Many commercial landlords might be wrestling with issues around bills, non-paying tenants or rising mortgage rates but they still can’t afford to ignore fast-approaching EPC deadlines.
All non-domestic rented buildings must get an EPC B rating by 2030 and although that’s still a few years off, the government has proposed a phased implementation of achieving a minimum C rating by 2027 which is going to be a particular challenge for any properties currently below an E; next April, they will only be allowed to let out a non-domestic building if they make this grade. The government plans to amend current rules so that a building always needs an up-to-date EPC during the whole time that it is let, and this would also cover cases of lease renewal.
It is also considering not insisting on compliance at the point of letting. With new shell and core lettings – where a landlord lets a unit in a stripped-out condition – an EPC for the building is likely to produce an F or G rating, making it unlawful for them to let. The concern is that they might need work carried out to meet the required EPC level, only to have the tenant remove any changes as part of their fit-out. New proposals would mean enforcing MEES (Minimum Energy Efficiency Standard) regulations only once a unit is fully operational and has been occupied for at least six months – a much more sensible idea.
All commercial buildings need an EPC when they’re built, sold or let – and commercial property owners face a fine of between £500 and £5,000 based on the rateable value of the building if this isn’t made available to any prospective buyer or tenant. An EPC is also necessary for carrying out construction work or alterations, with a few exceptions including properties that are detached and less than 50sqm, places of worship, temporary buildings, and those scheduled to be demolished. While the government might possibly delay the change in obligation to get a B rating due to rising cost-of-living issues and there’s a question around what landlords can actually afford, it’s clear that the rise in fuel costs and further planned hikes in energy efficiency standards make carbon-reducing measures a smart investment for landlords and tenants alike. As well as meeting regulations, improving a commercial EPC rating boosts a property’s value and tenants’ comfort.
Improvements that usually make a significant difference include new lighting and energy-saving heating methods. Offices, shops, and warehouses often suffer from poor natural light and have to use a large amount of – often inefficient – lighting. Simply by converting to LED lighting systems, property owners could save up to 50% on lighting costs and improve their EPC score. When looking at heating, an efficient air-conditioning unit helps, along with wall and roof insulation, and renewable sources of energy such as solar panels. Any improvement works will need appropriate documentation so that they can be included in the EPC. However, it’s certainly not always the case that substituting the much-hyped heat pump is the answer – sometimes a blended system of gas boiler and heat pump is what’s needed – and that’s a conversation to have with a heating engineer, in collaboration with an assessor. When refurbishments are being planned, it’s imperative that the design team consider the energy performance and engage with an energy assessor at the outset and not leave it until practical completion. There are still far too many instances where Murton & Co have received enquiries for an EPC after the refurbishment works have been completed and no prior assessment undertaken, which puts the development at risk of non-compliance with the minimum EPC regulations. This is an area where building control bodies could be instrumental in raising awareness. That’s why a thorough assessment of the building’s ‘fabrication’ can be invaluable. We can take the lead in the journey towards smarter and more comfortable buildings with our wraparound end-to-end service. It’s always purpose-driven and includes advice for landlords throughout their retrofit journey.
As qualified commercial (or non-domestic energy) assessors, we’ll produce an EPC after calculating the building’s energy rating, taking into account the type of construction, including walls, roofs, floors and windows, heating, cooling, ventilation and hot water systems, lighting, and whether different parts of the building are used for different purposes. There are three categories of building complexity for commercial buildings which are aligned with the energy assessor’s qualifications: from a level 3 for small, basic buildings with simple heating systems to level 5 for large, complex buildings such as shopping centres. Assessors uses SBEM (Simplified Building Energy Model) calculations for level 3 and 4 buildings, but a more sophisticated Dynamic Simulation Modelling calculation for those categorised as level 5. A survey can take upwards of an hour, depending on the building’s size and complexity. The energy assessor will then need to process their survey data which can take several hours to complete, so in total it could take from a few hours to a day or two before the report is sent to the client. This report highlights where they can make energy and water efficiencies, save on utility costs and reduce carbon emissions. It should also help owners cut operational and maintenance costs.
Commercial assessors have usually trained as domestic energy assessors and cut their teeth surveying houses. In fact, many domestic assessors have upskilled in recent years and the fact some companies are now struggling to find enough good assessors to fill roles is indicative of the current drive for energy efficiency across a range of commercial sectors. It’s a dynamic and interesting career and should appeal to many school-leavers or those looking for a future-proof, often flexible role as plenty of assessors work for themselves. There’s no doubt we’re going to need even more trained commercial assessors when the message finally gets through to all those landlords who still aren’t up to speed. Energy assessment companies need to come up with some innovative ways to recruit, but any recruitment strategy must go hand-in-hand with government support and funding if we’re going to respond to those fast-approaching EPC deadlines.
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