Non domestic Energy Performance Certificates

An EPC is required on all commercial buildings that are to be put into the market to be sold on a leasehold or freehold basis from 4th January 2009. This is in accordance with the European Commission’s Energy Performance in Buildings Directive (EPBD – Directive 2002/91/EC).

There are certain buildings that do not require an EPC, such as warehousing where there is no form of heating or cooling or mechanical ventilation to condition the internal space. If a property has a roof and walls and energy is used to condition the indoor climate an EPC is required as defined by the Department for Local Communities and Government (CLG), based on the EPBD.

What is an EPC for?

An EPC is intended to give potential purchasers or occupiers an insight into the carbon footprint of a given building, and by implication the possible energy bills, which are an expense for any such occupier. In theory, the better the rating, the more energy-efficient the building is, and the lower the fuel bills are likely to be. The energy performance of the building is shown as a Carbon Dioxide (CO2) based index.

The EPC is similar in appearance to the energy labels now provided with vehicles and many household appliances. Its purpose is to indicate how energy efficient a particular building is. The certificate will provide an energy rating of the building from A to G, where A is very efficient and G is the least efficient.

Each energy rating is based on the characteristics of the building itself and its services (such as heating and lighting). This type of rating is known as an asset rating.

The asset ratings will reflect considerations including the age and condition of the building. It is accompanied by a recommendation report, which provides recommendations on using the building more effectively, cost effective improvements to the building and other more expensive improvements which could enhance the building’s energy performance.

The EPC rating is based on a number of assumptions as to how a typical occupier might use energy in a particular building. This of course does not mean that every potential occupier might use the building in the same way. Some may use the services in a building more intensively than others. Therefore the EPC must be viewed as a comparative, rather than a definitive guide.

The Recommendations Report

The EPC will also have an accompanying recommendations report, which will suggest a range of improvements that can be made to reduce that building’s carbon footprint. Some measures will be more cost effective than others.

What about future buildings?

It is intended that by 2019, all new non domestic buildings will be “carbon neutral”. However, the definition of this has not been agreed yet. To put all of this in context, Government has made legally binding commitments to reduce the UK’s carbon footprint by 80% by 2050 (based on 1990 levels). Therefore there will be an increasingly stark contrast in the carbon footprint, between future buildings and the existing building stock. The EPC will therefore be able to give a simple guide to potential occupiers as to where a particular building falls within that spectrum of energy efficiency.

What Government policies are in place to encourage us to lower carbon footprints?

For some time now, Government has been actively encouraging us to update the insulation on all types of buildings possible, so that we don’t unnecessarily waste heat. There are also the Feed In Tariffs (FITs) which are (at the time of writing) being rolled out across the renewable energy sector. So for example there are currently excellent incentives available for photovoltaic systems. A similar scheme is due to be announced for renewable heat to commence April 2011, subject to Government confirmation.

These are some of the incentives that are available. What we don’t know about is the potential policy sticks, which would encourage us to invest in our buildings to improve the EPC ratings and lower the carbon footprint, and therefore the potential energy bills.

Summary

Government policy is evolving and is trying to actively encourage us to:

1. Waste less energy
2. Use energy more efficiently
3. Generate more low carbon energy using solar or wind etc.

In essence, occupiers are being encouraged to understand how our buildings work, rather to walk in, turn on the lights, air conditioning etc, and to pay the bill, without linking usage with the cost, both carbon and financial.

If you require any information about EPCs, or which renewable energy technologies might be suitable for your own uses, please feel free to contact us