Landlords of Commercial Buildings Must Urgently Focus on Commercial EPC Ratings

Binod Bhandari
Jul 20, 2017 · 4 min read

Energy performance certificate (EPC) ratings must be brought to the fore by landlords. With new commercial building projects standing as low as 2%, commercial property accounts for 10% of all emissions of greenhouse gas in the UK. This places commercial landlords in a quandary, and the only viable way to reduce gas emissions to ensure compliance with the UK’s pledge at the Paris Climate Summit is for commercial properties to undergo an across-the-board retrofit. In this complex sector of diversity in stakeholders and building types, this is sure to be a very difficult task.

With the UK government’s commitment to emission reduction, as of April 1st, 2018 landlords of commercial properties are going to be forbidden from letting properties that do not comply with the Minimum Energy Performance Standards (MEPS) detailed in Section 49 of the Energy Act 2011. The minimum EPC rating for a building must be Band E to qualify for letting to tenants.

Ratings & Regulations

At the end of 2014, 18% of commercial properties in the UK held an EPC rating of Bands F or G, so the government introduced the Bill to accelerate upgrades of energy efficiency in the commercial property sector. The regulation deadline is now less than two years away and landlords must urgently take action if they want to comply and avoid being fined for non-compliance. Failure to comply with the new building regulations will be met with a fine being imposed, ranging from £5,000 to £150,000 based on the rateable property value and the period of non-compliance.

Commercial EPC ratings are not the only benefit of retrofitting. Introducing energy-efficient technology and systems adds value for the tenant and for the landlord because the building will be more sought after than previously. Inefficient energy technology and systems cost business owners’ and average of 20% more per annum on wasted energy costs. Tenants will see a substantial savings on cost of energy by letting commercial buildings that have been retrofitted, and landlords will benefit by increasing the value of their investment. Implementation of energy efficient technology and systems will ‘future-proof’ the property, ensure future compliance and add value to the property worth should the landlord consider selling in the future.

Energy Efficient Systems

Energy efficiency is encouraged in commercial properties with a number of initiatives being introduced, like the new fund of the Carbon Trust. Launched in April 2016, the goal of the fund is to provide small businesses an incentive to replace old, inefficient energy systems with new systems throughout England, Scotland and Wales. Small and Medium sized Enterprises (SME) can apply for training, assessments on cost saving and capital support from the £7m fund that is reserved only for energy saving implementations. Capital of up to a 15% contribution to projects to improve energy efficiency can be applied for by eligible companies. By replacing mainly outdated heating and ventilation with energy saving systems, businesses will be enabled to invest £55m in energy conservation and improvement projects.

The most costly expense in any building is heating therefore heating offers the most potential for bettering efficiency. Heating is also crucial in any building, so it is vital that it runs at a high level of efficiency. Unfortunately in commercial buildings, many landlords are averse to investing in the latest system technologies mainly because they are ignorant of the value of reducing operational costs. Landlords also shy away from retrofitting because they want to avoid any disruptions it may cause.

Energy saving system technology does not come in a one-size-fits-all option, and there are various products available. Tenants can choose radiators that are low mass and low water content; their water content is around one tenth of the water contained in standard radiators like the steel panel type. This will result in an average saving of up to 16% on heating costs. Their light weight allows for easy installation of these radiators and they offer a guarantee of no less than 30 years. These radiators heat up rapidly because they use less water, so they reduce emissions through diminished energy consumption.

Large Areas Do Not Require Huge Radiators

Development in recent years of technology such as Dynamic Boost Effect (DBE) can heat any area almost nine times quicker and produce almost triple the heat proving that compact radiators can be efficient and aesthetically easy-on- the-eye. Low-H20 radiators that make use of DBE technology are the perfect match for heat pumps, where previously under-floor heating or massive radiators would have been the only option. When renewable technology has been utilised as the prime source of heating, the building will qualify for the Renewable Energy Incentive (RHI). RHI allows for the cost of the heat source to be paid back by the UK government over a 20 year time period.

MEPS have created a space for conversations with landlords of commercial properties on how energy efficiency can be achieved to the benefit of all. Planning now to invest in new technology systems and ensure compliance with Commercial EPC ratings is an excellent call for commercial landlords to minimise operations costs, and maximise property investment. The other benefit of course is assisting the UK government with its commitment to achieve emission reduction targets.

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Binod Bhandari

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Blogger and Digital Strategist. Contributor at Medium , Buzzfeed , Huffington Post , Quora and Engadget.

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