What are Energy Performance Certificates?

Energy Performance Certificates (EPCs) have been introduced by the Energy Performance of Buildings Directive (EPBD) and are currently the main standard tool for assessing a buildings energy performance in the EU. The idea is that the energy consumption of buildings can be compared and that their efficiency becomes a selling argument when selling or renting out a building.

Why is measuring the energy performance of buildings important?

The energy performance of buildings is important for various reasons. First, energy consumption is important for the energy costs of a house or apartment. Second, energy is important for comfort and wellbeing reasons; insulated buildings provide a higher comfort. In addition, the effect that  buildings have on the climate is becoming more important for owners, inhabitants and the financial sector. If an EPC could give some context on energy bills, efficiency and climate impact, this could be very helpful especially when buying or renting a dwelling.

EPCs are issued by trained energy advisors, which follow clear quality criteria and guidelines. Each EPC is valid for 10 years and needs to be renewed thereafter. When selling or renting out a building, an EPC has to be provided to the potential buyer or renter.

What is the status of EPCs in Germany?

Germany introduced two different types of EPCs, which were compliant with EU law. This means that each building can either have an EPC based on its calculated energy performance (Bedarfsausweis), or an EPC based on energy consumption of the last three years (Verbrauchsausweis). This can lead to confusion, especially when comparing two different EPCs, which leads to the fact that two buildings can not be easily compared.

Accordingly, experts recommend that EPCs should be streamlined and provide information on the entire energy performance of a building. This should include whole life carbon, a heating system and potential renovation options for the long term. The German government of Social Democrats (SPD), Free Democrats (FDP) and Greens, which was formed in the fall of 2021, has also promised that the EPC will be upgraded to a digital building logbook, which could incorporate additional features, such as a material passport (which was also anchored in the coalition agreement).

In the future, EPCs could be used for assessing building stock in Germany and for providing subsidies, provided that minimum energy performance standards are introduced (which can be checked based on the information provided by the EPC that provides a color coded scale from A-H). Therefore, a clear and transparent EPC regime is necessary.

What comes next?

The building stock is responsible for 36% of carbon emissions in Germany. Therefore, the reduction of emissions, not only from the heating of buildings, is necessary and long overdue.

With the new German government and increasing awareness on the effect that buildings have on climate change, a larger debate on new buildings, whole life carbon, renewable resources (e.g., wood) and fossil free heating options is underway. This debate is likely to change how new buildings are designed, how older buildings are renovated and see an increased role for EPCs in the process of transitioning to greener building.

The promise from the new government to create a digital building logbook is thus timely and could play a pivotal role: it can be linked with a material passport and the already existing renovation roadmaps (individueller Sanierungsfahrplan), which show how existing buildings can become carbon neutral with a step-by-step renovation plan. The building renovation roadmap could become obligatory for funding or for trigger points (e.g., selling, moving or an inheritance of a building). Minimum energy performance standards could be introduced on the EU level through the revised EPBD, targeting the worst performing buildings.

One of the central questions is who ought to pay for the renovation and the heating switch to make buildings more efficient, which is especially pertinent in the larger German cities, which have a large share of tenants buildings. There are clear obligations for owners and funding plans, however, they need to be implemented to take pressure off of tenants, while making sure that existing buildings are renovated as soon as possible.

The opinions expressed in this text are solely that of the author/s and do not necessarily reflect the views of IPPI and/or its partners.