EE) investments in the housing market. Using a novel dataset, we analyse over 5 million residential property sale transactions in England and Wales, each containing information about sale price, property and location characteristics, and a mandatory energy performance certificate (EPC). The EPC includes a continuous energy cost rating (SAP rating) which is mapped into seven colour-coded rating bands (ranging from green A to red G). Applying a Regression Discontinuity Design (RDD), we document significant price discontinuities at the rating band thresholds. We estimate that - holding the underlying SAP score equal - being in a higher rating band increases the final sale price of a property between 0.8% and 2.5% ($2,000 and $6,625 based on average sale prices) depending on the threshold crossed. The presence of price discontinuities suggests that individuals are attentive to the simpler colour-coded rating band and partially inattentive to the more precise SAP rating. We present a simple model for estimating the degree of inattention and show that, for a given level of attention, rating bands reduce attention to the SAP rating by 25% on average. Importantly, the detected price discontinuities appear to influence market behaviour: Sellers whose property receives an EPC rating just below a threshold to the next-higher rating band are between 0.4% and 11% more likely to make last-minute EE investments before placing their property on the market. We discuss a number of recommendations of how to best leverage these threshold effects to improve policy design, which can be extended to other settings where the provision of simplified information creates reference thresholds.

Is there an economic case for energy-efficient dwellings in the UK private rental market?

The rented sector of the housing market is a key concern for policies trying to improve dwelling-level energy efficiency levels. Currently, stepping up energy efficiency levels in the residential sector is hindered by a number of uncertainties. For rental properties, this is complicated by the split incentive problem (i.e. landlords do not benefit directly from the savings arising from these investments). Instead, the benefits are enjoyed by the tenants of these upgraded properties via lower energy bills and/or enhanced thermal comfort. Hence, the only way to recoup the investments is typically for landlords to obtain higher rents. This study confirms that energy efficiency features, as measured by the Energy Performance Certificate rating, are positively associated with a small but significant influence on transaction prices and quoted rental prices. Conversely, there appears to be a price discount for dwellings in the lowest energy performance category. A model of time-on-market yields inconclusive results but there is some, albeit weak, evidence of a negative relationship between time-on-market and energy efficiency ratings as more energy efficient dwellings tend to lease up more quickly.

Household energy efficiency and health: Area-level analysis of hospital admissions in England

