Preparing for EPCs - a fivestep guide

Given the short period of time left before the new legislation, I am always surprised to hear from clients that they know very little about and have done even less to prepare for the Energy Performance Directive (EPD).

The companies that are prepared will know that the Directive will require all landlords and property owners to provide an Energy Performance Certificate (EPC) when they construct, sell, lease or modify a commercial building over 10,000m2 from 6 April. It will be extended to buildings over 2,500m2 from 1 July and all other buildings from 1 October 2008. They must also ensure that air conditioning systems with an output of greater than 250kW have received an energy inspection by 4 January 2009. From October, public authorities and institutions occupying buildings with a floor area over 1,000m2 must put on view a Display Energy Certificate (DEC) which shows its energy consumption over 12 months.

For those that have made little progress with the new legislation or have no idea where to start, here are my five EPD tips to remember:

1.Understand your portfolio

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.

Gather together the paperwork for each and every one of the premises in your portfolio such as building size, usable floor area, an up-to-date Operation & Maintenance manual for the building and its asset register and obtain up to date property valuations. If you are required to produce a DEC make sure you have the last 12 months’ utility bills available, preferably in electronic format. You should also ensure the lease agreements are in accordance with British Property Federation standards.

2. Understand your costs

While studies have shown that following the Energy Performance Directive will save businesses a significant amount of money in the long term, it is important that managers budget for the short term costs of compliance, as well as the potential improvements to your assets as a result of your energy grade.

3. Look to the future

Plan ahead. Consider which buildings you would possibly wish to modify or sell in the next year and create a forecast so that you can ensure that you meet all the Directive’s deadlines.

Only accredited companies can provide Energy Performance Certificates (EPCs) and demand will be high in March. Talk to your insurance broker or property management company sooner rather than later to find out who will be able to provide these certificates.

4. Understand responsibilities

Construction companies, property owners, heating and electrical companies and potential property buyers and tenants must all be aware of the legislation as they each have responsibilities to fulfil.

When a building is being constructed or modified, it is the responsibility of the party carrying out the construction or modification to produce an EPC and recommendations report to the property owner. As the property owner, it is your responsibility to ensure that you are provided with an EPC when the work has been completed.

5. Appreciate the value of an EPC

By complying with the legislation and following the recommendations supplied with the EPC on how to improve energy efficiency, you can reduce your energy bills and cut its carbon emissions, thereby making the property more attractive to potential buyers or tenants in the future.

A poor energy rating could deter some potential tenants or buyers who do not wish to pay higher energy costs or simply cannot occupy an energy inefficient building due to Corporate Social Responsibility policies or reputational issues.