The UK cracks the whip on minimum energy efficiency for buildings

The UK government is cracking the whip on private rented buildings over 1000 square metres, confirming that from 2031, these buildings will need to reach a higher standard of energy efficiency. And the UK’s Better Buildings Partnership is in full agreement.

Better Building Partnerships said on social media that this was a “critical piece of regulation” that “couldn’t be more welcome” and “provides much needed certainty for the market”.

“Through engagement with our members, we know that MEES are already an important mechanism for driving investment in commercial buildings, and this will provide further confidence concerning the future trajectory for investors and owners.”

The announcement comes from the government’s interim response to its 2019 to 2021 consultations with the industry on strengthening non-domestic MEES (minimum energy efficiency standard) in England and Wales. Buildings in this category will need to reach energy performance certificate (EPC) B, “where cost effective”.

In the UK, EPC ratings are used to gauge the energy efficiency of a building, rated on a scale from A, most efficient, to G, least efficient. The rating generally takes into account heating systems, insulation, and windows, and it is legally required for properties being built, sold or rented.

The changes to raise MEES to EPC B for larger buildings will only take effect once the legislation passes through Parliament.

The government said it will help tenants in the largest rented buildings save energy and reduce their energy bills by £360 ($A688) million a year by 2031 and protect them from future energy shocks.

However, there are loopholes.

The government also confirmed that buildings below 1000 sq m will continue to be required to meet current minimum standards of EPC E. However, it will not move forward with its previously proposed interim EPC C milestone for 2027, saying it was “giving landlords and tenants more time to improve the efficiency of their buildings in a way that suits their buildings and lease agreements”.

The government also confirmed that existing flexibility mechanisms, including the seven-year payback test and exemptions, will remain in place to ensure that “only improvements that are practical, affordable and cost-effective will be required”.

The seven-year payback test is a mechanism within MEES regulations, which states that landlords are entitled to exemptions from making energy efficiency improvements if the measure does not pay for itself through energy savings in seven years. This method isn’t without criticisms.

UK energy surveyor and accreditors Elmhurst Energy said that while it was designed to protect landlords from “disproportionate costs”, this methodology was “overly complicated, time-consuming and unclear, especially for those with non-standard building types or limited budgets”.

The government said further details on the proposal and implementation will come out with the full government response to the public consultation, which currently has no set date. It said it would introduce the legislation and updated guidance “at the earliest opportunity” and is “working with stakeholders to get the details right”.

The BPP said: We look forward to the full response to the consultation and stand ready to support the government in getting the detail right to ensure that this ultimately delivers better, more energy efficient, buildings.”