What are energy ratings for businesses? (EPCs) The ultimate guide
An Energy Performance Certificate (EPC) rates buildings on their energy efficiency. Ratings are given on a scale of A to G, with A being the most efficient and G being the least. A Non-Domestic Energy Performance Certificate (NDEPC) and a Recommendation Report (RR) have been a legal requirement for all non-domestic buildings under construction, on sale or up for rent since October 1, 2008.
If you’re looking to buy or rent a property, an EPC will give you an idea of how much you’ll need to spend on energy - the higher the rating, the more energy-efficient it is and the less you’ll spend on heating - and although EPCs are usually associated with domestic properties, all commercial properties should also have one.
30 Second Summary
- Energy Performance Certificates (EPC) are the official ratings for energy efficiency given to buildings. They were introduced by the government to reduce greenhouse emissions but are also used to show a building's energy efficiency. This is particularly important for future buyers or renters of a property.
- To get an EPC for a commercial building you need to go through an official energy assessor so you receive a valid certificate. They should be renewed every few years and be readily available if a building is built, rented or sold.
- EPCs rates are calculated based on the following factors: insulation levels, type of heating system, lighting installed, ventilation, age and construction of the building and if renewable energy is used. They are valid for 10 years.
- Your business might not need an EPC if it's in a temporary building that will be in use for less than two years, or if it's in a stand-alone building with less than 50 square metres. Other exceptions include industrial sites, workshops and non-residential agricultural buildings that don’t use a lot of energy.
- If you don't comply with the commercial EPC guidelines, you could pay up to a £50,000 fine.
What is a commercial EPC?
A commercial EPC rates non-domestic buildings on their energy efficiency. EPC regulations mean ratings are given on a scale of A to G, with A being the most efficient and G being the least energy efficient.
Why were EPCs introduced?
EPCs were first introduced by the government in an effort to improve energy efficiency in buildings and reduce greenhouse gas emissions. They also exist to make people aware of the amount of energy a building uses.
This is helpful if you are looking to buy or rent a commercial space for your small business. It gives an idea of how energy efficient the building is and how this could impact energy bills.
How to get an EPC for a commercial property
In order to get a commercial EPC, a commercial energy assessor will need to carry out an inspection of your property. The type of assessor you’ll need will depend on the complexity and features of the building. You can find a local, accredited, non-domestic energy assessor by visiting https://www.ndepcregister.com/searchAssessor.html
Your assessor can then carry out any of the following:
- Energy Performance Certificate (EPC) and Recommendation Report (RR)
- Display Energy Certificate (DEC) and DEC Recommendation Report (DEC-RR)
- Air Conditioning Inspection Report (AC-REPORT) and Air Conditioning Inspection Certificate (AC-CERT)
You can view the EPC and RR for any commercial property from the non-domestic EPC register by entering the postcode at https://www.ndepcregister.com/reportSearchAddressByPostcode.html
When do EPCs need to be provided?
EPCs should be provided if a building is built, rented or sold - and this applies to any home or business premises. EPCs need to be available for potential buyers or tenants to help with the decision making process. They then should also be renewed every few years to reflect the state of the building.
For example, if you decide to make your business premises, such as an office, more energy efficient, you may want to redo your EPC to show that it has a better energy performance and get proof with an official energy rating.
How are EPC ratings calculated?
There are several factors that are used to calculate a building’s energy efficiency rating. These include:
- Insulation levels
- Type of heating system
- Lighting installed
- Age and construction of the building
- If renewable energy is used
Using the areas above, officials consider the overall energy usage of the building and the C02 emissions it produces to give it a final assessment and rating.
Who carries out a commercial EPC?
Commercial EPCs for businesses can only be carried out by an official commercial energy assessor. This is because professional energy assessors have the expertise and qualifications needed to do a detailed assessment of your business premises. You’ll want to make sure you go with an assessor that is officially registered so your certificate is valid.
The type of assessor you need largely depends on the size and features of your building. If you are not sure which type of assessor to go with, you should speak to a commercial energy assessor to point you in the right direction. You can find the right assessor on the government website.
How much does a commercial EPC certificate cost?
You can expect to pay upwards of around £99 (correct as of October 2023) for a commercial EPC, but the cost will vary according to the type and size of the building that is being assessed.
In general, the simpler the use of a property, the lower the cost of the EPC - getting an EPC for a single space such as a warehouse should be cheaper than an office space that has been divided into workstations, meeting rooms and breakout areas.
How long is a commercial EPC valid for?
