Minimum EPC Standards

By 10th March 2014Articles

How the future minimum EPC Standards and going green will benefit you…

One of the most significant changes affecting the property market will be the Governments introduction of minimum energy standards in 2018 requiring owners, developers or building managers to consider environmental sustainability more than ever when marketing properties.

From April 2018 it is proposed that Residential and Commercial properties will be required to achieve an Energy Performance rating of an ‘E’ minimum in order to legally market the property for lease or private rental. It is currently estimated that at least 20% of all commercial buildings do not meet this minimum standard and will need upgrading.

Your EPC will provide a report identifying recommendations to improve the performance of your building, where these recommendations have been carried out and the property still cannot achieve an ‘E’ rating it will be legal to let the property with a notice on the EPC to that effect. This may affect the marketing potential of the property as tenants become more sensitive to fuel costs.

Therefore you need to be aware of your current EPC rating and its recommendations. Delay in acting upon these recommendations may affect property valuations, rent reviews and dilapidations, leaving you with an empty property in 2018.

Min EPC PicFurthermore, Part L of the Building Regulations will be updated in 2013. The previous update in 2010 saw buildings dropping a band (e.g. from E to F) when reassessed. A similar impact is considered likely in 2013 which may therefore see the building dropped to band F when it is reassessed and therefore at risk from the legislative changes.

Any action plan will therefore need to look beyond the guidance of the EPC recommendations.

The EPC requirements will be policed by your local Trading Standards Authority who can ask to see an EPC for any building to be marketed. If there is no EPC, then one must be commissioned, currently within 28 days, but this will be reduced to 7 days.

The ‘Green Deal’

The Governments expectation is that the ‘Green Deal’ can support the funding and installation of energy efficient measures for all building sectors and types, through accredited Green Deal providers. The scheme commenced in Jan 2013 for householders, with the launch of the Green Deal in the commercial sector delayed whilst funding arrangements are resolved during 2013.

There are no upfront charges other than initial reports for the measures undertaken as the ‘Green Deal’ is a “pay as you save” scheme with the cost being met over the lifetime of the measure from energy cost savings and collected with the energy bill. The energy supplier then passes on the payments to the Green Deal funder.

Under the Green Deal the minimum EPC requirements are met if the maximum package of measures possible is carried out, even if they do not take the EPC above an “F” rating, though this will be recorded within the EPC.

Funding is an issue, particularly in the commercial sector, where some research indicates the cost of a Green Deal measure taken over the lifetime of a funding plan could double the cost compared to paying for everything up front. This might not therefore be the most cost effective approach. As funding periods are likely to be shorter in the commercial sector, to reflect payback in line with lease length, the Green Deal may not always be the appropriate route.

What Flatt Consulting can do for you…

In some instances meeting the minimum standard may be straightforward, whilst many others may be far more complex and potentially costly to resolve.

Flatt Consulting, as accredited Low Carbon Consultants, can provide you with a bespoke ‘Energy Audit’ to assess in detail how your building is performing, its operation and the most economic approach available to reduce energy consumption and carbon emissions. We can provide EPC’s and review your building against the anticipated future Building Regulation requirements, identifying cost effective opportunities for improvements to achieve excellent EPC ratings.

Air Conditioning Inspections are also intended to assist in reducing a building’s energy consumption but are often not available or utilised. Flatt Consulting can provide the Air Conditioning Inspection Report whilsy undertaking an ‘Energy Audit’ or as a stand alone report as required.

Future benefits…

Complying with legislation to improve poorly performing buildings will reduce your energy costs and building carbon emissions, whilst making your property more marketable and profitable in the long term.

Timely investment programmes can be managed to ensure significant works are undertaken at times suit, minimising disruption and possibly lease expiration.

By taking action now you will ensure your business has a strong foothold in the greener property market of the future.