I’m currently moving house. It’s stressful, but the process offers a real highlight for the policy geek in me, as I’ve commissioned an EPC in order to sell my current home and can pore over them for homes I’m considering moving to. Having lobbied for them as a tool with the potential to influence people’s purchasing decisions in the shorter-term, and the potential to be transformed into a regulatory instrument that drives the retrofitting of draughty, inefficient houses in the longer-term, I was keen to see what the consumer experience of them was like.
It didn’t start out well.
At the selling end, the first significant mention of them was by one estate agent who said “you have to get this thing called an EPC. They’re a total waste of time and money.” None of the other estate agents I met were quite so vehement, but they just mentioned EPCs in passing as a legal requirement. And when I was looking at homes as a buyer there was only resounding silence. EPCs were never mentioned.
Sending the right message
So the messengers in the process aren’t exactly selling EPCs and their potential benefits. As a result, house buyers don’t look to them as a useful source of information that can tell them how much their home is going to cost to run and what they can do to reduce those costs. No one is going to make a decision between two houses based on energy costs – but they could and should be a negotiating tactic. My new home has an ancient boiler and doesn’t have enough loft insulation – ideally I could have knocked some money off the sale price to recognise that.
Because that doesn’t happen, people selling their homes have no incentive to improve the energy performance of their home in order to impress buyers (in the same way that we painted over our questionable orange ‘statement wall’). And when you’re a proud new home owner, you have no incentives and no strong messages that suggest it would be worth investing in the energy efficiency improvements mentioned in the EPC for your new home.
How accurate are EPCs?
Messages aside – what about the accuracy and usefulness of EPCs for those of us who indulge in actually reading them? Again, not great. The man who did the EPC for my current home was an unlikely environmentalist but he felt strongly that people didn’t realise how useful they were and that the whole system was poorly run. He said that most people don’t have any interest in their EPC, so the awareness raising potential of his visits to peoples’ homes is missed.
And it was clear that the measurement system is less than ideal. Based on when my house was built the assessor made various assumptions about the levels of insulation I’d have. I know them to be incorrect but the system couldn’t account for that. As a result the EPC doesn’t suggest getting cavity wall insulation, as it assumes it’s there, and we probably got a better ‘score’ than we should have done. My colleague provides an even worse example. She lives in a Victorian flat with windows that are single glazed and clearly do not fit, yet her property scored a B rating. A mere 1 per cent of homes in the UK score ratings of A and B combined, and I’m sorry to say that my colleague’s is very unlikely to be one of them. She’s convinced that the energy assessor just made it up, which unfortunately tallies with the stories from my assessor about unscrupulous companies doing EPCs over the phone and relying on the answers from homeowners.
Policy design – will the Green Deal help?
So EPCs roll on as something with massive potential that it going totally unrealised. Getting the messaging right would help enormously – as it will make a huge difference hear messages from estate agents and, gradually, from potential buyers, that EPCs are worth engaging with. Going further still, they could become a harder measure. With enough lead in time and warning, it could become impossible to sell a home unless the suggested improvements on an EPC have been done, or it could be required that they must be done by the new owner within two years of purchase. That’s unlikely, I admit. So let’s hope that the Green Deal focuses more attention on EPCs, directing consumer attention to them and prompting take up of the Green Deal in response to suggestions that home buyers and sellers receive on their EPC.
As we look at how to make the Green Deal work, my experience with EPCs is a timely reminder that getting a policy mechanism in place is the first step, not the last. Policy success lies in how people interact with them and, in the case of EPCs, it has not been great. They have not driven anywhere near the level of energy efficiency retrofit that they have the potential to. We cannot afford this outcome with the Green Deal as well. Good policy design is essential but, in the end, it needs to be something that people think will work for them, amidst all the competing priorities in their life, and which they decide to pursue.