Energy Performance Certificates for business premises

When you need an Energy Performance Certificate

An Energy Performance Certificate (EPC) rates a building's energy efficiency on a scale from A (most efficient) to G (least efficient). You need a valid EPC whenever you sell, let, or newly construct a commercial building in England or Wales. The certificate must be provided to prospective buyers or tenants and must be obtained before you market the property.

EPCs are produced by accredited energy assessors who inspect the building and assess its construction, heating systems, lighting, insulation, and other factors that affect energy performance. A valid EPC lasts for 10 years from the date of issue.

Failing to provide a valid EPC when required is a civil offence enforced by trading standards. Penalties range from GBP 500 to GBP 5,000 depending on the rateable value of the property.

Minimum Energy Efficiency Standards (MEES)

Since 1 April 2023, the Minimum Energy Efficiency Standard (MEES) applies to all commercial lettings in England and Wales, including existing tenancies that were previously exempt. It is now unlawful for a landlord to let or continue to let a commercial property with an EPC rating below E unless a valid exemption has been registered.

This is a significant compliance obligation for commercial landlords. If your property has an EPC rating of F or G, you must either make energy efficiency improvements to bring it to at least an E rating, or register a valid exemption on the PRS Exemptions Register.

Penalties for MEES non-compliance

Local authority trading standards enforce MEES. Penalties are calculated as a percentage of the property's rateable value:

• Non-compliance for less than 3 months - 10% of rateable value (minimum GBP 500, maximum GBP 5,000)
• Non-compliance for 3 months or more - 20% of rateable value (minimum GBP 500, maximum GBP 150,000)

Penalties can be imposed repeatedly if non-compliance continues. The local authority also publishes details of the breach on the PRS Exemptions Register for at least 12 months.

EPC exemptions and the PRS Exemptions Register

Not all buildings require an EPC, and not all landlords are required to meet the MEES minimum E rating. However, exemptions must be understood precisely - claiming an exemption incorrectly does not protect you from enforcement.

Buildings exempt from EPC requirements

The following building types are exempt from the requirement to have an EPC:

• Listed buildings - where compliance with minimum energy performance requirements would unacceptably alter the building's character or appearance
• Places of worship - buildings used primarily for religious activities
• Temporary buildings - with a planned use of 2 years or less
• Small standalone non-residential buildings - with total useful floor area under 50 square metres
• Certain industrial and agricultural buildings - with low energy demand
• Buildings due for demolition - under a valid planning permission

MEES exemptions for landlords

If you cannot reach an E rating, you may qualify for a MEES exemption:

• Cost cap exemption - you are not required to spend more than GBP 3,500 (including VAT) on energy efficiency improvements. If all relevant improvements would cost more than this, you can register an exemption after making improvements up to the cap.
• Wall insulation exemption - where cavity, external, or internal wall insulation would negatively affect the structure or fabric of the building
• Consent exemption - where you cannot obtain necessary third-party consent (such as planning permission, superior landlord consent, or tenant consent) for improvements
• Devaluation exemption - where an independent surveyor confirms improvements would reduce the property's market value by more than 5%
• New landlord exemption - 6 months from becoming landlord to comply

All MEES exemptions must be registered on the PRS Exemptions Register before you can lawfully let the property below E. Exemptions are valid for 5 years and must be renewed if you continue to let the property.

Display Energy Certificates (DECs)

Public buildings have an additional obligation. If your building is occupied by a public authority and has a total useful floor area over 250 square metres, you must display a Display Energy Certificate (DEC) in a prominent location visible to the public.

• Buildings over 1,000 square metres - DEC valid for 1 year, must be updated annually. An advisory report (valid for 7 years) must also be produced.
• Buildings between 250 and 1,000 square metres - DEC valid for 10 years. An advisory report (valid for 7 years) must also be produced.

DECs differ from EPCs. An EPC rates the building's theoretical energy performance based on its construction. A DEC rates the building's actual energy consumption based on metered data. A building can have a good EPC rating but a poor DEC rating if it is operated inefficiently.

How to improve your EPC rating

If your building has a poor EPC rating, the most cost-effective improvements typically include:

• Lighting upgrades - replacing fluorescent tubes with LED lighting can significantly improve your rating, often at modest cost
• Heating controls - adding or upgrading heating controls, thermostatic radiator valves, and building management systems
• Insulation - loft insulation, cavity wall insulation, or draught-proofing are among the most cost-effective fabric improvements
• Boiler replacement - modern condensing boilers achieve higher efficiency ratings than older non-condensing models
• Window upgrades - replacing single-glazed windows with double glazing improves both U-values and the EPC score

Commission an EPC assessment first to understand your current rating and which improvements will have the greatest impact.