The Role and Reach of EPCs
The current Energy Performance Certificate (EPC) metrics fall short of driving the energy-efficient practices and demand for heating solutions necessary to achieve the UK Government’s net-zero targets. Originally designed as a compliance tool rather than a performance measurement system, EPCs require significant reform to ensure clarity, comparability, and alignment with actual building efficiency. Without precise energy performance data, financial institutions will continue to face challenges funding energy efficiency initiatives, which restricts the flow of finance into retrofitting the built environment.
Banks and financial institutions are calling for fast paced EPC reform to enable increased financial flows into energy efficiency measures.
OakNorth Corporate Affairs Director, Valentina Kristensen, said that “As an active lender in the commercial real estate market, OakNorth Bank recognises the critical role that EPCs play in assessing building energy efficiency. However, their current accuracy limitations and reliance on static data create barriers to effective decision-making. We support reforming EPCs to integrate real-time performance data, improving their reliability for borrowers and lenders alike. Enhanced EPCs would unlock more green financing, enabling targeted investment in retrofits and sustainable development.”
Current State Critical Challenges
EPCs current design and implementation presents significant obstacles to achieving their intended impact. We highlight two major challenges: accuracy and cost.
Accuracy and credibility issues
A major criticism of EPCs lies in their inaccuracy. One major theme coming from the multiple workshops we run with our members and other organisations that there is a significant discrepancy between predicted and actual energy consumption in buildings. This undermines their reliability as a decision-making tool, particularly in lower EPC bands where retrofitting challenges are more prevalent. High-quality, accurate data is essential for banks to unlock the flow of finance into retrofits. However, current EPC data suffers from several issues, including inconsistent quality and a lack of granularity.
Cost remains the main barrier to retrofit uptake
Cost remains a significant barrier to retrofitting, with 68% of homeowners identifying it as a key obstacle, according to NatWest’s Greener Homes Attitude Tracker. Although awareness of the long-term benefits is growing, incentives like the Energy Company Obligation (ECO) are underutilised due to misconceptions and limited public engagement. A reformed EPC system could play a pivotal role in addressing these issues by not just informing consumers but actively encouraging action.
Sustainability Lead at Ecology Building Society, Stephanie Landymore, said that “Reforms to EPCs are long overdue. Right now, making green improvements to your home can be a big investment in time and money. So it’s vital that lenders and householders have useful, reliable information to make decisions that will save money on energy bills as well as cut carbon emissions and unlock the financial products that support this.”
Opportunities for Reform
To ensure EPCs play a meaningful role in the UK’s decarbonisation efforts, several reforms are necessary:
Enhancing Data Accuracy
The integration of real-time data from smart meters has the potential to revolutionise the EPC system, transforming it into a dynamic tool that reflects actual building performance. Advances in heat loss mapping and satellite data offer additional layers of insight, enabling a more precise understanding of energy efficiency. Thermal imaging, whether from aerial or satellite sources, can identify inefficiencies in insulation, glazing, and roofing, bridging the gap between theoretical efficiency ratings and real-world performance.
Dynamic, continuously updated assessments would empower consumers with actionable insights, enabling them to track and optimise energy usage in real-time. Digital platforms are already demonstrating how continuous monitoring and personalised recommendations can drive energy efficiency improvements. These emerging technologies highlight the growing shift towards performance-based measures, which require a more detailed segmentation of property types and usage patterns. EPCs currently rely on static, generalised assumptions that fail to reflect how energy is consumed in different living conditions. A large, poorly insulated home occupied part-time has a vastly different energy profile from a smaller, well-insulated home with high occupancy, yet the current methodology does not account for these nuances. Integrating real-time data from smart home technology, alongside external validation through satellite imaging and heat mapping, would create a more accurate and responsive energy performance assessment.
At present, EPCs provide only a snapshot of energy performance at a single point in time. This approach is increasingly at odds with the growing trend towards dynamic energy management. Advances in real-time energy monitoring and smart home technology now allow users to track live consumption, identify inefficiencies, and implement corrective actions immediately. If data from smart thermostats, IoT devices, and automated heating controls were integrated, EPCs could evolve into personalised, adaptive tools that continuously reflect real energy usage patterns.
This shift would also address one of the primary criticisms of EPCs: their reliance on outdated and generalised assumptions about energy usage. Transitioning to a model that incorporates real-time data would enable EPCs to move beyond compliance checkboxes and become a living, adaptive system that supports ongoing energy optimisation. This transformation would not only empower consumers but also equip policymakers and financial institutions with up-to-date insights into a property’s actual energy and carbon performance, improving decision-making for green mortgages, retrofit incentives, and broader sustainability policies.
