What is an energy performance guarantee (EPG)?
An energy performance guarantee (EPG) is a contractual arrangement in which a builder, installer or energy service provider guarantees that a building will not exceed a pre-agreed energy consumption after delivery. If the agreed consumption is exceeded, the provider must compensate.
How does an EPG work?
The EPG is set out in a performance contract with measurable agreements:
- Target consumption — for example 30 kWh/m²/year primary energy
- Measurement period — usually 1 to 5 years
- Measurement method — fixed meters, comparable user profiles, weather correction
- Penalty or bonus — compensation if exceeded, bonus if outperformed
- User behaviour — usually adjusted via standard profiles
Applications
Where is EPG used?
- Net-zero renovations — for example in social housing
- Passive houses — to guarantee the extremely low energy demand
- Non-residential buildings — performance contracts with ESCOs
- New-build projects — as a quality assurance to buyer or investor
Types of EPG
- Full performance contract — provider takes installation and operation responsibility
- Maintenance EPG — combined with service and maintenance contract
- Renovation EPG — for roof insulation, facade insulation, system replacement
- ESCO contract — Energy Service Company finances and guarantees
Benefits
- Certainty — resident or owner receives a guaranteed low bill
- Quality — provider is motivated to careful execution
- Financeability — banks more readily accept lower running costs
- Lifecycle focus — shifts from build cost to total cost of ownership
Risks
- User behaviour — deviating behaviour can lead to disputes
- Measurement accuracy — sub-metering and weather correction are critical
- Term — longer contracts mean longer risk exposure for the provider
Related terms
- NZEB
- Net-zero energy
- ESCO
- Passive house
- Performance contract
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