Commercial EPC Update: EPC B by 2031 for Larger Premises

What has Been Announced

On 18 June 2026, the Department for Energy Security and Net Zero (DESNZ) published Written Statement HCWS126, setting out the Government’s interim response to the 2019 and 2021 consultations on strengthening Minimum Energy Efficiency Standards (MEES) in the non-domestic private rented sector in England and Wales.

The headline change for holders of Commercial EPCs is a revised and more targeted approach. From 2031, privately rented non-domestic buildings over 1,000 square metres will be required to hold an Energy Performance Certificate rating of at least EPC B, where cost-effective. Buildings below 1,000 square metres will continue to be subject to the existing EPC E minimum standard, with no set deadline for going beyond this level.

Initial Government modelling suggests that lifting the standard for the largest premises could save tenants in those buildings around £360 million per year on their energy costs by 2031.

How the Trajectory for Commercial EPCs Has Changed

From “EPC B by 2030 With EPC C by 2027” to “EPC B by 2031 for Larger Premises Only”

The original direction of travel, confirmed in the 2020 Energy White Paper and the subsequent 2019 and 2021 consultations, proposed that all privately rented non-domestic buildings should reach EPC B by 2030, with an interim Commercial EPC milestone of C by 2027 to keep landlords on track.

The interim response published on 18 June 2026 changes that picture in three important ways:

The interim EPC C milestone for 2027 will not be taken forward, giving landlords and tenants more time to plan investment and retrofit works in line with their lease structures.
The EPC B requirement will apply only to buildings over 1,000m², rather than the entire non-domestic stock, and the deadline has moved from 2030 to 2031.
Existing flexibility mechanisms, including the seven-year payback test and the established exemptions framework, will remain in place, so only improvements that are practical, affordable and cost-effective will be required.

The new EPC standard will only take effect following the successful passage of secondary legislation through Parliament, and a fuller Government response to the consultations is expected to follow.

Why it Matters for Holders of Commercial EPCs

Energy Performance Certificates have, since their introduction, served two purposes: a transactional disclosure at the point of sale or let, and a compliance benchmark under MEES. The 18 June 2026 announcement reinforces both roles for the larger end of the commercial market while easing the timetable for smaller premises.

In practice, for owners and managers of Commercial EPC-rated assets the update means:

Larger non-domestic landlords (>1,000m²) now have a confirmed policy direction of EPC B by 2031 to plan against, replacing the previously expected staged path through EPC C in 2027.
Smaller non-domestic landlords (<1,000m²) remain subject to EPC E with no set deadline for further uplift, though industry commentary has noted this position is unlikely to be the long-term endpoint.
Investors, lenders and occupiers will continue to use Commercial EPC ratings as a proxy for asset quality, transition risk and future capital expenditure, regardless of the regulatory floor.

Crucially, the EPC itself remains the trigger and compliance benchmark for the MEES regime. A landlord generally may not let, or continue to let, a commercial property with an EPC rating of F or G unless the property is improved to at least EPC E, or a valid exemption is registered and from 2031 the same logic will apply to EPC B for larger premises.

Industry and Regulatory Context

The Government has framed the revised approach as a balance between maintaining ambition for the largest, most energy-intensive premises and providing flexibility for SMEs and high-street landlords. DESNZ’s interim response notes that the policy is intended to support business investment, reduce exposure to volatile energy prices, lower energy demand from the non-domestic rented stock and strengthen UK energy security.

For organisations approaching renewal of a Commercial EPC, the practical implication is that the methodology, accuracy and underlying data behind each certificate matter more than ever both as a transactional document and as a baseline against which retrofit pathways to EPC B will be measured.

“Having supported Commercial EPC assessments and MEES compliance reviews across UK commercial portfolios for many years, our team sees this announcement as a meaningful shift. Larger commercial landlords now have something they have been asking for – a clear, single endpoint rather than a staged path through EPC C in 2027 and EPC B in 2030. For everyone else holding a Commercial EPC, the message is more subtle: EPC E remains the floor, but the certificate itself is increasingly the lens through which investors, lenders and occupiers read an asset. The organisations best placed to respond will be those treating each Energy Performance Certificate as the start of a retrofit conversation, not the end of a transactional one.”

Graham Paul, Service Delivery Director, TEAM Energy

Next Steps and Implications

The revised MEES standard for larger non-domestic buildings remains subject to secondary legislation, and DESNZ has indicated that further detail will be set out in its forthcoming full response to the consultations. Until then, the practical priorities for owners and managers of Commercial EPC-rated assets are:

Understand the portfolio. Identify which assets fall within the proposed 1,000m² threshold and what current EPC ratings show.
Review the quality of existing EPCs. Confirm that ratings reflect the building as it is operated today, not as it was at the point of last assessment.
Plan retrofit pathways to EPC B. Model the works needed to move from current ratings to EPC B by 2031, taking lease events, capital expenditure cycles and the seven-year payback test into account.
Track the legislation. Monitor the passage of secondary legislation and DESNZ’s forthcoming full response for the final detail on scope, definitions and enforcement.

AUTHOR:

Graham Paul – Service Delivery Director, TEAM Energy

Graham Paul is Service Delivery Director at TEAM Energy, with over twenty years’ experience in the UK energy sector. He leads service delivery, sales and marketing across TEAM Energy’s carbon and energy services portfolio, including Commercial EPCs, MEES advisory, SECR, ESOS and wider sustainability reporting. Graham works with organisations across the public and private sectors to translate regulatory change into practical, data-driven action, with a focus on customer experience and measurable outcomes.

Energy Performance Certificate (EPC)