Scrap EPCs to unlock deep retrofit market, MPs argue

The House of Commons environmental audit committee estimates decarbonising UK homes by 2050 will cost £342 billion - way above the government's estimates of between £35 and £65bn.

Environmental audit committee chairman Philip Dunne, MP, said: "Realism needs to be injected into the government. A much better understanding of cost, pace, scale and feasibility of skills development is desperately needed for net-zero Britain."

About 19 million homes need to be upgraded to reach energy performance certificate C rating and the committee heard in evidence this would entail an average cost of £18,000 in upgrades, not including heat pumps.

The committee's report argues that building renovation passports have the potential to provide more accurate data on energy usage, and can thus help to unlock green finance.

The committee recommends the government develops an approved standardised methodology and data framework for such passports which would eventually replace energy performance certificates (EPCs).

"This will give confidence to businesses that they can invest in upskilling and green jobs," said Phillip Dunne. "This must be properly reflected in the system that assesses energy efficiency: EPCs are outdated and should be replaced with building renovation passports, which set a clear pathway to decarbonise homes."

National Federation of Builders housing and planning policy head Rico Wojtulewicz said reforming certificates rather than future homes standards was the way to go.

"We hope they will also explore our recommendation to use stamp duty receipts to retrofit old homes and incentivise better new ones, as well as cut the VAT on the hardest to retrofit homes, our traditional builds," he said.

The Federation of Master Builders (FMB) called on the government to adopt the committee's recommendations in full, including cutting VAT on home improvements from 20 to five per cent.

FMB chief executive Brian Berry said: "Local builders must be at the heart of plans to green our homes, and a national retrofit strategy would provide them with the confidence they need to invest in the necessary skills and training requirements."

Brokers Hank Zarihs Associates, meanwhile said that a national strategy would motivate builders to go into green refurbishments and was something development and refurbishment finance lenders would support.

The committee was critical of the green homes grant system, launched 16 months ago, where only £125m worth of vouchers out of the £1.5bn budget has been spent.It would also like to see the reinstatement of a reduced rate of VAT payable on energy-saving materials at five per cent, while expanding its scope to cover energy storage, heat pumps and electric vehicle charging. Up until 2019, certain clean technologies were eligible for a reduced rate of VAT of 5 per cent.

Photo: Energiesprong