The UK Government intends to reform Energy Performance Certificates (EPCs) so that they give a fuller picture of building performance to drive EPC compliance. Here’s what every small business needs to know.
What are the reforms to EPCs?
In 2024, there was a consultation about what Energy Performance Certificates should measure and when they should be required. A partial response to the consultation has been published on the UK.gov website (the full response is due in 2026). Here is what we know so far: there will be four new headline metrics for domestic EPCs while the existing headline metric for non-domestic EPCs will remain in place.
Energy Performance Certificates for domestic properties
For domestic properties, there will be four new metrics to measure: energy cost, fabric performance, heating system, and smart readiness. Smart readiness is a building’s capacity to use technology like smart meters, solar panels, battery storage, heat pumps, automated heating controls, etc. Smart technology is used to improve energy efficiency, adapt to an occupant’s needs and respond to grid signals e.g. using energy during low cost periods.
It is likely that EPCs will need to be renewed more frequently, so that improvements to buildings are recorded sooner and buyers or tenants get more current information. The new legislation will only apply to you as a small business if you operate from your home and it is considered a residential property. Residential lets also fall under domestic EPCs, so if you let all or part of your property the new EPC rules apply.
Environmental Impact Ratings for non-domestic properties
Any non-domestic property, e.g. a commercial warehouse, shops, and offices still need Environmental Impact Ratings (EIRs) which are a carbon based metric that models CO2e emissions per square metre. EIRs are measured using the National Calculation Methodology for non-domestic buildings which simulates a building over a year under standard assumptions and converts estimated regulated energy use and carbon emissions into a rating scale – from 1-150 for commercial buildings. A poor rating can make a commercial building harder to rent, sell or keep compliant with energy efficiency rules. A better rating will support lower operating costs and easier sale or rental of the property.
The government says it will bring forward regulations in 2026, subject to parliamentary approval, before introducing new-style domestic EPCs. The further response is expected to follow on the remaining consultation topics: Display Energy Certificate (DEC) validity, EPC and DEC data, EPC quality, Air-Conditioning Inspections Reports and more. A Display Energy Certificate (DEC) shows the actual energy consumption of a public building based on meter readings over the past year.
Why do we need to change Energy Performance Certificates?
The new policies are meant to support the government’s net zero strategy. They are intended to reduce fuel poverty, improve building standards and make it easier to assess eligibility for energy-efficiency schemes. The new requirements will move EPCs away from a single simple rating and provide a more detailed tool to inform decisions about retrofitting, ensure compliance and ease property transactions.
At Blue Patch we are always encouraging our community of sustainability-minded businesses to improve their energy efficiency whether they work from home or in a commercial building. This can include reducing energy costs with more efficient and less carbon intensive solutions, like LED lighting, installing or purchasing energy from renewable suppliers for heating, and insulating buildings. We also promote smart meters as a useful measure of energy use.