Energy Performance of Buildings (Scotland) Regulations 2025: stock model research

7 Appendix: preliminary additional Scottish HEM wrapper ratings and indicators

We were able to calculate a Heat Retention Rating for the large majority of properties in the SHCS dataset, as this applies a standardised heating and hot water system to eliminate the impact of varying heating hours and performance differences between systems on the space heating demand. However, for the other ratings and metrics output by the wrapper, it was not possible to calculate results for around 1,000 properties (approximately 8% of the weighted dataset), as HEM is currently very limited in the range of heating systems and fuels it supports. Therefore, the results in this Appendix may not be taken as properly representative of Scotland’s entire housing stock. We expect that rural areas will be particularly under-represented as they are more likely to use less common systems such as open fires, solid fuel stoves and range cookers; and be off the gas grid.

In addition to the HRR, HEM will produce several other metrics. The early version of the HEM calculation engine used for this analysis was in continual development but at present it produces:

• Energy Cost Rating (ECR): essentially a nominal fuel bill cost per m² to replace the 1-100+ SAP rating. This is more transparent than the 1-100+-type Energy Cost Rating but will vary over time with fuel inflation, which may result in issues when comparing values over time.
• Combined Rating Score: a weighted combination of cost (30%) and CO₂ (70%) per kWh of heat delivered scores. These essentially describe the heating system but the weightings are arbitrary, and it is not very transparent. Note also that the CO₂ component includes only direct emissions, so emissions from community heating and electricity are excluded.
• Energy Use Intensity: kWh of fuel per m² per year, which includes unregulated energy use.

At present some outputs including secondary indicators such as CO₂/m²/yr is not produced.

These metrics are considered in Section 6: HEM Results.

7.1 Energy Cost Rating

The Energy Cost Rating generated by the wrapper is calculated by dividing the annual energy cost by the floor area of the property, using the Scottish EPC tariffs for the unit cost of each fuel.

For the reasons given in the section introduction the above data cannot be weighted, with each point representing one property from the dataset. However, the data can still be presented and analysed for patterns.

As expected, there is a negative correlation between the two metrics, however the spread of the dataset shows that there are many properties where the relationship between the metrics departs significantly from the expected line of best fit. We propose three major reasons for this which are discussed in the following paragraphs.

If we limit our view to, for example, mains gas boilers, we see a much stronger correlation between the Energy Cost Rating (“SAP rating”) calculated under RdSAP 9.94, and the Energy Cost Metric calculated using the Scottish EPC wrapper (Figure 4). Part of the weak correlation can therefore be explained by the change in methodologies used to model different heating systems under SAP and HEM.

A further part of this lack of correlation can be explained by the differing fuel price ratios between RdSAP and the Scottish EPC wrapper. Figure 5 below shows the annual energy costs plotted for each property as calculated using the Scottish EPC fuel tariffs, against those calculated using RdSAP 10 tariffs. We see clear separate trendlines, representing the relative differences in unit prices between the old and new tariffs.

Finally, the metrics themselves are not directly comparable. The Energy Cost Metric produced by the Scottish EPC wrapper is a simple, and arguably more transparent, calculation of energy cost per unit floor area, whereas the ECR calculated by SAP is adjusted to fit a nominal 0-100+ scale following the equations set out in Section 13 of the SAP specification.

7.2 Heating system ratings and metrics

Four “sub-ratings” are output by the Scottish EPC wrapper that represent the performance of the heating system: efficiency, cost, emissions, and a rating combining cost and emissions.

7.2.1 Space Heating Efficiency Sub-Rating

The overall efficiency of the space heating system is calculated by dividing the total heat generated by the energy used to produce that heat. This is then used to derive a rating from A to G, where an A rating represents an efficiency of 200%+ (i.e. a heat pump), and a C rating represents an efficiency of 100%+ (i.e. direct electric heating). Combustion appliances can therefore only receive an efficiency rating of D or below.

The majority of properties in the SHCS dataset are heated by gas boilers, which seldom exceed 90% efficiency, therefore most properties receive an efficiency rating of D or below.

7.2.2 Space Heating Cost Sub-Rating

The cost sub-rating is calculated as the cost for delivering one kWh of heat, rather than the cost of one unit of fuel, so does account for the efficiency of the heating system.

Again, with the majority of homes heated by mains gas boilers, most receive a B rating. Most community-heated properties receive an A rating due to the lower unit costs provided in the Scottish EPC tariffs. Most properties with a heat pump fall into B or C, and virtually all properties heated by direct electric heating receive a G rating.

7.2.3 Space Heating Emissions Sub-Rating

Similarly to the cost sub-rating, the emissions sub-rating is calculated as the CO2e emitted by generating one kWh of heat, so too accounts for the efficiency of the heating system. It is notable that these only consider direct emissions (Scope 1), so electricity and community heating systems are taken as generating zero emissions at the point of use.

Gas-heated properties generally therefore fall into band D, and electrically- and community-heated properties into band A.

Aside from the combined sub-rating, this is currently the only emissions-based metric output by the Scottish EPC wrapper. One downside of this is that it is purely based on the characteristics of the heating system. Installing retrofit measures such as insulation would reduce the heating demand of the property and would consequently reduce overall emissions too. However, this improvement would not be reflected in this metric.

There are two cost metrics output by the wrapper: one per m² of floor area, which is affected by the fabric of the property and thus would be improved by installing insulation; and one per kWh of heat delivered, which would not. We would therefore suggest including a similar second emissions metric in the EPC, namely the emissions per unit of floor area, which would be improved by installing fabric measures or by otherwise reducing energy demand.

7.2.4 Space Heating Combined Sub-Rating

A combined sub-rating for the space heating system is derived by combining the cost and emissions ratings into one overall rating. As of the latest version of the EPC wrapper (4^th September 2025), this is weighted to 70% of the emissions rating, and 30% of the cost rating.

As such, the distribution of properties across the bands closely follows that of the emissions rating, with a small contribution from the cost rating.

As the weightings can be adjusted arbitrarily, we consider this combined rating to be less transparent than presenting each rating separately.