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What do entrepreneurs need to know about Energy Performance Certificates?

Most people are unaware that buildings are responsible for almost 50% of the country's carbon emissions, ahead of road and air traffic. Small differences to the way we light and heat Britain's 25 million buildings could make a big difference. The rationale behind an EPC is to make owners, occupiers and buyers more aware of the energy efficiency of their building. The end goal is to encourage action to drive up efficient energy performance and drive down carbon emissions.

Buildings will get a rating on a scale of A to G for both carbon emissions and energy efficiency, 'A' being the highest. The EPC will also include specific recommendations (not requirements) for improving the energy efficiency of the building. In terms of content, that’s about it.

The business element

At present, only larger commercial properties and homes require an Energy Performance Certificate. But by October all properties, including small and medium sized companies, will need to get an EPC if they are being sold or rented out. In addition, public authorities will be required to produce Display Energy Certificates (DECs) for their larger public buildings. For the first time, they will be obliged to display for the public to see, their A-G energy efficiency rating. It will be interesting to see if corporate social responsibility prompts the private sector to do the same. Communities minister Iain Wright has said he hopes business will "rise to the challenge".

In the meantime, the EU Energy Performance of Buildings Directive has its own deadline by which each of the member states must make DECs and EPCS obligatory. And that's 4 January 2009.

As well as being good for reputation, it does make commercial sense to try and improve your ratings. In terms of energy efficiency there may be immediate savings to be made on running costs, but there is likely to be a longer term aspect too.

"EPCs will give us vital indications of the energy and carbon use of the buildings," explains Liz Peace, chief executive of the British Property Federation. "Owners and occupiers will use them to inform choices in their procurement of buildings, and in time, this could have an impact upon how buildings are valued."

The future

By October, every commercial building, when built, sold or rented, must issue an EPC, obtained from an accredited Energy Assessor. Each commercial EPC is valid for 10 years. Enforcement will be the remit of local authorities, and it is likely that fines will be imposed for those who have failed to certify.

However, for the moment, being fined for not having an EPC is the only direct financial aspect to the system. There are no penalties for those owners or tenants of environmentally unfriendly buildings (apart from higher bills). Neither is there any direct financial incentive from the Treasury to boost your ratings.

Environment secretary, Hilary Benn, has announced there will be a new Act on CO2 Advice Line provided by the Energy Savings Trust; the Green Neighbourhoods initiative will see 100 neighbourhoods environmentally improved, and there will be a doubling of obligations on energy companies to meet their carbon reduction targets. Housing minister Caroline Flint has also announced proposals for 15 potential eco-town locations, with new homes expected to reach zero carbon standards.

"If government and business - landlord and tenants, employers and employees - worked together," Wright says, "the UK could save 40 million tonnes of carbon by 2020.

The facts

The UK, along with all EU member states must implement the Energy Performance of Buildings Directive by January 2011, with energy certificate regulations in force by the end of this year, and next year onwards the final phases of air conditioning inspections. Scotland and Northern Ireland are both introducing their own regulations.

The measures include:

• Energy Performance Certificates (EPCs) for homes and commercial property


• Display Energy Certificates for public buildings (DECs)


• Inspections for air conditioning systems


• Advice and guidance for boiler users

The timetable for the phased introduction of the Directive is:

2007: Phased introduction of EPCs for sale of dwellings.

6 April 2008: EPCs required on construction for all dwellings. EPCs required for the construction, sale or rent of buildings, other than dwellings, with a floor area over 10,000 m2.

1 July 2008: EPCs required for the construction, sale or rent of buildings, other than dwellings, with a floor area over 2,500 m2.

1 October 2008: EPCs required on the sale or rent of all remaining dwellings. EPCs required on the construction, sale or rent of all remaining buildings, other than dwellings. Display certificates required for public buildings >1,000 m2.

4 January 2009: First inspection of all existing air-conditioning systems over 250 kW must have occurred by this date.

4 January 2011: First inspection of all remaining air-conditioning systems over 12 kW must have occurred by this date.