UK: The New Energy Performance Regime In England And Wales

Last Updated: 11 December 2007
Article by Peter Williams and Michelle T. Davies

New requirements for ascertaining and displaying the energy requirements of the UK's buildings start to take effect in April 2008. The UK is required to do this to comply with Articles 7 to 10 of the EU Energy Performance of Buildings Directive. This article covers the law as it applies to England and Wales only, and only in relation to commercial buildings.

The new requirements apply in four distinct areas:

  • Energy performance certificates (EPCs), together with recommendations for improvement of the energy performance of buildings, have to be produced when buildings are constructed, sold or rented out.
  • Display energy certificates (DECs) have to be displayed in larger buildings occupied by public authorities and by institutions providing public services to, and visited by, a large number of persons. Advisory reports, with recommendations for improvement of the energy performance of the building, have to be produced
  • Air-conditioning systems have to be inspected at regular intervals not exceeding five years.
  • Energy assessors carrying out the inspections and producing the certificates have to be accredited.

Breach of the regulations will be a civil offence. Penalties are: for failure to provide an EPC, from £500 to £5,000, for failure to display a DEC, £500; and for failure to have an air-conditioning system inspected, £300. The regulations do not apply to places of worship, temporary buildings and buildings that are to be demolished.

Both EPCs and DECs will show the rating of a building on a scale of A to G (A being good and G being poor). An EPC will be valid for ten years or (if earlier) the date on which the owner obtains a more recent one. A DEC will only be valid for one year. Both certificates will need to be accompanied by reports recommending ways in which energy performance can be improved, although no-one will be under any duty to act on them.

Responsibility for the production of EPCs rests with building owners. Owners must make certificates available, at their own cost, to any prospective buyer or tenant at the earliest opportunity and, in any event, before entering into any contract to sell or rent the building. In practice, this means that EPCs must be available before the building is first advertised or marketed.

One particular issue that is exercising building owners is what triggers the duty to obtain an EPC where a building is multi-let. Will a single letting, or even the assignment of an existing lease, trigger an obligation to obtain an EPC relating to the whole building? No-one is yet certain and we have to await guidance promised by the Government.

Similarly, is it possible that a tenant of part of a larger building could invalidate a landlord's EPC for the whole building, if the tenant commissions an EPC of their part?

Another difficulty is the sheer number of EPCs and DECs that will be required starting in early 2008. The launch of home information packs was delayed by the absence of sufficient energy assessors, and it is possible that commercial transactions will be delayed for the same reason.

There is a complicated commencement timetable:

  • from 6 April 2008, EPCs will be needed on the sale and letting of commercial property with a floor area of over 500 sq. m., and the construction of all types of commercial property;
  • again from 6 April 2008, DECs will be required for all buildings with a floor area of over 1,000 sq. m. that are occupied by the public sector and routinely visited by the public;
  • from 1 October 2008, EPCs will be required for all commercial and residential property that is sold or rented out; and
  • for air-conditioning, a first inspection of air-conditioning system with an output of more than 250kW must have occurred by 4 January 2009; for systems of more than 12kW, the date is 4 January 2011.

Some of the concerns about the workability of the new requirements include:

  • How long will it take to obtain an EPC, and how much will it cost? Experts have suggested that the cost of obtaining EPCs for complex multi-let buildings could run into thousands of pounds.
  • Will meaningful data be available to experts engaged to produce DECs and air-conditioning system reports? Currently many organisations do not collect or monitor energy consumption data, which will require new organisational structures and data capture systems to be put in place.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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