Introduction
An Energy Performance Certificate (EPC) is a legal requirement for most commercial property transactions. Buyers should understand EPC obligations early, as energy efficiency can affect both costs and usability of a property.
What Is a Commercial EPC?
A commercial EPC assesses the energy efficiency of a non-domestic property and provides:
- An energy efficiency rating from A (most efficient) to G (least efficient)
- Estimated energy costs
- Recommendations for improvement
EPCs are required when:
- A property is sold
- A property is let
- A new commercial building is constructed
The certificate is valid for 10 years, unless a new EPC is commissioned earlier.
Minimum Energy Efficiency Standards (MEES)
Under current regulations, commercial property generally must meet minimum energy efficiency standards to be legally let.
At present:
- Properties with an EPC rating below E are typically unlettable, unless an exemption applies
This applies to:
- New leases
- Lease renewals
- Certain ongoing lettings
Buyers acquiring commercial property for investment should confirm compliance before completion.
EPCs and Buying Commercial Property
Even where a buyer intends to occupy the property themselves, EPC ratings remain relevant.
A poor EPC rating may:
- Limit future letting options
- Increase running costs
- Require capital expenditure to improve compliance
- Affect property value and marketability
EPC considerations should form part of due diligence, not an afterthought.
EPC Improvements and Costs
Improving an EPC rating may involve:
- Upgrading lighting systems
- Improving insulation
- Replacing heating or cooling systems
- Installing energy-efficient controls
The cost and feasibility of improvements vary significantly by property type and age.
Some improvements may be cost-effective; others may require structural changes.
Exemptions and Special Cases
Certain commercial properties may be exempt from EPC requirements, including:
- Some listed buildings
- Places of worship
- Temporary structures
Exemptions are specific and must be properly registered where applicable. Buyers should never assume exemption without confirmation.
Commissioning an EPC
EPCs must be carried out by an accredited non-domestic energy assessor.
The process typically involves:
- On-site inspection
- Review of building services and fabric
- Issuance of the certificate and recommendation report
Sellers are usually responsible for providing an EPC, but buyers should verify its validity and relevance.
EPCs and Future Regulation
Energy efficiency remains an active policy area.
While future minimum standards have been proposed in various forms, buyers should focus on:
- Current legal requirements
- Practical improvement options
- Asset resilience over the medium to long term
Professional advice is recommended where compliance is uncertain.
What Comes Next
Once energy efficiency is understood, buyers must consider ongoing taxation.
This is covered in the next section:
Commercial Property Business Rates.