The government has confirmed that all non-domestic rented buildings will need to meet EPC Band B by 2030, and are now consulting on the framework to implement this requirement.

The Energy Efficiency (Private Rented Property) (England and Wales) Regulations (the ‘PRS Regulations’) initially set a Minimum Energy Efficiency Standard (MEES) of EPC Band E for private rented properties, which has applied to all new tenancies (including renewals) since April 2018, and from 1^st April 2023, will apply to all privately rented properties irrespective of whether there is a change to tenancy.

In October 2019, the Government consulted on proposals that would uplift existing MEES regulations, in order to set a new long-term regulatory target of EPC Band B by 2030 (or the highest EPC band a cost-effective package of measures could reach). This was an ambitious target that would drive clean growth and reduce emissions across non-domestic rental building stock.

There was widespread support in favour of this change, and following the release of a new Energy White Paper, the government has confirmed that this tighter long-term regulatory requirement will be put in place. This change will result in almost 1 million non-domestic buildings being cheaper to run, more energy efficient, and able to accept low-carbon heating systems. It is estimated to cover around 85% of the non-domestic rented stock, deliver up to 10.3TWh in energy savings by 2030, and 4.1MtCO2e of carbon (non-traded) over Carbon Budget 5 (2028-2032).

Implementation of new Minimum Energy Efficiency Standards – Consultation

The Government Department for Business Energy and Industrial Strategy (BEIS) has released a new consultation which makes proposals to improve the implementation and enforcement of the new EPC Band B requirement. The consultation can be split into four key areas:

1. Review of feedback received from consultation responses in October 2019 and BEIS Enforcement Pilot, and summarise the key concerns raised.

2. Outline of the proposed new framework for implementing an EPC Band B trajectory

a. Phase in the requirement with an interim milestone of EPC Band C in 2027 to ensure early action is taken by the market

b. Introduce a compliance window designed to simplify compliance and enforcement

c.Move away from enforcement at the point of let, and introducing a temporary 6-month exemption to address the challenges of compliance for shell and core premises

3. Proposals to strengthen enforcement and on amendments to existing exemption requirements to support the new framework.

a. Encouraging compliance by placing a requirement on letting agents and online property platforms to only advertise and let properties compliant with the PRS Regulations

b. Assisting local authority enforcement of the PRS Regulations

c. Tightening exemptions by amending the validity period of exemptions to require a review at each compliance window, and introducing a standardised payback calculator to determine cost-effective measures

4. Invite views on how smart meters could play a role in supporting landlords to meet the PRS Regulations as part of the next phase of smart meter rollout

Elmhurst’s Non-Domestic Team Leader, Josh Wakeling, has commended the government’s decision to implement this new long-term MEES target and is pleased to see them consulting on the best way to move forward with implementation:

“Following the release of the Implementation of the EPC Band B Future Target consultation, we are pleased to see the industry’s incredible support for the government’s preferred option for private rented non-domestic buildings in reaching the EPC Band B rating. We have always advocated that EPCs and the Minimum Energy Efficiency Standards have a vital role to play in helping the country achieve its net zero targets and it is excellent to see this being implemented.”

Next Steps

The Government is planning to publish the Government Response to this consultation, and the 2019 consultation later this year, and then lay amended regulations before parliament (which would officially amend the PRS Regulations).

The closure date for this consultation is 9^th June 2021.

To read the consultation document click here.