Innovative EPCs features in Denmark: testing results and replication potential

29/07/2022

The focus of the Horizon 2020 project X-tendo is the further development of energy performance certificate (EPCs) schemes in EU Member States. After analysing the theoretical background, the project focused on testing its innovative features in concrete implementation projects. This series of blog post will help summarise the testing in each of the X-tendo 9 countries to understand the practical viability and the challenges in the implementation of the developed ideas and materials.

Depending on the feature, the X-tendo partners performed different types of tests: In-building tests apply the feature materials on concrete buildings, user tests consist of understanding the user perception related to the developed materials and ideas, system tests intend to understand the application of feature ideas and materials in related systems like EPC database systems.

Features and buildings tested in Denmark

In Denmark, the X-tendo’s partner DEA, the Danish Energy Agency tested four features to enhance current energy performance certificates: EPC databases, enhanced recommendations, financing options and one-stop shops.

The features were tested on various buildings and with different tests: EPC databases with system tests, enhanced recommendations with in-building and system testing on 10 single-family buildings, financing options and one-stop shops with user tests consisting of interviews with houseowners.

Summary of results from the testing

EPC databases

In this direction, the proposed EPC database methodology focuses on the development and implementation of routines, which are able to identify outliers and to validate EPC data. This consists of a four-step approach, starting right after the EPC is logged in the database:

• First check: “gross” threshold value check.
• Second check: “narrow” threshold value check.
• EPC flagging: indication of inconsistencies per EPC.
• Feedback loop to energy auditor: identify and indicate commonly made mistakes and communicate to energy auditor training courses.

The Danish control of EPC’s is based on a risk-based approach combined with validations on the input parameters, which corresponds to the developed methodology from the project. Therefore, the test was an analysis of the results from the risk-based control in Denmark in 2019. As far as possible, the analysis was designed to learn from the control, provided by a user feedback-loop, so the new knowledge could be implemented in educational programs for EPC consultants or in the development of new validations of input parameters.

Denmark had already implemented a risk-based control scheme which means that the digitalization strategy was already at a state which meant that it did not make sense to implement database quality checks in the project. Therefore, a new scope for testing in Denmark was to test the feedback loop and provide lessons learned from the risk-based control in Denmark, which resulted in these conclusions:

• Increase the information on the role of the EPC consultants in performing EPCs for new and existing buildings e.g. through webinars or technical newsletters.
• Regular evaluation of education of EPC consultants and upskilling opportunities.
• More validation checks of data to avoid errors and mistakes (e.g. digital and automatic control of input parameters).

Enhanced recommendations

 The testing for this feature contained three phases:

1. Data extraction from existing EPC’s.
2. Data transfer from the data extraction to the calculation software developed by TU Wien.
3. Comparison between calculation software and existing EPC.

The testing can evaluate the need for standard recommendations based on the data in the building. In Denmark, the EPC consultants are already imposed to recommend renovation approaches, but it is possible to estimate if the calculation tool can support the EPC consultant when performing the EPC.

On its usefulness and considering the above, DEA stated: ‘The feature and the product in itself is quite easy to implement, and it would be possible to integrate it fairly easy in the EPC issuing programs in Denmark. But it would be as a support tool. In Denmark the EPC consultant are already responsible for delivering renovation suggestions in the EPC, which would be categorised as highly tailored. But sometimes building parts could be forgotten or maybe the EPC consultant has not thought of a specific building part. The tool could then support the EPC consultant in making holistic suggestions for all building parts in the EPC.’

One-stop shops

The one-stop shop in Denmark is called BetterHome, the Danish national consultancy scheme (Voluntary and market-driven system). The BetterHome scheme is an extension to the EPC scheme and can be based on an existing EPC for a building.  The calculations are also performed in the same tool as the EPC’s, to ensure comparability and easy data transfer. The scheme provides counselling through all of the building renovation process, and can support the homeowners through all phases of a renovation. It consists of two market driven services:

1. The BetterHome plan – a screening of the building to give the homeowner an overall overview of expected investments and savings,
2. The BetterHome project – where the consultant helps the homeowner from start to finish, first providing the screening of the building and then leading any commenced renovation project. This service resembles a “one-stop-shop” with the aim of promoting energy savings.

