DECC-Energy Performance of Housing Stock Research

The Scottish Government has legally committed to reach net zero by 2045 for the benefit of our environment, people, and prosperity and is committed to taking the required action. We have confirmed in the 2024 to 2025 Programme for Government that tackling the climate emergency is a priority. To meet net zero, transformation will be required across all sectors of our economy and society, including from our homes and places of work. Heating Scotland’s buildings accounts for 20% of emissions – the third largest cause of greenhouse gas emissions in Scotland – and therefore reducing emissions from this sector is vital to reaching the Government’s ambition. Energy Performance Certificates (EPCs) are being reformed this year, with new regulations due to be laid in Parliament in September. When these regulations come into force in autumn 2026, this will mean that the ratings shown on a domestic EPC will be different to the current ones. The new ‘headline’ rating will be called the Heat Retention Rating (HRR) and will demonstrate the fabric efficiency of the home or building. The new EPC will also have a new Heating System Type Rating (HSTR) showing whether the installed heating system is polluting, hybrid or clean, its emissions and efficiency. We expect that Parliament will want to understand the performance of the stock against the new ratings – in particular the numbers of properties (and their tenures) falling into the new Heat Retention Rating bandings (A-G) from day one. The objective of this work is to provide an analysis of the Scottish housing stock’s performance in each of the new EPC ratings set out above, using the Scottish EPC wrapper and HEM. This includes how homes would be rated in the new EPC ratings compared with how they are rated in the current EPC system, and then also how energy efficiency improvements might impact ratings across types of homes and in different sectors.