IntroductionFuel poverty affects up to 35% of European homes, which represents a significant burden on society and healthcare systems. Draught proofing homes to prevent heat loss, improved glazing, insulation and heating (energy efficiency measures) can make more homes more affordable to heat. This has prompted significant investment in energy efficiency upgrades for around 40% of UK households to reduce the impact of fuel poverty. Despite some inconsistent evidence, household energy efficiency interventions can improve cardiovascular and respiratory health outcomes. However, the health benefits of these interventions have not been fully explored; this is the focus of this study. MethodsIn this cross sectional ecological study, we conducted two sets of analyses at different spatial resolution to explore population data on housing energy efficiency measures and hospital admissions at the area-level (counts grouped over a 3-year period). Housing data were obtained from three data sets covering housing across England (Household Energy Efficiency Database), Energy Performance Certificate (EPC) and, in the South West of England, the Devon Home Analytics Portal. These databases provided data aggregated to Lower Area Super Output Area and postcode level (Home Analytics Portal only). These datasets provided measures of both state (e.g. EPC ratings) and intervention (e.g. number of boiler replacements), aggregated spatially and temporally to enable cross-sectional analyses with health outcome data. Hospital admissions for adult (over 18 years) asthma, chronic obstructive pulmonary disease (COPD) and cardiovascular disease (CVD) were obtained from the Hospital Episode Statistics database for the national (1st April 2011 to 31st March 2014) and Devon, South West of England (1st April 2014 to 31st March 2017) analyses. Descriptive statistics and regression models were used to describe the associations between small area household energy efficiency measures and hospital admissions. Three main analyses were undertaken to investigate the relationships between; 1) household energy efficiency improvements (i.e. improved glazing, insulation and boiler upgrades); 2) higher levels of energy efficiency ratings (measured by Energy Performance Certificate ratings); 3) energy efficiency improvements and ratings (i.e. physical improvements and rating assessed by the Standard Assessment Procedure) and hospital admissions. ResultsIn the national analyses, household energy performance certificate ratings ranged from 37 to 83 (mean 61.98; Standard Deviation 5.24). There were a total of 312,837 emergency admissions for asthma, 587,770 for COPD and 839,416 for CVD. While analyses for individual energy efficiency metrics (i.e. boiler upgrades, draught proofing, glazing, loft and wall insulation) were mixed; a unit increase in mean energy performance rating was associated with increases of around 0.5% in asthma and CVD admissions, and 1% higher COPD admission rates. Admission rates were also influenced by the type of dwelling, tenure status (e.g. home owner versus renting), living in a rural area, and minimum winter temperature. DiscussionDespite a range of limitations and some mixed and contrasting findings across the national and local analyses, there was some evidence that areas with more energy efficiency improvements resulted in higher admission rates for respiratory and cardiovascular diseases. This builds on existing evidence highlighting the complex relationships between health and housing. While energy efficiency measures can improve health outcomes (especially when targeting those with chronic respiratory illness), reduced household ventilation rates can impact indoor air quality for example and increase the risk of diseases such as asthma. Alternatively, these findings could be due to the ecological study design, reverse causality, or the non-detection of more vulnerable subpopulations, as well as the targeting of areas with poor housing stock, low income households, and the lack of “whole house approaches” when retrofitting the existing housing stock. ConclusionTo be sustainable, household energy efficiency policies and resulting interventions must account for whole house approaches (i.e. consideration of the whole house and occupant lifestyles). These must consider more alternative ‘greener’ and more sustainable measures, which are capable of accounting for variable lifestyles, as well as the need for adequate heating and ventilation. Larger natural experiments and more complex modelling are needed to further investigate the impact of ongoing dramatic changes in the housing stock and health. Study implicationsThis study supports the need for more holistic approaches to delivering healthier indoor environments, which must consider a dynamic and complex system with multiple interactions between a range of interrelated factors. These need to consider the drivers and pressures (e.g. quality of the built environment and resident behaviours) resulting in environmental exposures and adverse health outcomes.

What do empirical findings reveal about modelled energy demand and energy ratings? Comparisons of gas consumption across the English residential sector

Energy ratings and national housing energy models are useful for energy policy evaluation and development, but limited empirical validation of energy demand estimates is available across residential sub-sectors. This study used data from a sample of over 2.5 million gas-heated dwellings in England from the National Energy Efficiency Data-Framework (NEED) to compare with estimates of 2012 gas consumption from the Cambridge Housing Model (CHM), a national energy stock model. The analysis quantified differences by dwelling type, size, and age band. It also compared variations in gas consumption from NEED dwellings with that expected from Energy Performance Certificate (EPC) bands.The findings show that the CHM overestimates average gas consumption from NEED for all dwelling types built before 1930, most notably for large detached dwellings. For other dwellings built since 1930, the model estimates were in relatively close agreement with NEED data. Furthermore, a simple comparison between estimated gas consumption and NEED data suggests savings from upgrading dwellings to at least EPC band C would be substantially lower than expected.Findings raise question regarding assumptions used in models and EPC ratings, including occupancy and space heating patterns, and have implications for development of energy models and policy regarding energy efficiency programmes.

