Carbon factors and why getting off gas will boost your EPC rating
Carbon factors are crucial when considering older non-domestic Energy Performance Certificate (EPC) ratings, particularly in light of changes occurring in 2025. Despite EPCs being valid for 10 years, any pre-June 2022 EPC rating (pre-February 2023 in Wales) is now considered outdated. Surprisingly, your non-domestic building's EPC rating might improve without any action on your part, especially given the likely Minimum Energy Efficiency Standards (MEES) target of a B rating by 2030 or soon after.
The key to potential EPC rating improvements lies in the main heating fuel of your building. Each fuel type has an associated carbon factor per kWh. Previously, electricity was viewed unfavourably with a carbon factor approximately 2.5 times worse than mains gas. This was due to the UK's heavy reliance on fossil fuels for electricity production, which was inefficient with significant losses through the grid.
These EPC carbon factors were last updated with the 2013 version of Part L of the Building Regulations. Since then, the UK has made strides in renewable energy, significantly 'greening up' the grid electricity supply. As a result, the carbon factors have been updated to show a substantial improvement, now ranging from 20 to 25% less carbon per kWh compared to mains gas (though this varies monthly in the current version).
The impact on EPC ratings and which buildings benefit is notable. In England and Wales, when an EPC is calculated, the actual building is compared against a reference building always heated by gas. Previously, an electrically heated building powered by 'high carbon mains electricity' was compared against the cleaner gas heating of the reference building, resulting in a poorer rating.
However, with the recent change, that same electrically heated building is now compared against the cleaner electricity of the reference gas heating, resulting in an improved rating. The extent of improvement varies, but if your non-domestic building is heated by electricity, whether through panel heaters or air conditioning, it is likely to have a better rating now than before June 2022. Unfortunately, the flip side is that gas-heated buildings are likely to see worse ratings due to other changes in the methodology.
Looking ahead to 2025 and the next version of Part L (Future Building Standards), the carbon factors will change again. There will be another significant reduction for electricity, down to 0.086 kgCO2/kWh from 0.519 kgCO2/kWh before June 2022 – an impressive reduction of 83.4%.
Considering these changes, electrically heated buildings are poised for another rating boost. Therefore, if your EPC rating is a priority, it might be wise to start planning to transition away from gas.