Energy Performance Certificates - The basics

Following the phased and sometimes delayed introduction of legislation under the Energy Performance of Buildings Directive (EPBD) – including EPCs and DECs - we present our online guide to the whats and whys of the matter from existing building to air conditioning to minimum energy standards.

Any questions please email Michael Willoughby at mwilloughby@cmpi.biz.

The Background – the EPBD

The government’s tight legislation on energy conservation in the built environment would probably not have been created were it not for the European Energy Performance of Buildings Directive (EPBD) passed in 2003.

The slimline directive allows member states to implement it as they see fit, provided they meet five separate requirements. All are intended to reduce the amount of CO2 our buildings release into the atmosphere. All parts of the directive were to be passed by member governments by 2006.

1) Certification (Article 7)

All buildings A certificate of a building’s energy performance (our EPC) has to be show to the prospective buyer or tenant when a building is sold, bought or rented. The certificate, which lasts ten years, has to include potential improvements to the building’s energy performance. Article 7 also discusses, legal standards and benchmarks (for comparison) as well as methodology and data collection methods.

Public Buildings Buildings over 1,000 sq m occupied by organizations providing public services must show a certificate displaying energy use (our DEC). Other states have interpreted this as meaning banks and shops, but we have not.

2) Inspection (Articles 8 & 9)

A8 - Boilers All boilers between 20 and 100kW burning non-renewable fuel have to be inspected every two years. Whole heating systems with boilers older than fifteen years have to be inspected and advice on upgrading it provided. Advice on replacement boilers must be provided.

A9 - Air Conditioning Regular inspection of air conditioning systems over 12 kW must be made. An examination of an air conditioner’s fitness of purpose to its environment must be given as well as improvement or replacement or alternative solutions.

3) Experts (Article 10)

“Member States shall ensure that the certification of buildings, the drafting of the accompanying recommendations and the inspection of boilers and air-conditioning systems are carried out in an independent manner by qualified and/or accredited experts, whether operating as sole traders or employed by public or private enterprise bodies."

4) Calculation (Article 3)

A national or regional calculation methodology must be set in accordance with appendices in the legislation. The energy performance of a building shall be expressed in a transparent manner and may include a CO2 emission indicator

5) Minimum EP requirements (Articles 4, 5 and 6)

A4 - Setting of minimum energy performance requirements These must be set based on details in Article 3. Member states can differentiate between new and existing buildings, take account of indoor climate, ventilation, local conditions and age of the building, Energy performance requirements must be applied according to Articles 4 & 5. Certain types of building can be excluded, including monuments, places of worship and temporary buildings.

A5 - New Buildings These must meet requirements expressed in Article 4. New buildings over 1,000 sq m must examine feasibility of CHP, district heating, heat pumps, decentralised energy fired by renewable sources.

A6 - Existing buildings Member states must ensure that when buildings over 1,000 sq m are refurbished they must be upgraded to meet minimum requirements insofar as this is feasible. Member states shall set their own minimums. Renovation can refer to the whole or the part or a system within a building.

Implementation of the directive in the UK

The UK passed the Directive into legislation with few hiccups. Its roll-out has been rockier. Legally, officially, all aspects of the Energy Performance of Buildings Directive were meant to have been implemented by 1 October 2008. However, the government has given some waivers on enforcement of legislation for DECs; and of EPCs for buildings over 1,000 sq m meaning, effectively, that landlords and public authorities have until January 2009 to get their act in order. Similarly, the government has allowed campuses (such as hospitals and universities) to submit a DEC for the entire site rather than individual buildings in the first year, which is of little use to anyone.

Here are the specifics of the UK legislation:

Timetable for England and Wales

Landlords/property owners must provide an Energy Performance Certificate to any prospective buyer or tenant when they construct, sell or lease a commercial building for any building over 1,000 sq m. Enforcement will kick in come January 2009.

Timetable for Scotland

The provision of an Energy Performance Certificate when constructing a commercial building in Scotland came into effect from 1st May 2007. The requirement for an Energy Performance Certificate when selling or leasing to prospective buyers or tenants of a commercial building over 1,000m sq from 4th January 2009.

Energy Certificates for display in public buildings

An energy certificate must be placed in a prominent place clearly visible to the public for buildings with a total useful floor area over 1000 m2 occupied by public authorities and by institutions providing public services.

EPCs were required as of the 6th of April 2008 where a:

• Building is constructed

• Building is re-tenanted

• Building is sold

• Buildings useful floor area >50m2

• Certificate is valid for 10 years (Unless Building is modified)

• Advisory report

Display Energy Certificates

Display Energy Certificates are only required for buildings with a total useful floor area over 1,000m 2 that are occupied by a public authority and institution providing a public service to a large number of persons and therefore visited by those persons. They are valid for one year. The accompanying Advisory Report is valid for seven years. Enforcement of the legislation will begin in January 2009.

EPCs requirement on construction

When a building is constructed the relevant person shall, no later than five days after the construction work has been completed, give to the owner of the building an energy performance certificate for the building.

