This article considers two recent consultations that have taken place on Proposed Energy Reforms.
The current Minimum Energy Efficiency Standards (MEES) Regulations came into force in 2018. These require all rental properties to have an Energy Performance Certificate (EPC) with a minimum rating of E.
The Government’s consultation on the reform of the Energy Performance of Buildings (EPB) framework took place at the end of last year through until early this year.
MEES Consultation on Commercial Buildings
The consultation on Minimum Energy Efficiency Standards for Non-Domestic Buildings in 2019 sought to ensure that privately rented non-domestic buildings in England and Wales would require an EPC B rating to be legally let by 2030. There was a white paper and further consultation issued on 17 March 2021 with responses due by 9 June 2021, setting out proposals to ensure that the policy could be delivered. However, the Government’s long-awaited response to the consultation remains unpublished.
Consultation on the Energy Performance of Buildings (EPB) considering the current Government’s Net Zero targets
The Government’s “Accelerating to Net Zero: responding to the CCC Progress Report and delivering the Clean Energy Superpower Mission” highlights the importance of net zero and clean energy and outlines the case for change.
The Reforms to the Energy Performance of Buildings Regime Consultation (Consultation) was published just before the Government’s “Accelerating to Net Zero” report and highlights the direction of travel as the Government identified that reforms are integral to managing energy performance of buildings whilst achieving national goals, including reaching net-zero emissions by 2050. The Consultation period was from 4 December 2024 to 26 February 2025.
The Consultation acknowledges that Energy Performance Certificates (EPCs) are now used widely beyond their original scope as a measurement tool for assessing the performance of buildings. EPCs are now used as the basis for energy efficiency targets, for regulatory requirements for MEES, for the Private Rented Sector (PRS) and as an eligibility requirement for funding such as in the Warm Homes: Social Housing Fund (WH:SHF).
Buildings account for around 20% of the UK’s total greenhouse gas emissions. A significant change in the way domestic and non-domestic buildings use energy is required for the government to reach its net zero commitments.
The Consultation outlines the Government’s proposal for a reformed EPB Framework which:
- provides homeowners and tenants with accurate information about the energy performance of their homes to allow them to make informed investment and purchase decisions
- provides accurate information to determine eligibility for schemes and measure progress against government targets
- provides an information tool to support a range of actions including reducing carbon emissions, tackling fuel poverty, improving decency and the Warm Homes Plan
- reflects the needs of wider users of EPCs beyond homeowners and tenants, such as suppliers of energy efficiency products and services, as well as lenders
The Government anticipates that these actions will result in an EPB Framework which can deliver a more efficient and effective energy efficiency certificate system.
In summary, the proposed reforms would impact energy performance certificates, display energy certificates and air conditioning inspection reports.
The Government invited comment on whether the EPC validity period should be reduced. It is also considering whether there should be a valid EPC throughout the tenancy.
There may also be changes to compliance requirements as well as the penalties for non-compliance. The current penalties have remained stagnant since 2007 and may be increased.
Where are we now?
MEES Consultation
We are still awaiting the Government’s formal response to the MEES consultation which ended on 9 June 2021. It is on commercial buildings is expected to be published later this year. We anticipate that commercial MEES will be raised to a minimum EPC rating of B after 2030, but before 2035.
The formal response is crucial so that landlords know what they will need to do to ensure compliance with the new regime. It is likely that many landlords will need to invest significantly into improving the energy efficiency of their buildings over the next few years to meet the deadline for complying with the EPC B threshold.
Landlords will need to look at the specific terms of their leases to see if they can recover any of the costs of these works from their tenants. They would also be advised to consider the end dates of the current tenancies to see if they can align works with the end of tenancies.
Landlords may also consider commissioning new EPCs where their current EPCs were granted before 2022. Surveyors indicate that commissioning new EPCs can lead to an improved rating without the need for capital expenditure because the change in calculation methodology can lead to an improved rating.
We will update you with the Government’s response to the MEES consultation when it is published.
EPB Consultation
There is an overlap between the MEES Consultation and the EPB Consultation, the scope of the latter being broader as it covers commercial and domestic buildings.
The Energy Saving Trust and The UK Green Building Council, amongst others, have provided useful responses to the EPB Consultation.
We are still awaiting the Government’s response to the EPB Consultation and as with the MEES consultation. The Government has not yet confirmed when it will provide its response to the consultation responses but we anticipate that it will be in the next few months and we will update you when it is available.
In the meantime, both commercial and residential landlords should be aware that in the future, they will need to comply with more stringent statutory requirements for their properties to be more energy efficient. Landlords are advised to consider if there are steps that they can take now to assist with this transition.
