Commercial EPC
What are Commercial Energy Performance Certificates (EPCs)?
EPCs provide an energy rating on the performance of a building based on the performance potential of the building itself (i.e. the fabric) & its services such as heating, ventilation, air conditioning and lighting. An EPC is designed to inform potential buyers or tenants about the energy performance of a building so they may consider energy efficiency as part of their investment or business decision to purchase or occupy that property.
Energy ratings stated on an energy perform ance certificate are graded from A (i.e. most efficient) to G (i.e. most inefficient) in a similar fashion to white goods.
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Further guidance on EPCs is available at www.communities.gov.uk/epbd.
Legislative Background to EPCs
In response to European Legislation, the Government introduced the Energy Performance of Buildings Regulations 2007.
The Regulations state that an energy performance certificate is required when any commercial building is constructed, sold or let. The Regulations define a building as ‘a roofed construction having walls, for which energy is used to condition the indoor climate.’
Implementation of the Regulations has been phased so that EPCs are required as follows:
Buildings >10000 sq m 6th April 2008
Buildings >2500 sq m 1st July 2008
Buildings >50 sq m 1st October 2008
Do I Need an EPC?
If you are offering a building for sale or rent that has a total useful floor area of >50 sq m and doesn’t fall into any of the categories mentioned below, you will need an energy performance certificate. According to the Regulations, a valid EPC is required at the ‘earliest opportunity or at least before entering into a contract to sell or rent out the property’. Solicitors acting on behalf of the person(s) or organisation(s) seeking to buy or occupy your property will seek this information for their clients.
Where a lease is extended (i.e. the same tenant renews their lease), an EPC is not required.
Commercial energy performance certificates for new buildings will usually be carried out at the same time as the Part L report and should be supplied to the owner of the building when it is handed over.
Buildings that Don’t Require an EPC
Buildings which are excluded from the regulations include:
· places of worship
· those with a total floor space of <50 sq m
· low energy demand buildings (i.e. barns)
· temporary buildings (intended to be used for <2 years)
· buildings scheduled for demolition
Who is responsible for Supplying an EPC?
| Type of transaction | Party responsible for supplying an EPC | Recipient of EPC |
| New Build | Building contractor | Building owner |
| The building is sold | Building owner | Buyer |
| The building is let | Landlord | Tenant |
| Assigned lease | Granting assignor | Assignee |
| Sub let | Outgoing tenant | Incoming tenant |
Our qualified energy assessor will attend site and collect data relating to the thermal characteristics of the building. This will primarily include details relating to the construction of the building, the types of insulation present, the area of glazing and the use of each internal space. The building will also need to be measured accurately.
Your energy assessor will then focus on the services the building contains. The plant and equipment used to heat, ventilate and air condition a property will be individually inspected and details relating to their efficiency will be recorded. Should low or zero carbon technology be present, details of this highly efficient plant will also be taken into account.
Once all the data has been collected, it will be carefully input into the approved Simplified Building Energy Model (SBEM) which is a government approved database. The database will then prepare and generate your commercial energy performance certificate and subsequent recommendations report.
Each EPC will then be held in the government’s EPC database (administered by the Landmark Information Group) and will be given a unique certificate registration number.
Recommendations Report
Your energy performance certificate will be complimented by a recommendations report advising how the building’s efficiency grading may be improved. As a building becomes more energy efficient, significant cost savings can be made as the amount of fuel and power required to keep the building operational is reduced. With ever increasing gas and electricity prices, many companies will see an EPC and subsequent recommendations report as an opportunity to reduce the running costs associated with their buildings and thus increase their bottom line, especially where businesses occupy multiple sites.
Recommendations are split into three categories of short, medium and long-term payback appropriate for the building that has been assessed. Examples of recommendations may be as simple as installing energy efficient lighting, through to upgrading out of date (inefficient) plant such as boilers and air conditioning systems.
There is currently no legal requirement to implement these recommendations. However, this may change in the future as the UK seeks to further reduce its carbon emissions.
For How Long is an EPC Valid?
Commercial energy performance certificates are valid for 10 years but should the building undergo refurbishment which alters its thermal characteristics (i.e. it has a new roof or has its windows replaced) or has its services upgraded, an up-to-date EPC should be sought to reflect any improvement in energy efficiency.
How Much will an EPC Cost?
The cost of a commercial energy performance certificate will be determined by how long it takes the energy assessor to collect all the relevant information required for a rating to be supplied. The main influence on cost will not be the size of the building but rather the type of construction and the complexity of services (i.e. heating, ventilation and air conditioning) it contains.
Where clients are able to provide information such as accurate building plans, specifications of heating, lighting and air conditioning services and details of historical refurbishment programmes, the cost of an EPC may be significantly reduced.
EPCs on sale or lease of existing buildings are likely to be in the range of £600 - £800 for basic commercial units and shops while larger more complex premises may cost several thousand pounds.
What Happens If I Don’t Get an EPC ?
Providing an energy performance certificate when a building (included in the qualifying criteria) is constructed, sold or let is now a regulatory obligation.
The Weights and Measures Authority (i.e. Trading Standards) will police the system and a penalty of 12.5% of the rateable value of the building will apply should a valid EPC not be in place. This fine will be capped at £5000.00.
Solicitors will be asking for EPCs on behalf of their clients prior to exchange of contracts. By not having an EPC in place, the transaction may well be held up for weeks or months.
Further guidance on display energy certificates and energy performance certificates can be found at www.communities.gov.uk/epbd
If you would like to speak to one of our experienced energy assessors regarding EPCs why not complete our quick contact form below selecting “commercial energy performance certificates” and one of our representatives will contact you shortly.
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