Atom bank, the UK’s digital banking platform, released research which highlights a knowledge gap among UK homeowners when it comes to Energy Performance Certificates (EPCs) and the cost of retrofitting.
The data reveals that over half (53%) of homeowners are “unaware of their home’s EPC rating, and three fifths (62%) admitted to having a low or no understanding of the system.”
Despite this, the majority (68%) of homeowners still think improving EPC ratings is a worthwhile investment, “recognizing the potential to save on energy bills and improve the value of their property.”
An EPC states how energy efficient a property is, and you “must have one when you’re selling, renting or building a property.”
The certification is valid for 10 years and contains information about a property’s energy use and typical energy costs, as well as “steps to improve a property’s energy efficiency and save money.”
Lower rated buildings are less energy efficient, leading to “higher heating demand, increased energy usage, and elevated costs.”
The majority of homes in the UK are rated EPC D, with “annual energy bills averaging £2,471, £723 more per year compared to EPC C rated homes.”
Retrofitting – the process of updating a building with new features or technology to improve its “energy efficiency and sustainability – can boost property values by an average of 12%.”
This means homeowners benefit not only “from lower energy bills, but also long-term increases in property value.”
However, despite the potential cost savings, Atom’s research found “that less than half (44%) of homeowners have undertaken or plan to undertake retrofitting, citing the upfront cost as a major barrier.”
This is “no surprise,” given the majority of homeowners (63%) believe that making improvements to their home “through retrofitting would cost over £25,000.”
The Government has recognized this issue as it considers plans to subsidize the cost of fitting solar panels and batteries “for millions of homeowners, as part of its ‘Warm Homes Plan’.”
While 29 million British homes need retrofitting by 2050, homeowners struggle to find “clear information about their EPC rating and improvement options.”
This lack of accessible information often leads to an “assumption of high costs, hindering retrofitting efforts.”
For instance, for the many homeowners in the UK who may be looking to move from an EPC D to a C, Atom’s retrofit tool “indicated that this could actually be done for as little as £1,500, a 94% reduction from the £25,000 many assume it might cost.”
To address the challenges and misconceptions around EPC ratings, Atom has partnered “with data firm Kamma to launch a Retrofit Explorer tool.”
The tool helps homeowners to better understand their current EPC rating and offers a tailored plan for “how it can be improved through retrofitting or other means.”
Once the plan has been generated, the tool then “suggests local tradesmen who can carry out the work.”
Atom’s research shows that a large number (44%) of homeowners would be more likely to “retrofit their home if provided with a tailored plan and supplier suggestions, highlighting the need for better resources and guidance.”
Unlike standard EPC information, the tool “generates personalized retrofitting recommendations based on individual property needs.”
Homeowners can adjust their plan based on their budget, “allowing them to lower the costs of the retrofitting work by as much as 67% when compared to standard suggested EPC certificate improvements alone.”
It provides estimates of energy savings achievable “through recommended upgrades so homeowners can weigh up the benefit of the upgrades.”
Edward Twiddy, Director of ESG at Atom bank, comments:
“Millions of homes could benefit from retrofitting, yet EPC ratings and the associated costs are widely misunderstood by homeowners. Part of the issue is that there is a current lack of information and guidance available on how to make improvements, which promotes inertia. As many of us face sub-zero temperatures, January is the perfect time for homeowners to consider how retrofitting can help them keep their homes warm while cutting energy costs.”
They added:
“The launch of our new Retrofit Explorer tool makes it easy for homeowners to put together a tailored plan and for a relatively small amount of money they could save themselves hundreds of pounds a year in energy costs. Given that retrofitting homes to improve efficiency is a key part of the Government’s plan to achieve the UK’s net-zero goals, we think tools like this will have an important role to play in helping homeowners on this journey.”
As part of its commitment to sustainability, which coincides with the launch of the Retrofit Explorer tool, Atom has released its 2023/2024 Carbon Report.
Releasing the Report for the third year, Atom announced a “12% reduction year on year for CO2 equivalent per full time employee (FTE) for all of the bank’s 504 employees.”
For the first time this year, Atom has also reported on its funded emissions, covering both “residential and commercial mortgages, and set its ambitious target to be climate positive by 2035.”