In October, the Department for Business, Energy and Industrial Strategy (BEIS) launched a consultation seeking views on how best to improve the energy performance of non-domestic private rented buildings through tighter minimum energy standards. In it they proposed a preferred trajectory of reaching a minimum EPC rating of band B by 2030.
This proposal supports the government’s commitment to support businesses in reducing their energy use by at least 20% by 2030 and forms part of the UK’s wider commitment to bring all greenhouse gas emissions to net-zero by 2050.
The CLA has responded to the consultation and a copy of the response can be found here. In the response, the CLA highlights the unique challenge faced by rural commercial buildings given they are off-gas grid and mainly of traditional construction. Our main points include:
1. The current assessment methodology, the Simplified Building Energy Model (SBEM), does not assess the energy performance of traditional buildings accurately or recommend the most appropriate improvement measures, due to it having been designed for modern construction.
SBEM must be fundamentally reviewed. If the government is not prepared to do this, then rural traditional buildings must be exempt from the tightening measures.
2. Commercial units in rural locations do not have the rental growth potential that urban units do and are often let below market rent to support small rural businesses. As a result, landlords often do not have the capital to make the required improvements.
A funding package must be available to rural landlords. If funding is not available, then the seven-year payback test must be reduced to four years for rural buildings.
3. The parallel introduction of tightening minimum requirements for domestic and non-domestic buildings puts further pressure on a landlord’s ability to fund energy efficiency improvements.
Only new leases should require a minimum EPC rating of C/B. Existing leases and renewal leases should require a minimum EPC rating of D.
4. The seven-year payback test for an exemption does not work in a rural setting, where obtaining three quotes is difficult due to fewer qualified companies paired with a reluctance to quote for a job that will not lead to work.
The EPC must provide the figures to be used for the seven-year payback test with the ability for the landlord to challenge these figures by obtaining his own evidence if required.
Although the consultation has now closed, the CLA would welcome any thoughts on our response or any additions which may help us lobby for an effective climate change policy for the rural commercial private rented sector.
Further guidance on the non-domestic Private Rented Sector Minimum Energy Efficiency Standards (MEES) Regulations can be found here.