Business Energy Glossary
What is an EPC (Energy Performance Certificate)?
An Energy Performance Certificate, almost always shortened to EPC, is the UK statutory rating of a building energy efficiency. The certificate shows a rating from A (most efficient) to G (least efficient) based on the building modelled energy consumption per square metre, plus recommendations for improvement. For commercial property (non-domestic) in England and Wales, an EPC is required whenever the building is sold, let, or built. The Minimum Energy Efficiency Standards (MEES) regulations restrict the letting of commercial property with an EPC rating below E, tightening progressively over time.
Commercial EPCs and MEES regulations have significant implications for property investors, occupiers, and landlords. Understanding the EPC framework matters for property transactions, lease negotiations, and energy improvement planning.
On this page
What an EPC shows
A commercial EPC shows:
- Asset rating (A to G). Indication of the building modelled energy efficiency, normalised to a standard occupation pattern.
- CO2 emissions per m². Annual emissions per square metre of floor area, based on the rating calculation.
- Technical inputs. Building fabric, heating, cooling, ventilation, lighting, and renewables.
- Recommended improvements. Priority order, indicative cost, and expected impact on rating.
- Building benchmark. Comparison to typical buildings of similar use type.
The EPC reflects the building as designed and constructed, not actual operational energy use. A separate Display Energy Certificate (DEC) shows operational energy use for some public buildings.
When an EPC is needed
An EPC is required for commercial property in England and Wales when:
- The building is sold.
- The building is let to a new tenant.
- A new building is constructed.
- The building undergoes major refurbishment requiring building control approval.
The EPC must be commissioned by the seller, landlord, or developer and made available to prospective buyers or tenants at the marketing stage. Failure to provide an EPC can result in fines from the local authority.
How EPC ratings are calculated
Commercial EPCs use the Simplified Building Energy Model (SBEM) or Dynamic Simulation Model (DSM) software approved by the UK government:
- The assessor surveys the building (fabric, services, occupancy zones).
- The data is entered into SBEM/DSM software.
- The software calculates modelled annual energy consumption per m².
- The result is compared to benchmarks to determine the asset rating.
- The software generates recommended improvements with cost and impact estimates.
The assessor must be accredited under one of the approved Accreditation Schemes (CIBSE Certification, Stroma, Elmhurst, or others).
MEES regulations
The Minimum Energy Efficiency Standards (MEES) restrict the letting of commercial property with low EPC ratings:
- Since 1 April 2018. Landlords cannot grant new leases on commercial buildings rated F or G.
- Since 1 April 2023. Landlords cannot continue to let commercial buildings rated F or G.
- Proposed 2027. Minimum rating tightening to C (subject to government consultation outcomes).
- Proposed 2030. Minimum rating tightening to B (subject to government consultation outcomes).
Non-compliance penalties range from £10,000 to £150,000 depending on the rateable value of the building.
Improving an EPC rating
Common improvements to lift a commercial EPC rating:
- Lighting upgrades. LED replacement of fluorescent or halogen.
- HVAC controls. Building Management Systems, zoning, occupancy controls.
- Heating replacement. Heat pumps replacing gas boilers or electric resistance heating.
- Insulation. Roof, wall cavity, and pipe insulation where accessible.
- Glazing. Replacement of single glazing with double or triple glazing.
- Renewable generation. Solar PV on suitable roofs.
- Air tightness. Sealing fabric to reduce uncontrolled air leakage.
The EPC report itself prioritises improvements based on cost-effectiveness for that specific building. The list is a useful starting point for retrofit planning.
EPC validity and exemptions
EPC validity and exemptions:
- EPCs are valid for 10 years from issue.
- Re-rating is voluntary mid-term; required at the next transaction trigger.
- Exemptions exist for places of worship, temporary structures, low-energy listed buildings, and some industrial buildings.
- MEES exemptions can be registered where improvements are not cost-effective (seven-year payback test), third-party consent is withheld, or improvements would damage the building.
Exemptions must be registered on the central PRS Exemptions Register and last five years.
an EPC (Energy Performance Certificate) FAQs
What is an EPC?
An Energy Performance Certificate, the UK statutory rating of a building energy efficiency on a scale from A (most efficient) to G (least efficient). Commercial EPCs are required when a non-domestic building is sold, let, or built in England and Wales.
When does a commercial building need an EPC?
When sold, let to a new tenant, newly constructed, or majorly refurbished requiring building control approval. The EPC must be made available at the marketing stage.
What are MEES regulations?
Minimum Energy Efficiency Standards. Since April 2023, landlords cannot let commercial buildings rated F or G. Proposed tightening: minimum C by 2027 and B by 2030 (subject to government consultation outcomes).
How long is an EPC valid?
10 years from issue. Re-rating is voluntary mid-term; required at the next transaction trigger (sale, new let, major refurbishment).
How is an EPC rating calculated?
Using SBEM (Simplified Building Energy Model) or DSM (Dynamic Simulation Model) software approved by the UK government. An accredited assessor surveys the building, enters the data, and the software calculates the rating, CO2 emissions, and recommended improvements.
How do I improve my EPC rating?
Common levers: LED lighting, HVAC controls, heat pump replacing gas heating, insulation, glazing, solar PV, and air tightness. The EPC report itself prioritises improvements specific to your building based on cost-effectiveness.
Are there exemptions from MEES?
Yes, including places of worship, temporary structures, low-energy listed buildings, and some industrial buildings. MEES exemptions can be registered where improvements are not cost-effective (seven-year payback test), third-party consent is withheld, or improvements would damage the building.
What is the difference between an EPC and a DEC?
An EPC reflects the building modelled energy efficiency based on construction and equipment. A DEC reflects actual operational energy use over the past year. DECs are required for some public buildings; EPCs are required for commercial property transactions and lets.