Making the Most of EPCs


27 Feb
27Feb

What is Energy Performance Certificate (EPC)?

An energy performance certificate is a document stating how a given building is likely to perform in terms of energy efficiency, and is determined by an EPC assessor. 

There are two different types of EPC assessments 

Domestic - applying to residences where the grade relates to the likely annual energy cost of running the home. 

and 

Non-Domestic - applying to commercial and institutional buildings including nearly all buildings or parts thereof not used as residential accommodation. These are graded on their estimated CO2 emissions per area.

EPCs are Compulsory when Marketing Properties

If you are a property developer, property manager, landlord or estate agent, you will be aware of the requirement for nearly every building offered for sale or rent to have an in date Energy Performance Certificate (EPC) and for that certificate to show that the building meets the current Minimum Energy Efficiency Standard (MEES). This is an obligation for both domestic and non-domestic properties before it can be lawfully marketed for sale or rent / lease.

A residential EPC is intended to give an indication to those who might buy or lease the property of how much it might cost them to heat, cool (If applicable), ventilate and light the property.

For commercial property, the report makes a similar comparison based on operating emissions rather than energy cost.  

(The Non-Domestic report will say how much electricity and other fuels the building is likely to use, so making it relatively simple to estimate the energy running costs for basic building services). 

The Value and Purpose of an EPC

By providing an estimate of likely energy usage under standardised operating conditions, anyone wanting to buy or rent premises can compare the energy performance of different buildings, and have a reasonable idea of how much each building is likely to cost to operate in terms of energy. (Disregarding the business activity e.g. computers, printers, machinery etc contained within the building) 

Given that the total cost of premises is a better measure of a building's affordability than how much it costs to rent or buy, it stands to reason that everything else being equal, that a property with a good EPC will justify a modestly higher sale or rental price than one just meeting the minimum legal standard, and will be more attractive to potential clients!

Why?

Because if a fixed budget is available for premises - to buy or rent and to operate them, a building with a smaller energy bill leaves more cash available to pay the mortgage / rent.

Note:- EPCs do not take account of equipment used within premises to run the business, but only of equipment and services used to run the building. A factory used for heavy industry will use far more energy than a warehouse operating in identical premises next door, but is likely to have a fairly similar EPC.

How Do EPCs Impact the Value of Commercial Property? (propertysales.com) 

MEES Compliance of Maximum Efficiency

Anyone wishing to sell or rent out premises has a decision to make

do I

a. Regard the EPC and minimum energy efficiency standard as a regulatory burden to be minimally satisfied as quickly and cost effectively as possible.

or 

b. Take the opportunity if premises are vacant or opportunity presents to upgrade the premises as much as is reasonably possible subject to budget?

I would argue that in many cases, there is a case for taking a pro-active attitude to energy efficiency and getting premises to a high level of efficiency rather than a reactive minimally compliant attitude - grudgingly and reluctantly meeting regulatory requirements.

Why?

1. Efficient premises are more attractive to clients than inefficient ones and may well attract a higher sale or rental price. 

2. MEES regulations are due to change in 2025 so if you want to rent out your premises to new clients after that date, you will almost certainly need to achieve an EPC of D, and in 2030, an EPC of B or C. GET THINGS RIGHT NOW, AND THE PREMISES WILL STILL BE COMPLIANT THEN!

3. An increasing number of clients are actively interested in minimising their environmental impact, and would not consider buying or operating from buildings with a poor EPC. If you offer premises with a high EPC grade, then your market place will include such clients.

4. Anyone taking on energy efficient premises limits their risk exposure re any future increase in energy prices. 

5. For buyers, any improvements can be more cost effectively paid for bundled into the mortgage than if those same improvements were carried out and financed separately after purchase.

6. In some cases, grants, tax breaks, or favourable government loans - funded through energy savings are available to assist with the costs of improvements, whilst in other cases such as solar power, other mechanisms such as power purchase agreements can be used to fund the improvements.

7. Reducing emissions can help to minimise the extent of anthropogenic climate change.

How can Chiltern Utility Solutions Help

We are now registered to provide Non-Domestic EPCs to commercial and institutional clients, and can assist with Minimum Energy Efficiency Standard compliance.

If you are a commercial estate agent, or managing agent and interested in what we have to offer, please get in touch. 

Telephone 0800 0025 724 or Mobile 07737 814724

or e-mail me on 

gary@chiltern-utility-solutions.co.uk

Gary Tulie

Director

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