In a bid to cut the amount of greenhouse gas produced by buildings, all housing being sold or rented will need to be officially rated for its energy efficiency from 2009.

In 2004 the domestic sector was responsible for about 30% of the total UK energy use and about 27% of carbon dioxide emissions, the main greenhouse gas, on an end user basis. That energy is used by a wide range of different appliances in the home with around 60% used for heating, 20% for hot water & remainder for lighting and appliances.

A range of different approaches is required to tackle domestic energy efficiency effectively. These include the provision of information and advice to consumers such as reduced VAT on energy saving materials, regulations such as minimum standards for buildings and appliances.

There are many potential barriers to the take-up of energy efficiency measures in the home. People can be reluctant to introduce energy efficiency measures, even when they are demonstrably cost effective, for a variety of reasons lack of awareness & information, lack of capital for the up front investment required or other spending priorities.

Facing a potentially harmful global climate change, the UK government is committed to the Kyoto Protocol, an international agreement to reduce emissions of greenhouse gases, including those associated with the burning of fossil fuels. All businesses have a part to play in helping the UK meet its binding target of a 12% reduction in emissions. Further energy management legislation is being introduced at a European and national level.

A new European Union directive means that after 2008 all homes that are rented out or sold will require a certificate showing an energy rating for the property, information on heating and lighting costs and recommendations for cost effective improvements.

The implications of the directive On the Energy Performance of Buildings for housing association and council homes are significant. Energy certificates will have to be issued for all new tenancies, right to buy/acquire sales and stock transfers, although there are likely to be some exemptions, such as buildings scheduled for demolition.

The rental market poses particular problems, as there is little incentive for the landlord to invest in energy efficiency since the tenant normally pays the energy bill. The idea is that if prospective tenants know a property will be expensive to heat and light, the landlord will either be forced to drop the rent or improve its energy efficiency.

UK building regulations have included a standard assessment procedure for defining the energy efficiency of new homes for some years. The calculation is like an equation: on one side, the use of energy – such as the consumption of electricity and fossil fuel – and on the other, the level of energy retained within the property through efficient construction methods such as roof and wall insulation, and double glazing.

Under the new rules, an energy certificate will be issued for existing rented stock at the point when the home is re-let. Under the right to buy, certificates will be required the first time the property is purchased. Private sales will require an energy efficiency assessment as part of the home information pack, introduced in the Housing Act.

Certificates will be valid for ten years but the exact content and format is still to be decided. The Building Research Establishment has been commissioned by the government to devise the rules for how the certificate will be produced and the information it will contain.

Once the directive has been rolled out, non-compliance may involve fixed fines for landlords, which are likely to increase over time. Fines may be issued through local authorities – probably through trading standards departments.

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