A commercial EPC is valid for 10 years. If your EPC expires, you’re only legally required to apply for a new one if you’re looking to renew tenancy agreements, create new tenancies or sell the property - a new EPC is not required simply because an existing EPC has expired.
If you are a commercial landlord, your property needs to meet certain EPC requirements and energy efficiency standards, regardless of whether or not your building needs a new EPC.
Do you need to display a commercial EPC?
If your business premises meets all of the three conditions below, then you’ll need to display your EPC by fixing it to the wall in a prominent area:
- The total useful floor area is more than 500 square metres
- The building is visited by the public
- An EPC has been produced for the building's sale, rental or construction
What is the minimum EPC for a commercial property?
Legal minimum energy efficiency standards (MEES) for commercial buildings were introduced in April 2018, as part of the Energy Act. Although F and G are still the lowest ratings available, if you’re looking to lease or sell a commercial property, it must have a rating no lower than E.
As of April 1, 2023, you must not continue to let any commercial properties that don’t meet an E on their EPC.
Are there penalties if you don't have an EPC?
If you don’t comply with the current commercial EPC guidelines, you could find yourself on the end of a hefty fine.
EPC Penalties are given to property owners or landlords who fail to provide a valid EPC to potential buyers or tenants using the building. And if your premises doesn’t meet the minimum standard of E or above, then you’ll likely face a fine. Penalties for non-compliance are based on the rateable value of a property:
- If a non-compliant property has been let for three months or less, the penalty is based upon 10% of its rateable value, from a minimum fine of £5,000 up to a maximum of £50,000.
- If a non-compliant property has been let for more than three months, the penalty is based upon 20% of its rateable value, from a minimum fine of £10,000 up to a maximum of £150,000.
If you try to get out of having an EPC by providing false or misleading information to the PRS exemption register, or you don’t follow a subsequent compliance notice, you can be fined up to £5,000.
What commercial properties are exempt from EPC?
Not all commercial buildings need an EPC certificate, and your property will be exempt if it falls into any of the following categories:
- A place of worship.
- A temporary building that will be in use for less than two years.
- A stand-alone building with a total useful floor space of less than 50 square metres.
- Industrial sites, workshops and non-residential agricultural buildings that don’t use a lot of energy.
In some cases, you might not need an EPC for business premises if your building is due to be demolished.
It’s also worth noting that regulations apply to tenancies of between six months and 99 years, and so holiday accommodation that’s rented out for less than four months a year or is let under a licence to occupy is also exempt
There is also a ‘devaluation’ exemption, which means you’ll not have to make any changes to your building if they will devalue it. All exemptions must be pre-registered on the exemptions register and will last for five years once registered.
Does a listed commercial building need an EPC?
If your commercial property is a listed building - meaning it’s of special architectural or historic interest considered to be of national importance and is listed on the National Heritage List for England - it doesn’t need a commercial EPC certificate if energy improvement requirements would 'unacceptably alter' the property's character or appearance.
How to improve an EPC rating
You may want to get ahead of future regulations that may come into play in the years to come and improve the EPC rating for your business. Or, if you need to improve the energy rating of your premises now to meet the minimum requirements, then here are some key steps to follow:
- Improve insulation - installing better insulation in walls, floors and roofs will stop heat from escaping and keep it in.
- Upgrade the heating - upgrading from old-fashioned boilers to modern heating systems like heat pumps can significantly reduce heat loss and improve energy efficiency.
- Use LED lighting - It sounds simple, but it’s often overlooked. Make sure you replace any traditional lightbulbs with energy-efficient lighting to lower your electricity usage.
- Install renewable energy systems - If you can, invest in upgrading to solar panels, mini turbines, biomass or hydro systems - if it’s suitable. This will mean generating your own energy and relying less on fossil fuels, which will also pay off in the long run.
- Get double glazing - If you don’t have it already, replacing single-glazed windows and doors with double or even triple glazing will prevent heat loss.
- Make ‘green’ rules - Make energy-saving rules and encourage your employees to follow them. This could be things like turning off lights, switches and computer systems when the day is over.
If you can’t afford to carry out all these steps, consider picking one or two that are achievable and start there - you’ll be well on your way to having a more energy-efficient business.
Why switch energy with Bionic?
Making sure your building's energy efficiency standards are up to scratch is a great way to save energy and cut the cost of your energy bills, but if you’re on an expensive commercial gas and electricity deal then the rates you’re paying will quickly eat into these savings.
That’s why it pays to get in touch with the tech-enabled experts at Bionic - we’ll compare deals from our panel to make sure your business is on the best rates from one of our trusted suppliers.
To start a quote, pop your postcode in the box at the side of the page, or give us a call on 0800 078 3494.