CLA property and business policy adviser Hermione Warmington outlines the importance of the MEES consultation
Recently, the Department for Business, Energy and Industrial Strategy (BEIS) launched a consultation on a proposed future trajectory for the Minimum Energy Efficiency Standards (MEES) for commercial buildings. BEIS has made it clear that their preferred target is raising the minimum EPC rating to B by 2030.
The Government’s consultation is part of the UK’s wider commitment to bring all greenhouse gas emissions to net-zero by 2050. Currently, MEES make it unlawful for landlords to grant a new lease or extend or renew an existing lease if their commercial property has an EPC rating of F or G and as of 1st April 2023, this will extend to all let commercial properties (subject to exemptions).
The consultation sets out two different trajectories:
- the preferred trajectory to reach a minimum of band B by 2030 and;
- the alternative trajectory to reach a minimum of band C by 2030.
The Government is also looking at whether to use a single implementation date of 2030 or incremental milestones, such as band D by 2024, band C by 2026 and band B by 2028 for new, renewal or extended leases before capturing all existing leases by 2030.
Regardless of what trajectory the Government chooses, the existing exemptions will remain. The main exemption is the seven-year payback test which is meant to ensure energy efficiency improvements are cost-effective. The test states that a measure, or a package of measures, meets the seven-year payback test where the expected value of savings on energy bills that the measure(s) is expected to achieve over a period of seven years (starting with the date the installation is completed) are equivalent to, or greater than, the cost of repaying it.
It's clear in the consultation that it is the landlord’s responsibility to ensure the property reaches the minimum energy efficiency band. but this could be problematic when the landlord wishes to let a property as a shell without installing the required measures or where there is an existing agreement which allocates responsibility to the tenant for the required measures.
The Government’s preferred trajectory to reach band B by 2030 is ambitious and it is important that the CLA understands the impact of the proposals on its members. Working with the CLA national team, I will be drafting the response and would like to draw upon the views, knowledge and experience of you as a member
If you have commercial buildings which will be affected by these proposals, I want to hear from you. Whether that be the impact on your portfolio, your experience using the seven-year payback or your experience obtaining an EPC for the 2018 minimum requirements, case studies will be a crucial part of our response to Government as well as aid our continuing lobbying efforts. Please contact me by email at firstname.lastname@example.org.
This consultation only covers commercial properties but a consultation on the trajectory for domestic properties is expected early in the new year.