Our Guide to Demystifying Commercial EPCs



Energy Performance Certificates (EPCs) have become an essential part of commercial property transactions in the UK.

These certificates assess the energy efficiency of a building and provide valuable insights for businesses looking to reduce their environmental impact and operating costs.

Understanding EPC Ratings:

Commercial EPCs use a letter grade system, ranging from A (most efficient) to G (least efficient), to indicate a building’s energy performance. The certificate also includes recommendations for cost-effective improvements that can enhance a building’s energy rating.

Current UK Law on Commercial EPCs:

As of April 1st, 2023, the following regulations apply to commercial EPCs in the UK:

  • Mandatory EPC Rating: All commercial properties rented or sold must have a valid EPC with a minimum rating of E. This applies to new leases, existing tenancies, and building sales.
  • Objective: This legislation aims to incentivise landlords to invest in energy-efficient upgrades for their commercial buildings. This can be achieved through upgrades like better insulation, energy-efficient lighting, and modern heating systems.
  • Enforcement: Failure to comply with EPC regulations can lead to fines for landlords. The amount can vary depending on the rateable value of the building, ranging from £500 to £5,000.

Rule changes coming into effect

Here’s a breakdown of EPC changes due to MEES regulations in the UK, including the distinction between existing and new tenancies:

Current Situation (April 2023):

  • All tenancies (existing and new): Minimum EPC rating of E is required for letting a commercial property. Landlords cannot grant new tenancies or continue existing ones if the EPC falls below E, unless a valid exemption applies.

Upcoming Changes:

  • April 2025:
    • All tenancies: Landlords of all non-domestic rented buildings must have a valid EPC for their property.
    • New tenancies: The minimum EPC rating for granting a new tenancy of a commercial property increases to C.
  • April 2027:
    • All tenancies: The minimum EPC rating for all tenancies (both existing and new) of commercial properties increases to C. Landlords must ensure their properties meet this new rating or register a valid exemption.

Beyond 2027:

  • The government aims for all non-domestic rented buildings to achieve an EPC rating of B by April 2030. Specific compliance steps for existing and new tenancies to achieve this are yet to be confirmed.


Exceptions to Mandatory EPCs:

While most commercial properties require an EPC, there are some exemptions:

  • Buildings slated for demolition
  • Temporary buildings (less than 2 years lifespan)
  • Detached buildings under 50sqm (excluding dwellings)
  • Places of worship
  • Industrial sites, workshops, and agricultural buildings (with minimal energy demand) –  NB – The definition of “minimal energy demand” can be complex and may vary depending on specific circumstances)

When is an EPC Required?

An EPC is mandatory in specific situations:

  • Construction, Sale, or Rental: An EPC is required whenever a building is constructed, sold, or rented out.
  • This applies to the entire building or any designated section that functions separately with its own climate control system.




Building Definition:

For EPC regulations, a building is defined as:

“a roofed construction having walls, for which energy is used to condition the indoor climate, and a reference to a building includes a reference to part of a building which has been designed or altered to be used separately”.

This clarifies that EPCs are not just for entire buildings, but also for designated sections within a larger structure that have their own heating and cooling systems.

What Determines EPC Requirement?

Several factors influence whether a building requires an EPC:

  • Presence of Climate Control Systems: The building must have a roof, walls, and use energy for heating, mechanical ventilation, or air conditioning to fall under EPC requirements. Hot water and lighting don’t trigger the need for an EPC.
  • Planned Installation: If a building is expected to have these climate control systems installed in the future, an EPC might be based on the assumed fit-out based on building regulations.
  • Separate Occupancy: An EPC can be required for a designated part of a building designed or altered for separate use, even within a larger structure. This typically involves separate access and independent control over heating and ventilation systems.

Understanding EPC Types:

The type of EPC provided depends on the specific situation:

  • Reflecting Occupancy: The EPC should reflect the part of the building being sold or rented.

Additional Considerations:

  • Buildings can have various tenancy agreements and uses. The specific circumstances should be considered when determining EPC requirements.
  • If a building lacks fixed climate control systems but has the potential for future installation, the EPC might be based on the building’s use class and typical energy-intensive fit-out practices.

By understanding EPC regulations and the factors influencing their requirement, businesses and property owners in the UK can ensure compliance and contribute to a more sustainable future.