For commercial property owners in the UK, compliance with the Minimum Energy Efficiency Standards (MEES) is essential to achieving energy efficiency, reducing carbon emissions, and avoiding potential penalties. In this article, we provide an insightful overview of what commercial real estate owners need to know about MEES compliance, including key requirements, strategies for achieving energy efficiency, and the potential benefits of aligning with these standards.
What are the Minimum Energy Efficiency Standards (MEES)?
The Minimum Energy Efficiency Standards (MEES) in the UK are regulations implemented to enhance the energy efficiency of commercial property and reduce carbon emissions in order to meet climate change targets. These standards are applicable to both residential and non-residential properties and aim to ensure that buildings meet certain minimum energy performance criteria.
A key component of the MEES is the Energy Performance Certificate (EPC), which rates the energy efficiency of a building on a scale from A (most efficient) to G (least efficient). All buildings, regardless of their purpose, are required to have an EPC. The certificate provides details about the building's energy efficiency and includes recommendations for improvements.
The MEES regulations specify a minimum EPC rating that properties must achieve to be considered energy efficient. Since April 1 2018, landlords of non-domestic rented properties have only been permitted to grant a new tenancy, or to renew an existing tenancy, if their property has had a minimum EPC rating of E, unless they have registered a valid exemption.
As of April 1, 2023, the requirement for non-domestic landlords to obtain at least an EPC E rating (unless they have registered a valid exemption), applies to all non-domestic rented properties, even when there has been no change in tenancy.
This means that landlords of “sub-standard” properties now have to either make sufficient energy efficiency improvements to bring the EPC rating to an E or above or register an exemption. Failure to meet these requirements could result in a fine of up to £150,000 per building.
What buildings do the MEES apply to?
The MEES applies to all domestic and non-domestic buildings, aside from the following exemptions:
- Buildings which are not required to have an EPC, such as industrial sites, workshops, non-residential agricultural buildings with a low energy demand, certain listed buildings, temporary properties and holiday lets
- Buildings where the EPC is over 10 years old or where there is no EPC
- Tenancies of less than 6 months
- Tenancies of over 99 years
What are the exemptions from complying with MEES?
Landlords can lease a building which is below the minimum standard if any of the following exemptions apply:
- ‘7 year payback’ exemption: Applies where the cost of purchasing and installing a recommended improvement does not meet a 7 year payback test (meaning the expected value of savings on energy bills that the measures are expected to achieve over 7 years are less than the cost of repaying it).
- ‘All improvements made exemption: Applies where all relevant cost-effective energy efficiency improvements have been made and the property still remains sub-standard
- Third party consent exemption: Applies where consent to make improvements is refused by a third party (such as local authorities or an incumbent tenant)
- Property devaluation exemption: Applies where making energy efficiency improvements would devalue a property by more than 5%
All exemptions are valid for a period of 5 years, and must be registered here.
What is the difference between an EPC rating, the BREEAM rating system and NABERS UK?
- EPC ratings are mandatory for most buildings in the UK, and primarily evaluate the energy efficiency of a building. They provide a standardised measurement of a building's energy performance, considering factors such as insulation, heating systems, lighting, and renewable energy usage
- The BREEAM rating system is a voluntary scheme that assesses a property’s environmental, social and economic sustainability performance. BREEAM covers a broader range of criteria beyond energy efficiency, including categories such as water usage, waste management, indoor environmental quality, ecological impact, and management processes.
- NABERS UK was introduced in 2020 as an adaptation of the highly successful sustainability rating program that operates in Australia and New Zealand. The Design for Performance rating system drives energy-efficiency in new buildings and NABERS Energy ratings measure how energy-efficiency existing buildings are.
What can building owners do to improve their EPC rating?
Landlords have various options to improve their EPC rating and ensure compliance with the MEES regulations. Here are some measures they can take:
- Insulation: Enhancing insulation is a key step to improve energy efficiency. Landlords can insulate walls, roofs, and floors to minimise heat loss or gain, thus reducing energy consumption.
- Heating Systems: Upgrading heating systems can significantly impact energy efficiency. Landlords can consider installing more efficient boilers or heating systems, such as condensing boilers or heat pumps, which use renewable energy sources.
- Lighting: Replacing traditional lighting with energy-efficient alternatives, such as LED bulbs, can lead to substantial energy savings. LED lighting consumes less energy, lasts longer, and emits less heat.
- Windows and Doors: Upgrading windows and doors to energy-efficient ones, such as double or triple glazing with proper seals, can minimise heat transfer and improve thermal performance.
- Heating Controls: Installing programmable thermostats and zone controls allows for better temperature management and reduces unnecessary heating or cooling.
- Renewable Energy Sources: Incorporating renewable energy technologies like solar panels or wind turbines can generate clean energy on-site, reducing reliance on traditional energy sources.
How can building analytics help landlords improve their EPC rating?
Building analytics platforms, such as CIM's PEAK platform, can be incredibly useful for landlords seeking to improve their EPC rating.
These software platforms collect and analyse data from various sources within a building, including energy meters, HVAC systems, and environmental sensors. By leveraging advanced algorithms and machine learning, these platforms provide landlords with valuable insights into energy consumption patterns, equipment performance, and potential areas for improvement. Moreover, the platforms can detect anomalies, inefficiencies or faults in equipment and systems that are contributing to energy wastage in the building. With specific recommended actions to take, landlords can promptly address these issues, optimise performance and reduce energy waste.
Additionally, building analytics platforms employ predictive maintenance techniques by analyzing historical data and equipment performance trends. By detecting patterns and indicators of potential failures or performance degradation, the platform can alert landlords to take preventive measures. This proactive approach minimises downtime, avoids costly repairs, and ensures that equipment operates optimally, contributing to energy efficiency improvements.
The platforms also provide real-time monitoring and reporting capabilities, allowing landlords to track energy performance metrics and EPC-related indicators. This enables them to assess the impact of energy efficiency measures, monitor progress towards compliance with MEES regulations, and generate reports for stakeholders or regulatory authorities.
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