Commercial premises and energy performance
An energy performance certificate (EPC) is legally required if you are selling, renting or undertaking construction on a commercial property in the UK.
Every commercial property must have a valid Commercial Energy Performance certificate (EPC) when it is built leased or sold. Legislation introduced in April 2018 means that all commercial buildings must comply with MEES (Minimum Energy Efficiency Standards) and achieve a minimum “E” rating.
Holding an EPC is a legal requirement under the Energy Performance of Buildings Directive (EPBD). Without an EPC, your building cannot be signed off sold or let. You could also face a fine of up to £5,000.
What is a commercial EPC?
The Commercial EPC is an energy performance certificate, which is especially geared towards a commercial property. It works in the same way that domestic energy performances do and uses the same ratings graph that we see with electrical appliances, with ratings from A the most efficient, to G which is the least energy efficient.
You must have a Commercial EPC if:
- you rent out or sell the premises
- a building under construction is finished
- there are changes to the number of parts used for separate occupation and these changes involve providing or extending fixed heating, air conditioning or mechanical ventilation systems
When must you display a Commercial EPC?
You must display an EPC by fixing it to your commercial building if all these apply:
- the total useful floor area is over 500 square metres
- the building is frequently visited by the public
- an EPC has already been produced for the building’s sale rental or construction
What do I need when a property is about to be advertised for sale or let?
Before a building is put on the market the seller, landlord, managing agent, estate agent and any other third parties must ensure that an EPC has been commissioned before they can market a property for sale or rent. The seller or landlord or a person acting on their behalf must use all reasonable efforts to ensure the EPC is obtained within seven days.
Since early 2013, all sales or lettings advertisements for Commercial Properties must illustrate the EPC rating of the property being advertised within the sales advertisements. There is no requirement to display the full certificate within the advert, but where there is adequate space, the advertisement should show the A-G graph. Where this is not always possible, the advertisement should include the actual EPC rating of the property.
The EPC for the property, and its accompanying recommendation report, must be made available free of charge to a prospective buyer or tenant at the earliest opportunity, and in any event,
- when written information about the building is provided, due to a request by a prospective purchaser
- All advertisements in the commercial media must clearly show the energy rating of the building.
- before a property is viewed.
- A copy of the EPC must also be provided to the successful buyer or the person who takes up the tenancy.
How is a commercial EPC calculated?
The energy rating of a building is a complex calculation which is based on several factors. These factors include:
- the type of construction of the building (including the walls, roofs floors and glazing)
- whether different parts (or zones) of the building are used for different purposes.
- heating, cooling ventilation and hot water systems that are used.
- the lighting used throughout the building and its efficiency.
An EPC Certificate displays the energy efficiency grade of a commercial building.
EPC Certificates are graded on a scale of A-G. The best result you can achieve is an A grade (most efficient) and the lowest being G (least efficient). The rating graph is based upon the labels you see attached to new appliances such as refrigerators and washing machines.
An ‘A’ result has a rating of 0-25. A zero-rating is defined as the performance of the building that has zero net annual CO2 emissions.
Landlords need to ensure that any rental property, both commercial and residential, must have a minimum EPC Certificate rating of E.
A Commercial EPC Certificate must be produced by a qualified Non-Domestic Energy Assessor (NDEA).
How do I find a commercial EPC?
The EPC register is open to anyone looking to gain information about the energy-efficiency of a property. A full report can be retrieved using either a report reference number or the property address. The Register is also known as the Landmark Register.
The EPC register is open to anyone looking to gain information about the energy-efficiency of a property.
How much does a commercial EPC cost?
Due to the detailed level of information required for the data entry, into the accredited Commercial energy performance assessment software programme, the site survey can take anything from a half a day to several days or even weeks on site surveying. The time spent back at the office entering and modelling all the data obtained from the site survey can be 2-3 times it took on site, to do the site survey.
The cost of preparation of a Commercial EPC is related to the type of building, the complexity of the building and the quality of information available. A relatively modern building with current layout drawings (record plans) will be less costly to assess than an older building of similar layout for which no record drawings exist. The size of the building is also important, but a large warehouse is not directly comparable to an office or retail premises of similar size. Due to the wide variation in size and complexity of commercial buildings the survey and data entry, modelling times and calculation times can vary.
The process of producing the information necessary to undertake the calculation is complex and time consuming and the cost of producing an EPC for the simplest of buildings with access being provided to all the areas of the property, would be in the region of several hundred pounds.
How long does a commercial EPC last for?