Commenting, Director of Strategy and Innovation at Experian, Scott Harrison, said that “Through our analysis we are seeing a disparity between the estimated energy usage and emissions on an EPC versus the real-world usage seen through meter readings. While EPCs may work as a segmentation vehicle, their suitability for portfolio-wide emissions tracking is questionable. Complementing EPCs with real-world energy consumption data would provide a measure that is sensitive to both generic building energy efficiency and household usage habits.”
Additionally, NatWest Climate Innovation Lead, Climate Data and Technology, Tracie Callaghan said that “EPCs have many limitations, not least of which is they are only an estimation of a property’s efficiency. Our analysis shows that EPCs underestimate energy consumption for highly rated properties and significantly overestimate it for lower-rated properties. This lack of alignment with real-world data creates a confidence gap that hinders action. Integrating high-quality, verifiable data sources could reduce effort while unlocking innovation to drive a positive transition.”
Therefore, EPC reform should begin with supplementing existing EPCs with in-use performance data rather than replacing them entirely. This approach would balance the goal of increasing coverage with the need to maintain accuracy.
Shifting Consumer Perception
To drive adoption, EPCs should focus not only on cost savings but also on the broader benefits of retrofitting. Insights from the Retrofit Communities Network suggest that homeowners are more likely to invest in retrofits when framed as enhancing comfort, resilience, and health. A reimagined EPC could highlight these benefits, fostering greater consumer engagement and investment.
Introducing Logbooks for Lifelong Engagement
Property logbooks could complement EPCs by documenting a building’s energy history and tracking retrofitting activities. These logbooks would serve as a repository of long-term energy performance data, helping homeowners demonstrate improvements and facilitating green financing by reducing lender risk.
EPC reform and behavioural inertia
For the decarbonisation of the UK stock no one can be left behind meaning EPC data coverage needs to be increased across all properties in the UK. Any change to the EPC system should have a focus beyond regulations which currently targets the Private Rented Sector (PRS) alone. Change should focus on increasing access to EPCs across the UK by maintaining a low cost model so that EPCs are accessible to all property owners and EPCs are not performed solely due to compliance.
Managing Director of mortgages and member of the Sustainability Committee Lenders at Paragon Bank, Louisa Sedgwick said that “lenders, including ourselves, have been encouraging landlords to purchase more energy-efficient homes through preferential pricing. The sector has made significant strides over the past decade, and it is crucial to maintain this positive momentum. EPC reform which focuses on high-quality, dynamic, and engaging energy efficiency data has the potential to support the retrofit revolution needed to decarbonise UK housing stock.”
Case Study: The Perseus Programme
The Perseus programme, developed by B4NZ and Icebreaker One, demonstrates how automated data can transform energy performance assessments. By standardising energy usage reporting, Perseus supports EPC reform goals, ensuring assessments reflect real consumption rather than static assumptions.
Adopting an “open energy” framework—akin to open banking—would allow homeowners to securely share live energy data with financial institutions and retrofit providers. This would enable tailored financing solutions, better decarbonisation strategies, and more effective energy efficiency upgrades.
With real consumption data embedded into EPCs, assessments become more accurate and relevant for both consumers and financial institutions. This shift supports smarter financing decisions, increased investment in energy efficiency, and a more transparent property market.
Looking Ahead: The Path Forward for EPC Reform
EPC reform is not just a technical necessity but a strategic imperative to unlock green finance, empower consumers, and drive retrofit adoption at scale. By integrating dynamic data, improving accessibility, and enhancing consumer engagement, EPCs can become a cornerstone of the UK’s net-zero ambitions.
Policymakers, financial institutions, and innovators must collaborate to implement these reforms, ensuring that EPCs evolve into tools that are fit for purpose in a rapidly changing world. Only then can the UK achieve its ambitious climate goals and secure a sustainable future for its built environment.
B4NZ launched a programme of work to reform EPCs with the aim of ensuring that their reform becomes a priority on the political agenda. We are currently working with our members and partners to submit a response to the EPC reform consultation, which is closing on the 26th of February. We are leading the way on ambitious reform plans and driving market consensus to create a more effective and future-proof energy performance framework. Contact us to find out more about it as well as the Perseus Programme.
Contact:
Elena Pérez Celis
Head of Policy & Public Affairs
elena.perezcelis@b4nz.co.uk
