In 2018 under the Conservative government, a new legal standard for minimum energy efficiency was applied to rented commercial buildings, making it unlawful to rent or lease a commercial property with an Energy Performance Certificate (EPC) rating below an E. From 1 April 2023, the rules covered all privately rented non-domestic properties.
Despite the current minimum rating of an E required for commercial buildings, organisations should expect even higher requirements in the future. Under the new Labour government, we are expecting an updated consultation to be launched by the end of the year, including that by 2030, the minimum standard is expected to rise to a C. If organisations fail to meet these standards, they will not be able to continue to lease their buildings and could receive financial penalties for non-compliance if they do.
How can an organisation meet MEES compliance?
The first step for any organisations looking to comply with MEES, is to gain a Commercial Energy Performance Certificate (EPC), for its buildings.
This will give you an understanding of the energy efficiency rating and whether your organisation needs to make changes to become more energy efficient. This will be required if your building is rated lower than an E currently, or lower that a C rating in the future.
Why is MEES important for organisations?
To take a building’s energy rating from an E to a C, will be a difficult task to meet over the next five years. With the new Labour government’s commitment to green policies, we could even see further changes out of the upcoming consultation.
Organisations complying with MEES will be forced to put energy efficiency front and centre of their estates. MEES will mean that organisations will have to improve their buildings’ energy efficiency. As part of the UK Government’s commitment to reach net zero emissions by 2050, MEES plays a vital role in encouraging organisations to make their properties more sustainable.
The increase in rating requirements under the MEES regulations can have positive impacts for organisations, including cost saving and energy bill reduction for tenants, reducing carbon emissions and improving the value of their buildings.
By working now to increase your buildings’ energy efficiency to ensure you can meet the expected changing MEES regulations by 2030, you can guarantee you have access to EPC assessors and contractors to make energy efficiency changes to your properties while there is still availability, whilst also enhancing your organisation’s reputation as you demonstrate yourself as a leader in sustainability.
What are the risks of non-compliance?
There is currently a financial penalty for non-compliance which is based on 10-20% of the rateable value of the property up to a maximum of £150k per breach. The landlord in breach could also be published on a public register giving details of the breach.
There are currently some exemptions from the regulations:
- If the consent of a third party is required to carry out works but this is refused (such as a local planning authority)
- When improvements would result in a devaluation of the property by 5% or more or that the works would damage the property
- When all cost-effective improvements have been carried out, but they do not result in an EPC rating of E or higher
- Where the cost of purchasing and installing a recommended efficiency improvement would not meet the 7-year payback test.
- Exemptions require registration in advance on a government register and need to be renewed at least every 5 years.
With the potential changes to MEES regulations approaching, now is as good a time as any to start making changes to improve your buildings energy efficiency. With a wide range of benefits to your organisation, you can reap the rewards sooner rather than later by starting early.