EPCs requirement on sale and rent

The relevant person shall make available free of charge a valid EPC to any prospective buyer of tenant at the earliest opportunity or in the case which the relevant person first makes available information in writing about the building. The relevant person must ensure that a valid EPC has been given free of charge to the person who is ultimately becomes the buyer or tenant

Inspection of large air conditioning systems

• Air conditioning systems where the total system cooling capacity is greater than 12kWr (whether in dwellings or non-dwellings) will be inspected at intervals not exceeding 5 years.

• The inspection will include an assessment of efficiency, a review of their sizing and advice on improvements or replacements and alternative solutions.

• Reported >250kW effective rated output by 4th January 2009

• Reported >12kW effective rated output by 4th January 2011

• Written assessment of the air-conditioning efficiency and the sizing of the system compared to the cooling requirement of the building

• Appropriate advice on possible improvements/replacement of the system and alternative solutions

• The report can be no more than 5 years old

Points to note: Where the relevant person has the power to control the temperature of more than one individual unit in a building, each unit is viewed as a component of a single system.

If the relevant person changes after the due date and is not issued with an inspection report, the new relevant person must ensure the system is inspected within 3 months of the day which they have become the relevant person.

Air-conditioning timetable in England, Scotland and Wales

By 4th January 2009 all commercial premises with air conditioning systems with an output of greater than 250kW will require an energy inspection report for their system.

Inspection of boiler

Landlords/property owners need to carry out regular inspection of boilers fired by non-renewable liquid or solid fuel of an effective rated output of 20 kW to 100 kW.To take steps to ensure the provision of advice to the users on the replacement of boilers, other modifications to the heating system and on alternative solutions which may include inspections to assess the efficiency and appropriate size of the boiler. A report also needs to be submitted to the Commission every two years.

Exceptions

Buildings that do not comply to the EPBD

• The building is to be sold or rented out with vacant possession

• The building is suitable for demolition

• The resulting site is suitable for redevelopment

• The relevant person believes on reasonable grounds that the prospective buyer or tenant intends to demolish the building

• Buyer/tenant is unlikely to have sufficient means to rent or buy

• Buyer/tenant is not genuinely interested in buying or renting

• Buildings which are used primarily or solely as places of worship

• Temporary buildings with a planned time of use of two years or less

• Industrial sites, workshops and non-residential agricultural buildings with low energy demand stand-alone buildings with a total useful floor area of less than 50 m2 which are not dwellings

What happens if you don’t comply

The penalty for not complying with the relevant duties on the sale or renting out of buildings other than dwellings is fixed, in most cases, at 12.5% of the rateable value of the property, with a default penalty of £750 where the formula cannot be applied. This is more appropriate than a flat rate penalty of £750 as the costs of producing an EPC for buildings other than dwellings (which like all EPCs will be set by the market) are expected to vary according to the size, complexity and the use of the building. The range of penalties under this formula is capped at a minimum of £500 and a maximum of £5,000.

Display Energy Certificates

A similar approach of fixing the penalties in light of the anticipated cost of complying with each duty has been adopted for penalties that apply to breach relating to DECs (penalties of £500 and £1000 depending upon the breach of duty)

Air-Conditioning Inspection

Fixed penalty of £300 for any breach of inspection, enforceable by local weights and measures authorities- in most circumstances by Trading Standards Offices.

Ten top tips to comply

Royal & Sun Alliance offer some handy hints on preparing for the onset of EPCs.

1. Make sure you are aware which (if any) of your properties will be subject to the new legislation. This will depend on the size and use of the property.

2. There will be a limited number of accredited companies that can provide Energy Performance Certificates (EPCs) and demand is likely to exceed supply. Talk to your insurance broker or property management company to find out who will be able to provide these certificates.

3. Formulate a strategy. Review which buildings you are going to sell, modify or re-lease over the next twelve months and prioritise.

4. Budget for compliance costs and any potential improvements to your assets as a result of your energy grade. A low energy grade could be used as a bargaining tool to reduce rent or building values.

5. To save cost and time, collate the information needed to complete an EPC prior to the implementation of the Directive. It requires details such as:

• building size

• total usable floor area

• your building asset register

• an up-to-date Operation & Maintenance manual/log book for your building

6. Review your lease agreements. Make sure they are up to modern standards as advised by the British Property Federation.

7. Make sure your property valuations are up-to-date.

8. If you are required to produce a Display Energy Certificate make sure you have the last 12 months’ utility bills available, preferably in electronic format.

9. It is the user/operator’s responsibility to make sure the energy assessment of air conditioning audits is carried out. Understand the size of your units and engage with a competent person to complete the inspection.

10. Go to Government EPC site to see your full responsibilities as landlord or tenant with regard to the Energy Performance of Buildings Directive.

Postscript :

Definition of a building “A roofed construction having walls, for which energy is used to condition the indoor climate; a building may refer to the building as a whole or parts thereof that have been designed or altered to be used separately.” (Communities and Local Government).