Understanding your building energy efficiency requirements

02 March 2022

Understanding what your reporting and building energy efficiency requirements are can be a challenge, but is a critical part of both your sustainability reporting and performance.

Discerning what a specific building requires is particularly important for landlords, which includes both private and social housing as well as commercial property.

Here, we lay out some of the most common energy efficiency building compliance requirements and which buildings they apply to:

MEES

The Minimum Energy Efficiency Standards, known as MEES, established minimum energy efficiency standards for the private rented sector in 2016.

This was followed by fresh laws in April 2018 that laid out new minimum standards for the non-domestic private rental sector.

Due to these regulations, it is unlawful to grant new leases to properties in England and Wales that do not meet MEES. Non-compliance risks a significant fine of up to £150,000.

At the time that MEES came in for non-domestic rental properties, it was estimated that 20% of relevant properties had an Energy Performance Certificate (EPC) rating below E, making it illegal to rent them under the new standards. For both domestic and non-domestic properties, a landlord fails to comply with MEES in the case of either renting out a property given an EPC rating of F or G, as well as legally mandating the requirement for a building to be assessed and awarded an EPC.

Landlords can be made exempt from MEES if they can demonstrate that they have carried out cost-effective energy efficiency improvements to a property, which can earn a five-year exemption.

A similar exemption can also be awarded if recommended measures to bring the property up to minimum standards would reduce the market value of the property by more than 5%.

DECs

Display Energy Certificates, known as DECs, are a requirement for public sector buildings or those occupied by public authorities that measure more than 250 square meters in size and which provide a public service to a large number of people.

Buildings between 250 sqm and 1,000sqm are issued a DEC that lasts for 10 years, which larger buildings must re-apply for annually.

DECs rate the operational energy performance of a building against established benchmarks.

A DEC rating is calculated by a Low Carbon Energy Assessor, which factors in the type of building, total size, annual energy consumption in both gas and electricity, together with the way a building is both heated and cooled.

Improvements in DEC performance typically come from enhancements in heating and cooling control, lighting and on-site generation.

EPCs

A valid EPC has been a legal requirement for the sale of a home or commercial property since 2008 and is now also part of calculating the Minimum Energy Efficiency Standards for the rental sector.

However, there is a fairly broad range of factors that can grant a building exemption to needing an EPC.

This includes listed buildings, places of worship, temporary buildings in use for less than two years, detached buildings smaller than 50sqm, and rental or holiday accommodation rented out for less than four months of the year.

Energy rating system for large commercial and industrial buildings

A new energy rating system for large commercial and industrial buildings is expected to be finalised this year (the consultation ended in June 2021 and the feedback is currently being analysed), which will transition them to a performance-based rating system, providing annual metered data to an administrator to generate an ongoing rating. This new framework is aimed at helping the UK hit its Net Zero targets, as one of the biggest challenges we face is the built environment, where there are 1.66million commercial and industrial properties that account for a third of all UK emissions from buildings.

Under the new framework owners and single tenants of buildings above 1000m² will be required to:

• onboard their building onto the new framework
• submit their metered energy use data (and other relevant information) yearly, to the rating administrator
• receive a rating based on the building’s annual energy and carbon performance

Engaging with these requirements now not only puts you ahead of the need for costly reactive changes in the future but also avoids fines for non-compliance. For more information give us a call on 08451 46 36 26 or email enquiries@inenco.com.