Understanding the costs and savings on your EPC recommendations

On your home energy performance certificate (EPC) you may find a list of recommendations for energy saving measures you can make. For each one, there is a range given for ‘typical’ installation cost and a value for ‘typical’ annual savings. However, looking at a sample of EPCs I was shocked to find that the ‘typical’ cost of each measure is the same regardless of the size or type of house. On the other hand, the savings figure does vary in a plausible fashion. 

For example, assuming you have cavity walls that are not filled it might say cavity wall insulation (CWI) will cost £500 to £1,500 to install and will save £90/year, implying a payback time of five to fifteen years. Five years is quite good but fifteen is not so good so this is not very helpful. This EPC was for a semi-detached house and looking at Checkatrade I see that the typical cost for CWI for a semi-detached house is £800 to £1,200. That gives a payback time of nine to thirteen years. That is more usefully precise – but is it accurate?

In this post I explore the meaning of these figures in more detail and compare the installation costs with on the EPC with those from Checkatrade or Energy Saving Trust.

The ranges given for installation costs have not changed since 2016

I have downloaded a sample of EPCs from 2016 through September 2023. Each EPC has a lodgement date and the cost of each measure is exactly the same for all homes and over all that time. One would have thought inflation would have had an impact – the Bank of England inflation calculator suggests average prices have increased 30% since 2016. I looked at seven different measures.

For insulating lofts and suspended floors, the installation cost seems to assume DIY

For loft insulation, suspended floor insulation and draught proofing, the EPC cost range is roughly half the range from the other sources. It seems likely that the EPC is giving costs for a DIY installation as these measures are fairly simple DIY jobs.

Also, for draught proofing the scope of the job is unclear because although the text on the public EPC says ‘Draught proofing’ the summary file I downloaded from https://epc.opendatacommunities.org/ indicates ‘Draughtproof single-glazed windows’.

Measure	EPC cost (£)	EST cost (£)  (Semi-D)	Checkatrade (£) (Semi-D)
Loft insulation	100-350		600-1,000
Suspended floor insulation	800-1,200	-	1,500-3,000
Draught proofing	80-120	250
External Wall Insulation	4,000-14,000	12,000	10,000-12,500
Internal Wall Insulation	4,000-14,000	7,500	8,000-1,000
Cavity Wall Insulation	500-1,500	2,700	800-1,200
Solid floor insulation	4,000-6,000	-	2,000-4,000

For wall insulation the EPC costs are surprisingly consistent with Checkatrade

For external wall insulation, internal wall insulation and cavity wall insulation, the cost range from Checkatrade (for a semi-detached home) is comfortably within the range on the EPC. This is also true for the Energy Saving Trust estimate except for Cavity wall insulation where the EST estimate is higher.

Costs for mid-terrace homes will be at the low end; detached will be at the high end.

Mid terrace homes are often smaller and have less external wall area than a semi-detached so you can expect costs to be towards the low end of the range on the EPC. Detached homes have more wall area and are often larger so these will have costs at the higher end.

Solid wall insulation costs are very variable depending on shapes and attachments

In practice, the cost of external and internal wall insulation is very variable, depending on the complexity of the walls and the number of things attached to them. Gutters, drain pipes, vents and meter cupboards get in the way on the outside while radiators, light switches, plug sockets, fixed shelving and coving etc. get in the way on the inside. Windows get in the way both sides. External wall insulation may mean extending roof eaves too. Refixing attachments and adjusting round fixtures is a fiddly job and costs can mount up alarmingly.

Solid floor insulation is very rare as the payback times are very long

For solid floor insulation, the cost on the EPC is considerably higher than that given on Checkatrade. This is an unusual measure (with a typical payback time of the order of 100 years) so I doubt there are many example installations. 

Annual savings are best interpreted relative to the estimated heating bill

As for the accuracy of the reported savings, it seems likely to me that this has been calculated based on the area that would be treated and the price of energy that is used in the estimated bills part of the EPC. The trends are plausible – higher savings in larger homes and, in the case of loft insulation, larger savings where there is less insulation in the first place. As for the actual savings you will get, this depends on how much you heat your home (the EPC assumes a standard heating pattern) and of course the energy price at the time. I suggest that you would improve accuracy by calculating the savings as a percentage of the EPC estimate of your heating bill and then applying that to your actual bill.

Efficiency improvements reduce the savings from insulation

You also need to remember that the savings are calculated presuming the order of recommendations as given. Order does not make much difference if all the measures are reducing heat loss (insulation, draught proofing, improved windows). However, if you improve the heating efficiency or controls, then this reduces the savings from the heat loss reductions listed before. If you skip the heat loss reductions, the efficiency savings will increase.

In summary

The ‘typical’ cost ranges for recommended energy saving measures on your EPC are ‘typical’ of all homes, not just homes like yours. This is not very useful, although you can improve the estimate somewhat by considering the size and type of your house. It is likely the middle of the range applies to a 3-bed semi-detached home.

For loft insulation, suspended floor insulation and possibly draught proofing, the ‘typical’ cost appears to be for DIY.

The ‘typical’ annual savings are more accurate than the costs, as they take into account the area of your home that would be treated and, for loft insulation, how much insulation you had before. However, since energy prices have changed a great deal and your personal heating patterns can make a big difference, you are better off calculating the savings as a proportion of the estimated total energy bill.