The difference between energy performance contracts and energy performance certificates

The acronym EPC can be used to refer both energy performance contracts and energy performance certificates, whilst both are related to energy use they should not be confused with one another. The former refers to a contractual agreement with a contractor to achieve a certain level of performance after the works are complete, whilst an energy performance certificates refers to a rating between A and G that is required for any building in the UK that is built, sold or rented, with some exceptions.

[edit] Energy Performance Contracts EPC

Energy Performance Contracts are contracts for the implementation of energy saving and renewable energy measures by a contractor, sometimes referred to as an Energy Service Company (ESCo) or EPC provider. They first emerged in the US in the 1970’s and 1980’s and can be appropriate for domestic and commercial properties, but are most often associated with public-sector clients.most commonly include a guarantee from the provider that the specified energy savings will be achieved, and so there is no risk to the client. Less commonly, contracts may adopt a shared savings approach, in which savings are shared on a percentage basis for a pre-agreed period. In this case, the client and the provider are to a certain extent sharing the risk.

Schemes can include financing, often by a third party, but sometimes by the EPC provider, in which the savings generated by the measures implemented should be sufficient to make the repayments required. At the end of the contract, all subsequent savings are kept by the client.

Typically, the energy performance contract or EPC provider will carry out an energy audit of the premises, design the measures it considers will best achieve the required savings, implement the measures and arrange the financing. As a result, EPC providers tend to be large organisations with experience in the sector and with the capability of standing by guarantees for long periods of time (up to 15 years). This might include; energy suppliers, energy consultancies, facilities management companies and large equipment suppliers.

Energy performance contracts or EPC's can be useful in enabling energy efficiency measures to be implemented quickly, with no capital expenditure by the client, and with little risk. However, they have been criticised for being difficult to negotiate, for a lack of transparency in the costs of the measures implemented and because of the lack of low-cost financing. In addition, there are complexities for properties that are leased and when properties are sold, and because EPC’s are such long-term contracts, there are inevitable uncertainties in relation to the future of the energy market, future technologies, changes of use and so on. There are a number of different variations on energy performance contracts, some of which are outlined in the article energy performance contracts on designing Buildings, though it may be appropriate to seek independent advice when negotiating Energy Performance Contracts.

[edit] Energy Performance Certificates EPC

Energy performance certificates or EPC's, set out the energy efficiency rating of buildings from A (most efficient) to G (least efficient) and are valid for 10 years. In England and Wales they are required when buildings are built, sold or rented, if they have a roof and walls and use energy to condition an indoor climate. If a building contains separate units (for example a block of flats), each unit needs an EPC, but they are not required for shared bedsit type accommodation and a number of other specific building types. An EPC contains information about a property’s energy use and typical energy costs and recommendations about how to reduce energy use and save money.

Energy performance certificates or EPC's stem from the Energy Performance of Buildings (England and Wales) Regulations2012 which took effect on January 9 2013, The regulations require that energy performance certificates (EPCs) are produced for certain dwellings and non dwellings. In February 2023 The Climate Change Committee (CCC), published a research document and letter proposing for a reform of domestic EPC rating metrics to support delivery of Net Zero. The key points made were that the current EPC's are poorly suited to their role as an important policy tool, used to define standardsand targets for reducing emissions from homes as EPC rating metrics do not accurately incentivise the energy efficiency and heating solutions required to deliver Net Zero homes. It proposed that rating metrics should be improved, so they are easier to understand, can be compared with actual performance, and enable policies to be better targeted. Proposing four primary metrics, using real-world units, and clear simple names:

• ‘Energy’: Total energy use intensity (kWh/m2/yr)
• ‘Fabric’: Space heating demand intensity (kWh/m2/yr)
• ‘Heating’: Heating system type (categories of heating system, ranked from 1 to 6).
• ‘Cost’: Energy cost intensity (£/m2/yr).

Reforms to EPC rating metrics should be applied alongside wider improvements to the EPC system to improve the quality of assessments and use of data. EPC's could also be expanded to provide information on risks posed by climate change and ways to reduce these.

[edit] Related articles on Designing Buildings

• Energy performance contracts.
• Energy performance certificates.
• Performance contracting.
• Performance contracts.
• Key performance indicators.
• Non-performance.
• Performance bond.
• Performance gap.
• Performance in the construction industry.
• Performance in use of completed buildings.
• Performance management framework.
• Performance specification.
• Performance specified work.
• Post occupancy evaluation.
• Post project review.
• Strategic performance targets.
• Suspension of performance.
• The sustainability of construction works