Published: 18th September 2024
In recent years, it has become increasingly crucial to address concerns regarding energy efficiency and sustainability, including within the property sector. A regulation that is in place to ensure sustainability targets are being met, is the requirement of Energy Performance Certificates (EPCs) within the property industry.
However, do commercial properties need an EPC? In this article, we discuss whether an EPC is a necessity for commercial properties or not.
An EPC provides an assessment of a building’s energy efficiency, giving it a rating from A (highly efficient) to G (least efficient). Along with the rating, the certificate offers recommendations on how to enhance the building’s energy performance, helping property owners identify ways to reduce energy consumption and improve sustainability. Find out more on our previous blog, Understanding Minimum EPC Ratings for Commercial Properties and why they are important.
All commercial properties let or sold within England and Wales are required to have an EPC score. The UK government specifies that all commercial properties must have an EPC if:
In short, yes. The majority of commercial properties require an EPC to comply with regulations in the UK. It’s important to know whether or not your commercial property falls into the categories of requiring one. An EPC is required for commercial properties in these instances:
Whilst the majority of commercial buildings require an EPC, there can be a few exceptions, including temporary buildings that will not be in use for longer than two years, buildings that are stand-alone, not connecting to any other properties and less than 50m², and any buildings with a low energy usage. However, you must check local regulations as these exceptions can vary from location to location.
Both resident and commercial EPC’s follow a similar grading system however commercial EPC’s are tailored specifically for business premises such as office buildings and retail spaces.
Unlike residential EPC’s which can suggest small improvements such as changing lightbulbs, commercial EPC’s usually involve more extensive recommendations that require larger-scale operations.
Improving the EPC rating of a commercial property is critical for reducing energy consumption, lowering operational costs and increasing the building’s overall value. To improve a commercial EPC rating, you can implement the following:
LED lights consume up to 90% less energy than traditional bulbs and also last up to 25 times longer. LED lights can reduce energy consumption, costs and the need for frequent replacements.
Modern boilers and air conditioning systems are designed to be highly energy efficient. During operation, they are design to consume less power and this can help your business save on energy bills.
Suitable insulation in walls, floors, roofs and windows minimise heat loss. The correct insulation can reduce the need to use boilers whilst maintaining comfort levels.
Ventilation lowers humidity levels, pollutants and improved indoor air quality. Correct ventilation creates a healthier environment for occupants and potential energy savings from more efficient heating and cooling.
Failing to have a valid EPC for your commercial building can lead to fines which are calculated based on the buildings rateable value. Breaches of less than three months can result in a fine of 10% of the rateable value, with a minimum fine of £5,000 and maximum fine of £50,000.
Breaches of three months or more can results in a fine of 20% of the rateable value, with a minimum fine of £10,000 and maximum fine of £150,000.
A Display Energy Certificate (DEC) must be displayed clearly in any building over 250m2 that is frequented by the public or houses public authorities. If a building is between 250m2 – 1000m2 then the DEC is valid for 10 years, if a building is over 1000m2 then the certificate is only valid for 1 year. This regulation was put in place from July 2015.
The importance of a DEC is to give the actual rating, known as the operational rating of energy performance of a building and provides an advisory report for considerations on how the occupants can take steps to improve the rating, alongside raising awareness and informing the public of the building’s energy usage. The operational rating is based on the amount of energy the building has used in the last 12 months.
In order to calculate a DEC, a Low Carbon Energy Assessor takes into account the building’s energy usage annually, the total floor area, the type of building, and the heating and cooling systems it has in place.
EPCs are important specifications required for commercial properties to ensure legal compliance and energy efficiency to name a few. In most cases, it is a requirement for commercial properties to obtain an EPC, especially when they are newly built, and or being sold or leased. By understanding the importance of them, property owners can stay up to date and ensure their properties are compliant with regulations and avoid hefty fines, whilst focusing on a more energy efficient future.
If you require any further information regarding commercial EPC’s, please get in touch with us today and our friendly team will be happy to assist you.