I’ve recently been in the fortunate position of having the ear of civil servants when, along with fellow chartered surveyor Martin Gibbons of Vital, I attended a roundtable organised by Property Energy Professionals Association (PEPA) – the trade body representing accreditation schemes like Elmhurst – and the British Energy Efficiency Federation, to share our views with the Department of Energy Security and Net Zero.

It was a positive meeting, but I came away feeling frustrated at the lack of any indication on when we can expect a decision on updating non-domestic MEES.

The Prime Minister recently dropped domestic MEES proposals but made no mention of non-domestic MEES. I wonder how much longer we’ll have to wait for over-due updates on 2019’s Non-Domestic MEES Consultation – to discover when the government is likely to implement the next phase – and the Energy White Paper from 2020, which sets out its vision for net zero. In the meantime, everyone in the sector is still working on the assumption that commercial landlords have a likely deadline of 2027 to achieve a C rating, but it’s by no means certain. While some are striving to achieve a B rating ahead of a possible 2030 deadline – particularly if they’re beholden to shareholders, value their reputation and have access to funding through investors – others without this motivation will probably decide not to bother, which isn’t the right approach.

There’s an evident disconnect between the soothing noises coming from civil servants and the attitude in Whitehall. Apparently, the PM believes the property market doesn’t need more regulation on energy efficiency, an opinion fuelled by daily letters from those in the anti-energy efficiency camp. His legal advisors suggest that to implement the next phase of MEES, the government will need to enact primary legislation, however, Section 49 of The Energy Act 2011 (which was responsible for MEES) indicates that ministers could proceed with further MEES regulations without it. I queried why they’re so reluctant to press ahead; after all, the current regulation provides an exemption so that if after you’ve explored your options, you can’t get a B for a property without significant financial investment, the payback is longer than seven years or the tenant refuses to allow improvements because of perceived disruption to their business, there is a five-year period of grace.

Like the British Property Federation, the RICS and Better Buildings Partnership, I believe Rishi Sunak urgently needs to make a decision on non-domestic MEES to provide confidence to the market. After all, MEES has already helped improve the EPC rating of non-domestic buildings: reducing carbon emissions, creating employment opportunities, improving the comfort for tenants, and increasing the asset value. Even though the EPC methodology changed last June to take account of the lower carbon intensity in grid electricity, effectively improving the EPC rating for some landlords without any capital investment, the number of F and G rated buildings has dropped significantly since MEES was introduced in April 2018, from 125,198 to 2,220.

If the government isn’t going to decide any time soon, there’s no incentive for companies to invest in the sector or train new and existing staff during the current skills shortage, and without regulation to achieve a minimum EPC rating, manufacturers aren’t encouraged to invest in R&D. Meanwhile, there’s pressure from tenants who increasingly demand more sustainable, comfortable and energy efficient buildings. I think it’s time for our sector to lobby government, as well as other political parties waiting in the wings, so that they include energy efficiency in their manifestos, and ensure we have a clear net zero strategy which includes a target EPC band B for non-domestic MEES.

To kick things off, how’s this for a plan of action:

  • Carbon emissions should be renamed ‘carbon pollution’, while recognising that property is responsible for 40% of the world’s emissions.
  • An acknowledgement that as a national measurement system, the EPC has worked well since 2007 to raise awareness of energy efficiency in both domestic and non-domestic sectors (hopefully seeing off any thoughts of ditching EPCs altogether!)
  • Recognition that improving the energy efficiency of non-domestic property is possible and that regulations have wide-ranging benefits to occupiers, investors and building owners, by helping to drive investment in new technologies, employment and infrastructure and decarbonise the built environment.
  • The introduction of a more robust and thorough training regime to reflect how Energy Assessor training must evolve in the same way as EPCs – from a data-gathering exercise to becoming a significant and important document. The Domestic Energy Assessor market is a prime example of how poor-quality training and low-cost service leads to poor quality EPCs which, in turn, leads to a lack of confidence in the reports. This could be supported by a more stringent quality assurance regime.
  • More synergy between domestic EPCs and commercial EPCs so they both present the same metrics to enable better understanding and comparison.

If this government’s inertia continues, by speaking out about the possible long-term implications for our sector and all those landlords in limbo, perhaps ministers will finally make a decision and take action.

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