GN 4.2: Energy performance standards
Guidance Note purpose
The purpose of this Guidance Note is to provide information for asset managers, property managers and facilities managers in relation to the requirements of Energy Performance Certificates and Display Energy Certificates. Minimum Energy Efficiency Standards are also described as an additional reference.
Context
Energy Performance Certificates (EPC) and Display Energy Certificates (DEC)
Both EPCs and DECs provide a rating of a property’s energy efficiency through a grade range from A (best) to G (worst). The ratings are intended to allow owners and occupiers to compare the energy performance of different buildings or properties.
Whilst EPCs and DECs have a similar purpose, they rely on different inputs to calculate the energy rating. In general terms, an EPC is based on a theoretical model of the building, and a DEC is based on actual consumption data.
An EPC is required when a building is constructed, majorly renovated or marketed for sale or letting. In order to be valid, the certificate and recommendation report must be lodged with the online registry.
There are some buildings which are exempt from requiring an EPC, these include:
- Places of worship.
- Temporary Buildings.
- Stand-alone buildings with a floor area of less that 50 sq. m.
- Industrial and agricultural buildings with low energy requirements.
- Protected buildings where compliance with energy efficiency requirements would unacceptably alter their character or appearance.
- Buildings that are suitable for demolition.
DECs are required in England, Wales and Northern Ireland for all public buildings with a total useful floor area of over 250 sq m, that are occupied in whole or part by public authorities, and are frequently visited by the public. Although private organisations are not required to have DECs, they can be obtained voluntarily.
- For buildings over 1,000 sq.m, the current DEC, along with the two previous year’s ratings, must be prominently displayed.
- In Scotland, EPCs are generally required instead of DECs. However, a DEC can be used as a method of deferring any required Section 63 Action Plan improvements in relation to The Assessment of Energy Performance of Non-domestic Buildings (Scotland) Regulations 2016.
- In order to be valid, the DEC and Advisory Report must be lodged with the online registry. This is also true in Scotland, however there is a separate Scottish EPC Register.
Minimum Energy Efficiency Standards (MEES)
MEES were introduced by the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.
These regulations introduced a minimum required EPC rating of an E for rented property in England and Wales.
Why this is important
The desired outcomes of EPCs and DECs are broadly similar, but subtly different.
- A DEC is intended to raise public awareness of energy use and to inform visitors to public buildings about the energy use of the building.
- An EPC is intended to allow the energy performance of different buildings to be compared to allow tenants, purchasers, building users to make informed choices.
Stakeholders may often find a DEC more meaningful than an EPC as it measures performance based on actual energy consumption rather than theoretical performance, and therefore provides information on how efficiently a building is currently being operated.
There are a range of penalties for non-compliance with the requirements of EPCs and DECs. As of March 2021, these included:
- The penalty for failing to make an EPC available to a prospective buyer or tenant when selling or letting a commercial property is 12.5% of the rateable value of the building, with a minimum fine of £500 and a maximum of £5,000.
- Failing to have a DEC include:
- £500 for failing to display a DEC at all times in a prominent place clearly visible to the public, and
- £1,000 for failing to possess or have in control a valid advisory report.
Responsibilities & Interests
The table below summarises the key activities associated with energy performance standards, and highlights where asset managers, property managers and facilities managers are likely to have a responsibility or specific interest.
- AM - Asset Manager
- PM - Property Manager
- FM - Facilities Manager
Step 1: Understand whether an EPC or DEC is required
Stakeholder:
Step 2: Clarify responsibilities for EPCs and DECs
Stakeholder:
Step 3: Identify a registered EPC or DEC assessor
Stakeholder:
Step 4a: Collate the information required for a DEC
Stakeholder:
Step 4b: Collate the information required for a DEC
Stakeholder:
Step 5: Host site visit by assessor
Stakeholder:
Step 6: Preparation and registration of either the DEC and advisory report or the EPC and recommendation report
Stakeholder:
Step 7: Display and retention of DEC and advisory report
Stakeholder:
How to
Related Guidance Notes
The following Guidance Notes contain related information:
- GN1.2: A compliance register
- GN3.1: Ratings and certifications
- GN4.5: Energy consumption profile
- GN4.6: Undertaking an energy audit
- GN4.12: Energy Performance monitoring
- GN11.2: Engaging occupiers
Additional Resources
- BBP Sustainability Bites? The Impact of Minimum Energy Efficiency Standards for Commercial Real Estate Lendingxx
- BBP Landlord Energy Rating Documentation
- EPC Buildings Register
- Guidance on PRS Exemptions and Exemptions Register Evidence Requirements
- Non-domestic private rented property: minimum energy efficiency standard- landlord guidance
- Scotland: Energy performance of existing non-domestic buildings: information