A commercial EPC is valid for ten years and can be used multiple times during this period. The EPC will expire after ten years and a new EPC, which will be valid for the next ten years should be produced if the property is marketed for sale or rent at this time.
Should you have invested significantly on the energy efficiency of your property which you are now planning to sell, it would be cost effective to have a new EPC produced, before the old one expires, which will confirm the improvements that you have completed to make your property more energy efficient and marketable.
When were commercial EPC’s introduced.
It has been a requirement since 2007 for any property being sold or rented, whether commercial or domestic, to have an energy performance certificate. This is an independently assessed look at the energy performance of a property, examining things like property insulation and effectiveness of the heating to determine how energy efficient the property is.
Over the past ten years the EPC scheme has been subjected to changes and in April 2018 a change was made that specifically affected commercial and domestic properties, which are to be rented out. Having been discussed for numerous years, minimum energy standards came into force meaning that commercial and residential properties with an EPC rating of either F or G cannot be rented out without having had energy efficient changes made to boost their energy performance to an E or above or applying for an exemption under a limited number of grounds.
It is now against the law for your property to be rented out with a rating of F or G. Your property will need to be left empty until the energy rating is improved, it makes sense to have your property assessed as soon as possible so that you can identify the ways in which the energy rating can be boosted.
It is also important to recognise that the minimum standard rating may not stay at E and could be raised even higher in years to come. As such, making some significant changes now to really boost the energy efficiency could save you money in the long term.
Who is responsible for having an EPC on commercial premises?
The seller or landlord is responsible for ensuring there is a Commercial EPC for the building, or part of the building, being sold or let, even if an agent or another service organisation is acting on their behalf or providing an EPC. The seller or landlord must, ensure any person acting on their behalf, for example the estate or letting agent, is complying with the regulations.
How can I improve my commercial EPC rating?
Unless there is an applicable exemption, all commercial buildings are required by law to score a minimum Energy Performance Certificate (EPC) rating of E.
Other than meeting regulations, improving commercial EPC ratings also boosts a property’s value. EPCs are meant to inform potential buyers and tenants of a building’s energy performance. Since most tenants are responsible for paying their energy bills, most of them would see the benefit of an energy efficient building. Unfortunately, not all property owners are not adequately informed on how to improve EPC ratings.
Lighting
Inefficient lighting is one of the biggest contributions to CO2 emissions and a low EPC rating. Most shops, offices, and warehouses suffer from poor natural light and end up consuming large amounts of electricity for lighting. It is important to find sustainable ways to solve this. For starters, converting to LED lighting systems can reduce lighting costs by up to 50%. You can also add some lighting controls such as occupancy sensing and daylight harvesting lights to avoid wasting light energy in the middle of the day or in unused spaces.
Insulation
A well-insulated roof space and cavity wall insulation can improve your rating by up to 15 points. Just because you have insulation does not guarantee a good rating. It needs to be professional and thick (the recommended depth for roof insulation is 270mm). Cavity wall insulation may be appropriate for solid brick, metal clad properties, may benefit from alternative internal or external insulation. Please remember that by insulating your property, you will also benefit on reducing noise pollution.
Glazing
Upgrading windows to new double glazing can improve your commercial EPC rating, by up to 4 points. High-quality double gazing is efficient at retaining heat compared to cheaper options. The higher initial cost will have a great positive impact on the property’s EPC rating.
Renewable Energy
Switching to renewable energy sources is a long-term solution to improving your commercial EPC. Technologies such as Solar / Photovoltaic panels, biomass, geothermal heat, and wind turbines, offer a great source of renewable energy and to improving the rating. Most commercial properties use energy consistently, especially during the day. This coincides with the peak supply of renewable energy.
In Conclusion
If it is likely you will need to increase the EPC rating for April 2023, take professional advice from a surveyor or building consultant in good time and make an action plan for energy improvements, such as implementing green lease provisions.
How can Summit Environmental help?
Reviewing your current EPC rating, understand what you have in place already and working out where the best investment is.
Reviewing your EPC and assessing the best renewable energy sources.
A Retrofit Assessment or Occupancy Assessment. A Condition assessment of the property.
Assisting on recommendations on your EPC are a list of improvements you can carry out to make your premises more energy efficient.
Landlords must act to ensure that their property stock is up to the required standards, we can help recommend works and approved contractors.
Thinking of Solar. You need a survey. This will confirm that your property is suitable for solar PV, and includes a detailed inspection of your roof, your electrics and a solar irradiance survey
Undertaking a new EPC. In both residential and commercial premises, we can undertake a new EPC to make sure your information is up to date and accurate.
