Energy Performance Certificates (EPCs) were introduced in England and Wales in 2007 and in Scotland and Northern Ireland in 2008. They are frequently required for both commercial and residential properties.
A commercial EPC will be necessary if you are considering selling your business or renting out a commercial building, whether that’s an office, hotel, retail unit or warehouse.
This guide explains all you need to know about how commercial EPCs work.
What is an EPC?
An EPC – or Energy Performance Certificate – is a document that informs prospective buyers or tenants about the energy efficiency of a property, as well as what its carbon dioxide emissions are likely to be. The rating scale used runs from A to G, with A being the most efficient and G being the least.
EPCs include information about how expensive the property will be to heat and light, as well as recommendations on how to improve the energy efficiency of the building and reduce the cost of business energy bills. It will also indicate how the EPC rating could change if those recommendations are followed.
When might I need a commercial EPC?
You’re legally required to have a commercial EPC if you are a landlord and plan to rent or sell a business property or if a building under construction is now finished. The EPC must be provided free of charge to prospective buyers or tenants.
So long as an existing EPC is still valid (EPCs last for 10 years) and there have been no major changes to the building, a new commercial EPC will not be required each time there is a change of tenancy or the property is sold.
But if a building has had a change in use, it has been converted into fewer or more units for separate occupation, or there have been changes to the heating, hot water, air conditioning or ventilation systems, you’ll need to obtain a new EPC to ensure it fully represents the property being sold or let.
What happens if I do not obtain a commercial EPC?
If you do not make an EPC available to a prospective buyer or tenant, you can be fined between £500 and £5,000 based on the rateable value of the property.
You’ll need to display your EPC by fixing it to the property if the total useful floor area is more than 500 square meters and the building is regularly visited by the public and an EPC has already been produced for the building’s sale, rental or construction.
If you receive a fine for not having an EPC and believe this to be unfair, you can choose to appeal and ask for a review – the details of which can be found on your penalty notice charge.
If your review is not successful, you can appeal to the county court (or sheriff court in Scotland), so long as you do so within 28 days of receiving your confirmed penalty.
Are there any exemptions?
You won’t need to apply for an EPC if you can demonstrate that the building is any one of the following:
due to be demolished, providing all the relevant planning and conservation consents are in place.
A building will also not require an EPC if all of the following apply:
planning permission has been applied for by the buyer or seller to demolish it.
Is there a minimum EPC rating requirement?
In April 2018 new regulations came into force stating that if you want to lease a commercial property to a new tenant or renew a lease with an existing tenant, the property must have an EPC rating of ‘E’ or above.
Properties with ratings of ‘F’ or ‘G’ cannot be leased until you have taken steps to improve the building’s energy efficiency and increase the rating.
As of April 2023, these rules will apply to all leases, including those already in place. Rental properties will also likely need to have at least a ‘D’ rating by 2025, and at least a ‘C’ rating by 2030.
How do I obtain a commercial EPC?
Commercial EPCs can only be issued via an accredited commercial energy assessor. The easiest way to do this is to complete the form on the Non-Domestic EPC Register. The type of assessor required will depend on the complexity and features of the building.
An assessor will then need to visit the property to look at the energy efficiency of the lighting and windows, whether it has cavity wall and loft insulation, the type of ventilation it uses, as well as heating systems and controls.
How much does a commercial EPC cost?
The cost of a commercial EPC will depend on the building being assessed, but you can expect to pay anywhere between £100 and £200, plus VAT.