176: Minimum energy requirements to be tightened up by 2030

The latest development on energy requirements for commercial property is the government’s consultation on tightening minimum energy efficiency standards (MEES) for commercial private rented properties.

The consultation proposes amending the existing MEES regulations to require all non-domestic properties which are occupied under a lease to achieve either a minimum Energy Performance Certificate (EPC) rating of B or C by 1 April 2030. The current MEES requirements are that commercial leased buildings must have an EPC rating of E or above.

However, the message from the government is that it wants all leased commercial property to eventually have an EPC B rating, which will give it a greater chance of achieving its energy reduction objectives. The big question for the government and the property industry is how to achieve the goal of reducing energy use by at least 20% by 2030.

The proposal is based on existing exemptions being tightened and therefore the current exemptions would still apply.  For example, landlords would not be obliged to undertake energy efficiency improvements that did not meet the existing seven year payback test for cost-efficiency.

The proposal is also that landlords could continue to let a building post 2030 that does not meet the required minimum EPC standard, provided the relevant landlords prove the building has reached the highest EPC band that a cost-effective package of measures could deliver.

The current consultation states that the government intends to publish a similar consultation for domestic PR properties during winter 2019/20.

Here is a copy of the consultation. Responses can be submitted online up to 7 January 2020.