Commercial

Why Commercial Energy Performance Certificates Are Required?

An energy performance certificate (EPC) is intended to inform potential buyers or tenants about the energy performance of a building, so they can consider energy efficiency as part of their investment or business decision to buy or occupy that building.

An EPC will provide an energy rating for a building which is based on the performance potential of the building itself (the fabric) and its services (such as heating, ventilation and lighting). The energy rating given on the certificate reflects the intrinsic energy performance standard of the building relative to a benchmark which can then be used to make comparisons with comparable properties. It is accompanied by a recommendation report, which provides recommendations on how the energy performance of the building could be enhanced, together with an indication of the payback period.

Buildings Requiring an Energy Performance Certificate

An EPC is only required for a building when constructed, sold or let.

For the purposes of the regulations, a building is defined as:

“a roofed construction having walls, for which energy is used to condition the indoor climate, and a reference to a building includes a reference to a part of a building which has been designed or altered to be used separately”.

For a building to fall within the requirement for an EPC it must:

  • Have a roof and walls; and
  • Use energy to condition the indoor climate. This is the case where the building has any of the following fixed services: heating, mechanical ventilation or air conditioning. Although the provision of hot water is a fixed building service, it does not “condition the indoor environment” and would not therefore be trigger for an EPC. The same argument applies to electric lighting. Where a building is expected to have heating, mechanical ventilation or air conditioning installed, it will require an EPC based on the assumed fit out.

Buildings Requiring a Display Energy Certificate (DEC)

Public authorities, and institutions providing public services to a large number of persons, who occupy space in a building with a total useful floor area greater than 1000m2, must display a valid energy certificate (“DEC”) at all times and have a valid advisory report in their possession.

A DEC shows an operational rating which conveys the actual energy used by the building as opposed to an EPC which conveys an asset rating showing the intrinsic performance of the building.

Only public authorities or public institutions (those providing services traditionally associated with local or national government) occupying a building must display a DEC. Other private occupants of the same building are not required to display a DEC.

If the building is sold or let, it will additionally require an EPC. If the building has an EPC, the asset rating will need to be included on the DEC. Further guidance on DECs is available see www.communities.gov.uk/epbd

When Energy Performance Certificates are Required

6 April 2008

EPCs required on construction for all dwellings. EPCs required for the construction, sale or rent of buildings other than dwellings with a floor area over 10,000 m2.

1 July 2008 EPCs required for the construction, sale or rent of buildings other than dwellings with a floor area over 2,500 m2.
1 October 2008 EPCs required on the sale or rent of all remaining dwellings EPCs required on the construction, sale or rent of all remaining buildings other than dwellings. Display certificates required for all public buildings >1,000 m2.
4 January 2009 First inspection of all existing air-conditioning systems over 250 kW must have occurred by this date*.
4 January 2011 First inspection of all remaining air-conditioning systems over 12 kW must have occurred by this date*.

Responsibilities for Providing an EPC on Construction or Modification of a Non-Dwelling

When a building being constructed is physically complete, it is the responsibility of the person carrying out the construction to give an EPC and recommendations report to the owner of the building and to notify Building Control that this has been done. Building Control will not issue a certificate of completion until they are satisfied this has been done.

If a building is modified to have more or less parts than it originally had and the modification includes the provision or extension of fixed services for heating, air conditioning or mechanical ventilation )ie those services that condition the indoor climate for the benefits of the occupants) then a EPC will be required. When the modifications are physically complete, it is the responsibility of the person carrying out the modification works to give an EPC and recommendations report to the owner of the building and to notify Building Control that this has been done. Building Control will not issue a certificate of completion until they are satisfied this has been done.

Responsibilities for Providing EPCs When Selling or Letting a Non-Dwelling

As soon as a building is in the process of being offered for sale, it is the responsibility of the seller to make available an EPC to prospective buyers.

As soon as a building is in the process of being offered to let, it is the responsibility of the prospective landlord to make available an EPC to prospective tenants.

Situations Where an EPC is Not Required

EPCs are not required on construction, sale or rent for:

  • Places of worship
  • Temporary buildings with a planned time of use less than two years (see glossary of terms)
  • Stand alone buildings with a total useful floor area of less than 50m2 that are not dwellings
  • Industrial sites, workshops and non-residential agricultural buildings with low energy demand (see glossary of terms for a detailed description)

EPCs are not required on sale or rent for buildings due to be demolished. The seller or landlord should be able to demonstrate that:

  • The building is to be sold or let with vacant possession; and
  • The building is suitable for demolition and the resulting site is suitable for redevelopment; and
  • They believe, on reasonable grounds, that a prospective buyer or tenant intends to demolish the building (eg on evidence of an application for planning permission).

Information You Need to be Collating Now!

The energy assessor will need to understand the internal layout of the building and for what purposes it is designed to be used. This is to understand the energy demands of each individual space (zone) in accordance with its designed use.

The information that will be required to produce an EPC includes:

  • The individual spaces or zones in use within the building, and their dimensions (either as verified from plans or measured). This information is most readily provided by building plans.
  • The activities conducted within the zones. Examples of zones include retail space, office space, kitchens, storage etc.
  • The heating and ventilation services for each zone (including type of system, metering, controls, fuel used etc.)
  • The lighting and controls used for each zone
  • The construction of the fabric of the building and thermal efficiency of the materials used: floors, walls and glazing.

If there are no plans for a building, the energy assessor will need to survey the building and gather the appropriate information. If you have up-to-date information and plans for your building this process will be less time consuming. The energy assessor is responsible for ensuring the information used in the energy calculations is accurate and, even where detailed plans are available, may need to validate this information by making a site inspection.

As this is an area where businesses will tend to have different levels of information please feel free to contact us for guidance. If preferred we can offer a free pre–assessment survey.

How the EPC or DEC Can Work for You

Marketing…. energy being as high profile as it is within the government and media proactive businesses are seeing this as an opportunity to demonstrate their level of efficiency. Potential clients may tend to favour this greener approach and subsequently develop relationships.

Although it is not mandatory for businesses to have a DEC by volunteering to have one is a way of promoting and advertising the understanding and awareness of the company.

Chris Pearson of Pearson Robinson Ltd raised an important point at a recent seminar in Nottingham stating;

“businesses who volunteer information demonstrate an overall awareness for their own carbon footprint and by implementing improvements demonstrate a good working etiquette that potential clients find appealing”

Penalties for Not Having an EPC or DEC

Local authorities (usually Trading Standards Officers) are responsible for enforcing the requirement to have an EPC on sale or let of a building. Failure to provide an EPC when required by the Regulations means you may be liable to a civil penalty charge notice. They may request you to provide them with a copy of your EPC and recommendation report. If asked, you must provide this information within 7 days of the request at any time up to 6 months after the last day for compliance with the obligation to make it available.

Currently the penalty for failing to make an EPC available to any prospective buyer or tenant is fixed in most cases at 12.5% of the rateable value of the building, with a default penalty of £750 where the formula cannot be applied. A formula is used as the costs of producing an EPC for non-dwellings are expected to vary according to the size, complexity and use of the building. The range of penalties under this formula are set with a minimum of £500 and capped at a maximum of £5,000.

The penalty is £500 for failing to display a DEC at all times in a prominent place clearly visible to the public and £1,000 for failing to have possession of a valid advisory report. In addition to these penalties, it is still necessary to commission the documents.

Irrespective of all of the above penalties companies will still be asked to provide an EPC or DEC

Any appeals maybe submitted to the courts up to 28 days from notice.