Further changes to minimum energy efficiency standards (MEES) for commercial properties are expected across the UK.
Changes to Energy Performance Certificate (EPC) ratings are the first in a number of new initiatives by the Government to improve energy efficiency across commercial lettings. Since 2018 a minimum EPC rating of E has been in place for new tenancies, but from 1st April 2023 this is set to change and same rule will apply to all existing leases. This means that it will be unlawful for a landlord to continue to let a commercial property with an EPC rating of less than E.
The 2023 changes are however a precursor to reaching a new target set out in the Government energy white paper that was unveiled in December 2020 to achieve net zero emissions by 2050. This includes increasing the MEES for all commercial properties to an EPC rating of B by 1st April 2030.
A phased implementation will be introduced to help landlords reach the new targets and will consist of two “compliance windows” each lasting two years. At the start of each compliance window, the landlord would be required to present an EPC, and at the end of the compliance window, the landlord would be required to have brought the property up to the minimum EPC standard.
Compliance window 1 is expected to begin in April 2025 and landlords will be required to submit a valid EPC by this date. This means that, if the property doesn’t have an EPC, or its current EPC has expired, then a landlord will be required to obtain a new EPC. If the valid EPC is a rating of C or above, the property will be compliant, but if not, the landlord will be required to undertake any works necessary to bring the property up to a C rating or above by 1st April 2027, unless an exemption applies
By 1st April 2028, the start of compliance window 2, landlords will be required to present a valid EPC of B or above, for the the property to be compliant. If the property has a rating of less than B, then the landlord will be required to undertake necessary works to achieve an EPC rating of B, or have registered a valid exemption by 1st April 2030.
A consultation is underway to address issues such as the cost of works, implementation of a new central register of compliance and exemptions, responsibility for compliance including increased collaboration between landlords and tenants to achieve targets, and addressing specific issues affecting listed buildings.
A Government response to the consultation is expected by the end of 2021, and will be followed by legislation which will formalise the framework for achieving 2030 targets.