Accelerating home renovations: How Scone's EPC calculator can assist homeowners as banks strive to meet EU climate targets
Couple Holding Paint Rollers © Blue Bird / Pexels
Homeowners need to renovate their homes faster to meet the EU's ambitious climate targets. To align with these goals, the rate of energy-efficient renovations must increase sixfold by 2030. However, homeowners need help with their efforts to upgrade their properties.
Firstly, there is confusion about where to begin. Many homeowners are unsure which renovations to prioritise and whom to trust for reliable advice and services. This uncertainty often leads to inaction, delaying crucial improvements.
Secondly, homeowners frequently overlook the long-term benefits of renovations. Energy-efficient upgrades enhance property values and lead to substantial savings on future energy bills. By addressing these challenges and emphasizing home renovations' financial and environmental advantages, we can make meaningful progress toward achieving the EU's climate targets.
By not undertaking energy renovations, homeowners are missing the opportunity to improve their Energy Performance Certificate (EPC) ratings. This can negatively impact their property's value and its marketability for sale or rent.
With stringent energy label requirements, homes with poor energy ratings depreciate while energy-efficient properties appreciate. For example, in Flanders, upgrading from an E to a B label can boost a home’s value by an average of 11%. For a home valued at €200.000, this means an added value of €21.800. This trend indicates that the value gap between homes with good and poor energy ratings will continue to grow. Additionally, homes with an EPC label of A+, A, or B sell up to 25 days faster.
Furthermore, an EPC showing the current energy label is mandatory when selling or renting a property. Since January 1, 2023, residential buildings have been subject to a renovation obligation. All homes purchased from 2023 with an E or F label must be renovated to at least a D label within five years of purchase (and other transfers) in the Flanders region. Starting in 2040, newly purchased properties must achieve at least an A label within five years. Similar trends are seen in other regions and countries.
When homeowners lack the confidence to renovate their homes for better energy efficiency, it affects the banks that hold their mortgages. This impacts banks’ mortgage portfolios in several ways:
- Missed growth potential: Reduced home renovations decrease the demand for loans, negatively affecting the bank’s profitability and growth.
- Sustainability goals at risk: The slow adoption of deep renovations hinders compliance with regulations such as CSRD and jeopardizes the bank’s internal sustainability targets.
- Mortgage portfolio risk: Low EPC scores can lead to property devaluation, resulting in increased loss given default (LGD) values and higher credit risk.
To address the need for more renovations and solve problems for both homeowners and banks, Scone has developed an EPC calculator for the bank's customers. By entering details about their home, combined with publicly available data, customers receive an estimated EPC rating. While this estimate is not an official EPC, it provides a helpful starting point.
Customers also receive an optimised renovation path to improve their rating. This path lists renovations in the most efficient order, saving time and money. Additionally, the report includes estimated renovation costs and tips on available subsidies to help finance the improvements.
Scone EPC calculator & renovation path. End-to-end integrated platform for renovation activation and climate risk analytics. © Scone
Homeowners benefit from:
- Actionable insights: Provides homeowners with clear and actionable steps to improve their home's energy performance
- A more energy-efficient home: Actively guides customers to enhance their home's energy efficiency.
Banks benefit from:
- Growth opportunities: Facilitates growth in underwriting businesses by leveraging targeted data on energy performance.
- Data provision: Enables seamless reporting of ESG data by providing detailed risk and energy performance data. The tool allows CSRD and aggregated internal reporting.
- Climate risk mitigation: Empowers banks with detailed data to mitigate ECB climate risks and capital requirements.
Mediahuis, a prominent European media powerhouse with a rich portfolio of newspapers, digital platforms, and broadcasting assets, has leveraged the Scone EPC Calculator to guide the renovation efforts for two of its flagship publications: De Standaard and Het Belang van Limburg. Since its launch, the Scone EPC Calculator has served over 30,000 readers, delivering invaluable insights into home renovations.
Of the 21,000 users who received their personalised renovation pathways, here’s what the data reveals:
- Total estimated renovation cost: €846 million
- Major energy performance improvements are observed, with insulating walls and roofs yielding the highest performance gains. This is followed by the installation of photovoltaic (PV) systems and updated heating solutions.
- Energy consumption reduction: 298.4 million kWh/year
- Decrease in CO₂ emissions: 74 million kg/year
- Energy Cost savings: €34.5 million annually
Are you ready to transform homes, gather essential data, and minimize climate risk by assisting clients with home renovations?
The Scone EPC Calculator is available as a standalone web app and a customizable white-label integration. To explore how you can integrate this innovative solution into your services, send us a message through our contact form.
