Update to minimum EPC ratings

Update to minimum EPC ratings

All remaining provisions with regard to the Minimum Energy Efficiency Standards (MEES) for EPC ratings are now in operation. This is likely to result in the minimum EPC rating required for non-domestic leases being raised from the current ‘E’ standard to a ‘B’ by 2030. This will require properties to be upgraded well in advance of this change.

With this change, we believe there are risks and opportunities involved for both buildings that are already at the ‘B’ standard and those that currently fall below it.

  • The anticipated new Part L will likely use a significantly lower carbon factor for grid electricity, already lowered from 0.512 to 0.233. This will result in improvements in electrically heated buildings. 
  • The Reference or Target Building (known as the TER) which generates the EPC rating may be updated. Currently this building uses gas for heating and hot water. A change to electricity would make it harder for those buildings heated by gas to meet the minimum standard. 
  • Building owners should ensure that any improvements to their buildings are documented in updated O&Ms so that the use of default values is reduced and a better EPC rating is achieved.

 

Where buildings may not be able to meet the minimum standard of ‘B’, they will be able to apply for an exemption (as before) if it can be proved that the building has reached the highest level of EPC rating that a cost-effective package of measures can deliver. This is likely to be based on the 7-year payback test. However this will only buy a limited period of time before this has to be reconsidered.

We believe that EPC modelling should not be seen as a point in time assessment and forgotten about until the EPC expiry date, but rather should be continually updated in line with changes to the building. The EPC assessment should also be reassessed in line with any potential changes in EPC methodology.

With this progressive modelling, the impact of a tightening of MEES regulations will be significantly de-risked. It will also help improve ESG targets and show greater consideration towards any net zero carbon strategies.

Please contact Adam Alexander for further information.

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