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Energy Performance Certificates (EPCs) and Energy Efficiency Ratings: what are they and what do they mean?

energy performance certificates

An Energy Performance Certificate (EPC) is required every time a property is placed on the rental or sale market. This article explains what is involved with commercial properties and why lenders, landlords, freehold investors and developers should see this part of their commercial property purchase and management as important.

Nearly all properties, regardless of purpose or age, are required to have an assessment of their energy performance. There are three elements to the certificate:

  1. the energy efficiency rating of the property;
  2. the estimated costs of running the property; and
  3. a summary of the performance of key features in the property and how they affect the energy efficiency of the property.

What does the Energy Performance Certificate (EPC) mean to a lender, landlord, freehold investor or developer?

As of March 2015, the Government have started to crack down on properties being let that are not fit for purpose. If a property doesn’t meet Grade E in its Energy Performance Certificate, you may not be able to let it. On the reverse, properties with a higher graded EPC may be able to achieve a higher rental yield.

You can read more about the Government’s Minimum Energy Efficiency Standard (MEES) here.

Energy Efficiency Rating

The energy efficiency rating is an overall efficiency measure for the entire property, taking into consideration all elements of the property’s energy saving mechanisms. It is rated in Standard Assessment Procedure (SAP) points, from the worst performing properties at grade G, through to the most energy efficient properties graded at A.

Here is an explanation of how the grading scale works:

Grade A 92-100 SAP points
Grade B 81-91 SAP points
Grade C 69-80 SAP points
Grade D 55-68 SAP points
Grade E 39-54 SAP points
Grade F 21-38 SAP points
Grade G 1-20 SAP points


Environmental impact (CO2) rating

As with the energy efficiency rating, the property is assessed on its impact on the environment, based on the amount of CO2 it emits. The worst performing properties are at Grade G and the best at grade A.

Grade A 92-100 SAP points
Grade B 81-91 SAP points
Grade C 69-80 SAP points
Grade D 55-68 SAP points
Grade E 39-54 SAP points
Grade F 21-38 SAP points
Grade G 1-20 SAP points


How do Standard Assessment Procedure (SAP) points work?

SAP points are calculated through assessing the amount of energy a property will consume when it is being used for its purpose. It’s based on standardised assumptions for occupancy and behaviour and allows for a comparative measurement for all properties in relation to their energy efficiency performance. You can find more information on how this is calculated here.

Estimated costs of running the property

This part of the Energy Performance Certificate (EPC) gives an estimated cost for how much it would cost in the property’s current state to run it for its purpose, based on assumptions of usage. This will also estimate the amount of money you could save should you make improvements to the energy efficiency of the property.

Summary of energy performance related features

Your property will be graded on its building materials, lighting, ventilation, insulation, windows, central heating and hot water systems as part of the Energy Performance Certificate (ECP). Each element will be graded using a five-star mechanism, with the best equipment for energy efficiency ranked at five stars, and the worst performing rated at one star.

Recommended measures to improve energy efficiency

The ‘recommended measures’ section will conclude all the above findings and summarise what you can do to improve the property’s energy efficiency. Some recommendations can be cost-effective, others might not be as beneficial. If you are uncertain, seek further professional advice on the benefits of improving the property prior to investing in improvements.

What should I do if I disagree or have a question about my property’s Energy Performance Certificate (EPC)?

There is a section in the Energy Performance Certificate itself called ‘Administrative Information ’, which should contain contact information about the energy assessor who carried out the investigation. This should be your first port-of-call for enquires and disagreements. If this method is unable to resolve your situation, you should contact the accreditation scheme, the details for whom should also be in the ‘Administrative Information ’ section of your Energy Performance Certificate (EPC).

If you have any questions regarding the impact of Energy Performance Certificates on the purchase or rental of your commercial property, contact our Property team on 01332 340 211.

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