EPCs: To B or not to B?

(That is not the question anymore as the outcome seems pretty certain!)

Consultation on the 2030 non-domestic MEES target of B rated EPCs closed in June this year.

The consultation set out proposals to improve the implementation and enforcement of an EPC B requirement for non-domestic MEES for 2030. The ambitious new agenda set out by the government aims to drive clean growth and reduce emissions across the non-domestic rental building stock.

The new regulations have been developed in response to feedback from a comprehensive pilot study in 2018/19, along with in-depth consultation from industry professionals.

The key proposals are:

Landlords of rented non-domestic buildings will need to have a valid EPC at all times.

Previously a valid EPC was only required for a let, sale or on the construction of a new building, but the proposal is that a valid EPC must be in place at all times.

Landlords will need to comply with phased implementation target EPC C by 2027.

A number of staggered approaches to reaching the milestone by 2030 were considered but it was deemed too risky to allow landlords to remain inactive until just before the 2030 deadline. EPCs on the ‘Exemptions and Compliance’ database must achieve a C rating by 1 April 2027, and a B rating by 1 April 2030. Valid exemptions will apply, but we await the detail to see if these will remain the same as the current exemptions.

The landlord will have a responsibility to make sure a valid EPC is submitted to a new ‘PRS Exemptions and Compliance’ Database at four points in time to allow easier enforcement.

According to consultation feedback, the current EPC policy has been difficult to enforce for a number of reasons. It is currently a highly resource-intensive task to identify potentially non-compliant properties. Therefore landlords will now have a responsibility to make sure a valid EPC is submitted to a new ‘PRS Exemptions and Compliance’ Database on 1 April 2025 and 1 April 2028, then compliance with the new targets will be checked two years after these dates – 1 April 2027 (C rating) and 1 April 2030 (B rating).

Payback Calculator

Currently, if a landlord wishes to claim exemption from an improvement measure under the ‘Seven year payback’ rule,  three quotes are required (along with billing data and an energy assessors calculation of savings). This methodology will be replaced by a more efficient and user-friendly ‘Payback Calculator’. The calculator will provide standardised costs of energy efficiency measures, based on actual industry data. Landlords will be able to input their building characteristics and receive a list of measures that are in scope or out of scope of MEES for their building based on pre-populated cost and payback assumptions. If the payback is more than seven years, the landlord will be exempt from carrying out that particular improvement.

Important dates for commercial landlords

Now

Ensure your EPCs are accurately modelled, and the ratings checked in both Level 3/4 SBEM and Level 5 DSM.

Mid/late 2022

The revision of SBEM and the fuel carbon factors is due – electrically heated buildings are likely to improve in rating under the new methodology, so don’t rip out those electric panel heaters without checking what the rating might be after these changes are implemented.

April 2023

The existing MEES Regulations are in full effect and all privately rented non-domestic buildings with a valid EPC will fall under the scope of MEES, so should either be an E rating or higher or have valid exemptions registered.

April 2025 – April 2030

The new regulations as discussed above come into force.

Free EPC B Proposal Workshop

MEES Solutions is offering a free, one-hour CPD workshop on the EPC B requirement proposal. Included in the workshop will be a detailed walkthrough of the proposed legislation and how your business or portfolio can best navigate it. To book your place on our free workshop contact us at admin@meessolutions.co.uk

Tune into the Place North West COP26 podcast episode where MEES Solutions run through five easy ways to improve your EPC rating: