Over a quarter of Britain's commercial buildings not ready for 2027’s EPC crackdown

28% of commercial buildings are currently at risk of non-compliance ahead of changes to MEES regulations, warns Jones & Woolman.

Related topics:  EPC,  commercial,  MEES
Property | Reporter
10th November 2023
Energy Efficiency 123
"What’s concerning is that the current figures indicate that over a quarter would be at risk of non-compliance with MEES (minimum energy efficiency standards) if the proposed government plans to bring a minimum C rating come into effect"
- Matthew Jones - Jones and Woolman

As the UK speeds towards a net zero target, roofing experts Jones and Woolman UK are revealing that up to a quarter of the commercial property market could currently be at risk of not meeting 2027’s proposed C-rating target standard for energy performance.

Energy Performance Certificate ratings exist to rate a building’s energy efficiency from A* - G and are required for all commercial buildings at the point of construction, selling, or letting. In the context of commercial buildings, ratings are recorded for non-domestic building types such as retail units, centres, factories, and offices.

According to a study by Jones and Woolman UK of the latest government data on EPC ratings for 20231, 111,902 non-domestic lodgements were rated in the first three quarters of this year in England and Wales. Of these, the most common rating was a C, with 35.8% of buildings receiving this rating this year.

Matthew Jones, Sales Director at Jones and Woolman, warns: “MEES regulations are changing in the next three years, and owners and landlords of commercial buildings with a D or lower EPC rating need to act urgently on efficiency improvement and maintenance works to avoid penalties and financial loss."

Only 293 non-domestic buildings - or 0.26% - received the highest A* rating, and just 5% were rated an A, highlighting progress to be made in energy efficiency for buildings to reach the top end of performance. However, Jones and Woolman UK’s study has found an improvement year-on-year to 2022 figures; A* - C ratings account for 72% of all ratings in 2023 to date, which is a significant increase against 2022, where just 66% received A* - C EPC ratings.

Matthew predicts how many are at risk of non-compliance by 2027: “The EPC ratings for the year so far are a good indicator of the state of the commercial buildings across Britain and how they are faring in energy efficiency.

"But what’s concerning is that the current figures indicate that over a quarter would be at risk of non-compliance with MEES (minimum energy efficiency standards) if the proposed government plans to bring a minimum C rating come into effect.

"Over 30,000 commercial buildings were rated D - G so far this year, which accounts for 28% of the non-domestic ratings recorded in 2023. Significant support and change is needed to upgrade these buildings’ roofs, insulation and renewable energy sources to become more efficient in the coming years.”

Commercial buildings energy performance (2022 vs 2023)

For non-domestic (ND) buildings in the study, here is how the Q1-Q3 2023 EPC ratings fare compared to annual 2022 figures:

Rating No. of buildings with the rating - 2022 % of overall ND buildings - 2022 No. of buildings with the rating - 2023 so far % of overall ND buildings - 2023 so far
A* 198 0.18% 293 0.26%
A 4,488 3.97% 5,617 5.02%
B 27,899 24.68% 34,436 30.77%
C 41,630 36.83% 40,037 35.78%
D 25,221 22.31% 20,704 18.50%
E 11,730 10.38% 9,703 8.67%
F 869 0.77% 515 0.46%
G 992 0.88% 597 0.53%

*Data contains England and Wales figures combined

How can buildings improve energy efficiency by the proposed 2027 target?

Matthew offers advice on commercial property EPC compliance for 2027: “From 1st April this year, it is an offence to continue to let or rent out a commercial property if it does not have a rating of at least at E, with a penalty based on the rateable value of the building between £10,000 to £150,000 per breach.

"And with likely penalties for non-compliance of an EPC rating of C or above in three years’ time, not only would a D rating or lower impact businesses financially, but it could also affect income and cause operational downtime during the completion of energy efficiency improvement works.

“There are many parts at play to improve a building’s energy efficiency. The key area we work with our clients on is their roofing performance, and in fact roofing upgrades and maintenance account for around 20% of our total work so far this year, compared to installation at the construction and design stage of new commercial buildings. Which in itself highlights the efforts being made to improve energy efficiency in the commercial building sector.

He concludes: “The holistic relationship of weatherproofing and the building envelope is crucial for a healthy and energy-efficient roof and building with a long lifespan. However, it’s not as simple as just upgrading a roofing system or adding renewable energy sources like solar PVs to a commercial building to improve an EPC rating.

"It requires a much more thorough approach and analysis of the building in the context of its function and age. We are urging commercial building landlords and property owners to consider their current rating and assess improvement works needed sooner rather than later, with so many (a quarter) facing the challenge of being C or above in the next three to four years to remain operational.”

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