Implementation of biomass boilers for heating and domestic hot water in multi-family buildings in Spain: Energy, environmental, and economic assessment

In the residential sector, biomass offers great potential to achieve the goals of the Europe 2020 strategy for climate and energy. With their policies, the different countries of the EU encourage actions in building stock such as the replacement of boilers with more efficient boilers and a greater use of renewable energy. This article explores the substitution of central fossil fuel boilers (heating oil, liquefied petroleum gas, and natural gas) with central biomass boilers to cover all heating and domestic hot water needs in multi-family buildings in Spain. Typical buildings from five cities located in each different climate zone of peninsular winter were chosen for this study. A thorough energy, environmental, and economic analysis is conducted. A reduction by as much as 93% in primary non-renewable energy consumption can be achieved, and CO2 emissions can decrease as much as 94%, resulting in better and higher energy performance certificate ratings. Despite the required investment, savings in all cases studied are achieved. The savings are greater with the increasing severity of winter weather, with a substantial reduction in energy costs.

Assessing Lighting Energy Saving Potential from Daylight Harvesting in Office Buildings Based on Code Compliance & Simulation Techniques: A Comparison

Daylighting is a cornerstone strategy aiming at reducing a building's energy consumption. Daylight responsive dimming is a proven, mature technology, that significantly reduces lighting energy use, which in turn, affects both energy consumption and peak loads as well. Although in Energy Performance Building Directive (EPBD), the use of a daylighting harvesting system is encouraged, the specifications are rather limited based on EN 15193:2007. According to literature, the potential for lighting energy savings from daylight integration, can approach 60.0%. Consequently, a more accurate and detailed calculation method could possible result in downgrading a building's energy performance rating, when compared with simplified procedures that may underestimate these savings.The paper builds on the authors’ previous work, providing an overview of the methods and techniques used to estimate lighting energy savings due to daylight harvesting. An extensive comparison is carried out between the resulting energy savings as estimated by the method adopted in EN 15193:2007 and its variation by the Greek Regulation for the Energy Efficiency of Buildings (KENAK), with savings calculated by more complex calculation methods that require the use of simulation tools.According to the results, great differences are observed in the estimated lighting energy savings between simulation and EN15193:2007. These differences still exist even when the parameters used in EN15193 are calculated by an external software affecting energy performance certificate rating.

Empirical evaluation of the energy and environmental performance of a sustainably-designed but under-utilised institutional building in the UK

This paper presents a systematic, socio-technical and empirical evaluation of the actual energy and environmental performance of a sustainably-designed institutional building (Southeast England), intended to be a teaching tool and ‘living laboratory’ of sustainability. Despite the building being designed to high sustainability standards (Energy Performance Certificate rating of A, low reliance on fossil fuels, natural ventilation and rainwater harvesting) and also being under-utilised during the in-use stage (lower hours of occupation and number of occupants), its actual energy-related carbon dioxide-equivalent emissions are four times more than predicted. This is due to poor energy management of the building, underperformance of the biomass boiler and wasteful energy practices in terms of excessive winter overheating in the atrium, inappropriate lighting controls, and electrical equipment being left on standby. Due to lack of training and understanding of the energy manager, the building management system was not used adequately and issues with installation, commissioning and maintenance of the biomass boiler led to its disuse; however the photovoltaic system generated electricity as expected. Findings from the study show how a mixed-methods approach of building performance evaluation (BPE) should be embedded as part of the build process, to ensure that performance outcomes are met in reality.

Energy performance ratings and house prices in Wales: An empirical study

This paper investigates the effect of Energy Performance Certificate (EPC) ratings on residential prices in Wales. Drawing on a sample of approximately 192,000 transactions, the capitalisation of energy efficiency ratings into house prices is investigated using two approaches. The first adopts a cross-sectional framework to investigate the effect of EPC rating on price. The second approach applies a repeat-sales methodology to investigate the impact of EPC rating on house price appreciation. Statistically significant positive price premiums are estimated for dwellings in EPC bands A/B (12.8%) and C (3.5%) compared to houses in band D. For dwellings in band E (−3.6%) and F (−6.5%) there are statistically significant discounts. Such effects may not be the result of energy performance alone. In addition to energy cost differences, the price effect may be due to additional benefits of energy efficient features. An analysis of the private rental segment reveals that, in contrast to the general market, low-EPC rated dwellings were not traded at a significant discount. This suggests different implicit prices of potential energy savings for landlords and owner-occupiers.