The user testing was done through persons interviews, that had to meet relevant criteria. For example, the plan had to be issued from 2016-2019, the building had to be erected before 1980, the total budget for energy renovation had to be larger than € 13.500 (≈DKK 100.000). From this sample size, 10 persons agreed to participate in the interviews, resulting in 8 homeowners actually participating.

The interview contained questions regarding the entire process around the BetterHome report. Some of the insights show that almost all respondents have bought an older house and therefore needed good advice on where to start or move forward with improvements already started. As for satisfaction with the plan, some homeowners feel that they have been given a better overview of specific renovation options, but also that some others feel that they have not become so much wiser. The greatest satisfaction is expressed among the homeowners who have received the BetterHome plan for free and who at the same time have a larger and elder house.

During the interview, it was also investigated whether the interviewee was missing elements in the BetterHome plan, eg monitoring of water consumption or monitoring of energy consumption. Most participants answered that it could possibly have some interest but, when asked if they were willing to pay an additional fee for this service, they were more reluctant and declined.

Financing options

The interviews on one-stop shops were also used to investigate financial barriers and opportunities in the planning process of energy renovations. In addition to the interviews, there was also a market screening exercise to identify options for financing renovation (other than personal savings) from private banks, and a review of public (including Supplier Obligation based) subsidy options.

This screening showed that all the banks have some kind of mortgage for energy renovations under different names and varying terms and conditions. Most of the products from the banks provide a discount on the loan fee or a lower interest rate. The requirements do not often include public tools as BetterHome report or the EPC, but the banks use a private tool.

From the market screening in the public sector instead, one of the green services (insulation) allows for a tax deduction up to 12.000 DKK/year per person (app. 1600 EUR) on the salary for the craftsmen. Another subsidy program targets residential buildings including conversion to heat pumps, extra insulation of the exterior envelope, new energy windows etc. It turned out that the BetterHome consultancy had only had a minor impact on the renovation process (financial management, budget, and time schedule), and that very few of the homeowners had used the consultant to manage the renovation they had completed.

Replication potential and conclusions

When it comes to the conclusions from the testing, there is a high potential in the digitilization of control for EPC databases has great potential, making it possible to identify potentially faulty EPCs for investigation and improvement. This method reduces time wasted in manually checking that the EPCs are correct. It also has the potential to indicate the worst mistakes in an EPC, meaning that the faults with the greatest impact can be reduced or even eliminated entirely. It is also important to have a working database, where data is organised into tables, and have a combination of two skills: EPC knowledge and Data Statistics knowledge. As for enhanced recommendations, it could be a great supporting tool for the EPC consultant, provided the parameters are based n the country.

One-stop shops and financing options recommendations following the testing in Denmark go hand in hand:

1. Digitilise the BetterHome plan, making the updates easier
2. Link the Energy Label and the BetterHome plan: It is mandatory to acquire an EPC when selling or renting a house. In extension it could be valuable to offer house buyers a BetterHome plan to a favourable price, to show them the energy efficiency potential when the house typically is refinanced and renovated.
3. Offer a discount on the new Energy Label: When performing energy renovations described in the BetterHome plan, it should be possible to update the EPC at a reduced cost.
4. Differentiate between small energy renovations and larger deep renovations.
5. Financing offers must be able to be entered in the BetterHome plan, instead of limiting itself to cost and energy savings, and encouragementsto the homeowner to begin the dialogue with a financial institute.
6. Include key figures to the BetterHome plan to help with the dialogue with the financial institutes. The key numbers and figures could help promote beneficial loan opportunities with energy recommendations.
7. Offer discount on continued and follow-up BetterHome consultancy:
8. Offer a direct discount on the BetterHome plan, as the willingness to pay for the solution was not very high based on the interviews and existing subsidies on the market were not sufficient
9. Adapt the BetterHome plan to facilitate specific offers from craftsmen making it more concrete. An alternative solution could be to offer it as an add-on solution to the existing BetterHome solution.
10. Focus especially on first-time buyers with bad EPCs. With the right information or a discount the first-time buyers could be motivated into accelerate potential future plans of renovating their house.
11. Push Encouragement from the municipality and others.

For more information on testing and recommendations, read the full report Implementation guidelines and replicability potential of the innovative features for the next generation EPCs here