Energy Performance Certificates For UK Commercial Property

From April 2008 all commercial buildings of more than 1,000 sq m will need an energy performance certificate (EPC) whenever they are constructed, sold or let.

In this article Richard Hegarty discusses the implications of this new regulation which is part of the Energy Performance of Building Directive which requires all EU countries to establish minimum energy performance standards for buildings.

Why are they being introduced?

According to the Government 50 per cent of the UK’s energy consumption arises from the country’s 25 million buildings. The Government supports the Kyoto Protocol and so is committed to reducing energy consumption. Improving the energy performance of our buildings will significantly help the country achieve our energy objectives.

When are they being introduced?

The Government have issued the following timetable for implementation:

From 6 April 2008 EPCs are required on the construction, sale or letting of all commercial buildings more than 1,000 sq m

From 1 July 2008 EPCs are required on the construction, sale or letting of all commercial buildings more than 500 sq m.

From 1 October 2008 EPCs are required on the construction, sale or letting of all remaining buildings.

Who is responsible for obtaining the certificate?

For buildings that are to be sold, the building’s owner will be responsible for providing a certificate.

How long will an EPC last for?

An EPC for a non-dwelling will last for 10 years. If there is a change of tenants but the EPC is still valid, a new certificate will not be required.

What buildings will be exempt?

The following places will not require an EPC:

Places of worship
Stand-alone building of less than 50 square meters (except for dwellings)
Temporary buildings with a planned time of use of 2 years or less
Particular building with a low energy demand (e.g. barns)
In some circumstances buildings to be demolished are exempt from requiring a certificate
An EPC is not required for any (off-plan) sales or letting before the construction of the building has been completed.
How much will it cost?

The price will be market driven. We expect the cost of EPC to be dependent on the size and complexity of the building. We anticipate that the cost of the EPC will be passed on by the seller or the landlord to the buyer or tenant.

What will the assessor look at in the building?

It is expected that the assessors will look at the following factors:

Thermal characteristics of the building, heating and hot water systems, air conditioning, artificial ventilation, built in lighting installations, the position and orientation of the building, solar systems, natural ventilation and indoor climatic conditions.

Will the energy rating of a building impact upon the market?

Buyers may be in a slightly better position to negotiate a better price if the EPC shows a low rating. However the location, condition of the building and state of the market will continue to be the dominating factors. I think people will treat the EPC as another box to be ticked before they can sell or rent a building.

However, there is some speculation that during 2008 there may not be sufficient numbers of energy assessors trained to handle the commercial property market. If there is a shortage then the cost of an EPC could be inflated and it may take longer to obtain the certificate.