Modelling the effect of energy performance certificate rating on property value in the Belfast housing market

Purpose – This study aims to investigate the relationship between energy performance and property sale price in the Belfast housing market. How energy efficiency is contributes to sale price and thus appraisal value is of growing concern. The obligatory measurement of energy efficiency in private dwellings seeks to encourage improvements in energy performance. This may be capitalised into property value and may stimulate demand for energy-efficient buildings. However, the relationship between energy performance and property value remains nebulous, complex and under-researched – in part due to data limitations. Design/methodology/approach – Using a hedonic pricing specification, this paper measures the effect of energy performance certificates (EPCs) on residential property value. It examines the relationship between 3,797 residential sales transactions across the Belfast housing market, showing the percentage effect on property value with respect to energy performance. Findings – The results indicate a small but positive relationship between better energy performance and higher selling prices. Nonetheless, the findings point towards strong preference, demand tastes and a complex intra-relationship between EPCs and their capitalisation into property value. Pertinently, the findings point towards any energy-efficient-related price effect affect to be marginal alongside more “quality”-based market behaviours. Research limitations/implications – Analogous with other studies, data deficiencies and a lack of incorporating price determining variables (missing determinants) such as heating type and glazing type introduces omitted variable bias and endogeneity problems within the model structure. Originality/value – This paper contributes to emerging literature and policy debate surrounding the measurement and implementation of energy-efficiency certification through a greater understanding of energy performance characteristics in determining property value.

Energy performance certification as a signal of workplace quality

Energy performance labelling and certification have been introduced widely to address market failures affecting the uptake of energy efficient technologies, by providing a signal to support decision making during contracting processes. The UK has recently introduced the Energy Performance Certificate (EPC) as a signal of building energy performance. The aims of this article are: to evaluate how valid EPC’s are signals of occupier satisfaction with office facilities; and to understand whether occupant attitudes towards environmental issues have affected commercial office rental values. This was achieved by surveying occupant satisfaction with their workplaces holistically using a novel multi-item rating scale which gathered 204 responses. Responses to this satisfaction scale were matched with the corresponding EPC and rental value of occupier’s workplaces. The satisfaction scale was found to be both a reliable and valid measure. The analysis found that EPC asset rating correlates significantly with occupant satisfaction with all facility attributes. Therefore, EPC ratings may be considered valid signals of overall facility satisfaction within the survey sample. Rental value was found to correlate significantly only with facility aesthetics. No evidence suggests rental value has been affected by occupants' perceptions towards the environmental impact of facilities.

Does Greater Energy Performance have an Impact on Real Estate Revenues?

In order to further mitigate negative environmental impact, the European Union (EU) has adopted the so called “20-20-20” goals, in which a (primary) energy reduction target is included. Subsequently, the Energy Performance Certificate (EPC) for buildings (via the Directive on the Energy Performance of Buildings) has been implemented in EU member states. In this paper, we examine the impact of EPCs on office revenues. By and large, we find that better EPC ratings have a positive and significant effect on revenues. This research area is important as improved energy efficiency in the built environment is necessary in order to reach the EU reduction target.

Is Instrinsic Energy Efficiency Reflected in the Pricing of UK Office Leases?

The aim of this research is to investigate whether the intrinsic energy efficiency rating of an office building has a significant impact on its rental value. Using a sample of 817 office buildings with Energy Performance Certificate (EPCs), we investigate whether a pricing differential can be identified depending on the energy rating. While previous analyses of this topic have typically relied on appraisal-based and/or asking rent data, our dataset contains actual contract rents as well as information on lease terms. The results indicate a significant rental premium for energy efficient buildings. However, we find that this premium appears to be mainly driven by the youngest cohort of state-of-the-art energy efficient buildings. We also find that tenants of more energy efficient buildings tend to pay a lower service charge but this link appears to be rather weak and limited to newer buildings. Hence, we argue that the information contained in the EPC is still not fully taken into account in the UK commercial property market with the possible exception of both the highest and the lowest EPC ratings.