EPC Reform: Non-Domestic edition

With all the recent talk about EPC Reform and new targets for residential buildings, you’d be forgiven for thinking, once again, that non-domestic buildings had been forgotten about.

But that’s not the case. We have new commercial EPC targets on the way in both England and Wales. (Scotland changes in separate post below).

All large, non-residential buildings in England and Wales will need to comply with new EPC targets from 2031.

From 2031, any privately rented non-residential building larger than 1,000sqm must achieve a B rating or better.

Smaller units will continue to keep the current target: Achieve an E rating or better.

This rule applies to both new-build and existing properties, and will be triggered when a new tenancy agreement or a new EPC is created.

https://www.gov.uk/government/consultations/non-domestic-private-rented-sector-minimum-energy-efficiency-standards-epc-b-implementation/outcome/minimum-energy-efficiency-standards-mees-in-the-non-domestic-private-rented-sector-interim-response

A previous Government roadmap that suggested a requirement for C ratings from 2027 is not going ahead.

These changes, pending Parliament approval, will be implemented through to the Minimum Energy Efficiency Standards (MEES) Act.

What does this mean in reality?

SBEM EPCs are calculated using a different metric to residential.

The A-G rating is a measurement of how much CO2 is created by running the building’s lighting, heating, hot water, cooling and ventilation systems.

And, unlike in the residential sector, which is about to transition to a brand-new EPC format with the Home Energy Model, there are no plans currently to put SBEM assessors through the same inconvenience.

Landlords of buildings which fall short of the required EPC targets will be expected to improve the energy performance of their buildings, providing it is economically and practically feasible to do so.

The big-hitters for improving the EPC are to ditch fossil fuel heating systems, make sure lighting is highly efficient, and install PV to generate electricity.

The EPC assessor will provide specific recommendations for the best approach to take depending on the building design and usage.

Within MEES, various exemptions currently apply, and that will still be the case after these changes come in.

Landlords can check required improvements against installation costs and building practicalities, and will be able to apply for an exemption if the EPC can’t reasonably be upgraded to a B rating.

These changes may not kick-in for five years, but just like all the other regs updates that are working their way through the system, it will sneak up on us before we realise!