COP26 - The Heat and Buildings Strategy

How does this actually impact the industry?

The UK is currently moving towards its target of becoming a net zero emissions country by 2050. As part of this process the construction industry is expected to undergo large changes to reduces the carbon emissions from both existing and newbuild properties.

The government released the "Heat and Buildings Strategy" on the 19th of October 2021. This outlines the short-term future for building energy efficiency. The requirements will act as a steppingstone and are expected to undergo further improvements in the future.

This article provides additional information on implementation of strategies, the "Ten Point Plan" and the "Clean Growth Strategy".

The Heat and Buildings Strategy document sets out the below pathway for the Energy Performance Certificate (EPC) rating of existing and new builds as below:

Domestic Properties:

  • 2025: Owner occupied homes to reach a minimum EPC of a D where cost effective, practical, and affordable.

  • 2030: Owner occupied homes to reach a minimum EPC of a C where cost effective, practical, and affordable.

  • 2035: Rented homes to meet an EPC of a C where cost effective, practical, and affordable.

Commercial Properties:

  • 2030: Privately rented commercial buildings to achieve minimum EPC of a B.

How the above is to be enforced and regulated is yet to be seen, previously there have been exceptions made for properties where the cost of upgrades is not feasible, and with the statement of “where cost effective, practical, and affordable” repeated throughout the document. There are likely to be a list of exemptions.

Previously when the Minimum Energy Efficiency Standards (MEES) were introduced for private rented properties, landlords were able to claim a Private Rented Sector (PRS) exemption from improving the EPC rating if the cost of the cheapest improvement option was greater than £3,500.

The document currently places an emphasis on pushing towards the installation of heat pumps, aiming to drive the capital costs down by increasing the demand for heat pumps. The use of hydrogen in the existing gas grid is currently still in discussion. The government have committed to issuing further information regarding the use of hydrogen by 2026.

“Spring 2022” will see the re-introduction of the “Clean Heat Grant”. This will provide households with £5,000 grants when they switch to an air source heat pump or £6,000 when they switch to a ground source heat pump. The grant is intended to replace the Renewable Heat Incentive (RHI). The current RHI scheme closes to new applicants in March 2022.

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