Commercial Insurance Articles
Energy Certificates for Property Owners - EPC's and DEC's explained
21 Oct 2008
Landlords of commercial and public buildings should be reminded this month of the requirement of obtaining display energy certificates (DEC’s) and energy performance certificates (EPC’s).
Stephen Matthews, chief executive of the Chartered Institution of Building Services Engineers, told H&V News that accredited assessors have faced a "real challenge" to meet the October 1st deadline for DEC’s.
Unlike EPC’s, which only need to be in place when a property owner buys, sells or lets the building, DEC’s will need to be put in place in 40,000 public buildings and those occupied by public authorities with more than 1,000 square metres.
Paul Martin, managing director at Team Energy and chairman of the monitoring and metering group at the Energy Services and Technology Association, says it is "one of the most interesting pieces of legislation in the last 25 years".
"It will stimulate awareness and investment in carbon reduction," he claims.
However, Mr Martin adds there has not been enough time allocated to secure DEC’s and insists "it is not at all achievable". More guidance is required from the government, he says, to ensure buildings are adequately assessed.
According to Communities and Local Government, DEC’s are nevertheless necessary to raise public awareness of energy and its use within public buildings. It says the introduction of DEC’s will give publicly accessible information on the energy performance of buildings for the first time.
The public sector will be expected to take the lead on DEC’s but other organisations will be required to produce a certificate. For example, if an organisation provides services traditionally funded by the taxpayer, it will be duty bound to obtain a DEC.
However, businesses which are fully autonomous and do not offer services previously provided by local or national government are exempt from the legislation.
Furthermore, only those buildings which exceed 1,000 square metres and are "frequently visited" need a certificate as it is provided for public use. However, if there are few visitors to the premises, with only employees or maintenance and delivery workers likely to enter the building, then a DEC is not required.
Communities and Local Government encourages the provision of such information, even if it is not legally required. DEC’s will be put in place to show the "rating" of individual buildings, ranked from A (low carbon emissions) to G (high carbon emissions).
Organisations have been instructed to display the certificates in areas clearly visible to the public and accompanied with an advisory report.
Richard Hipkiss, from i-prophets energy services, told H&V News he hopes DEC’s can be a focus for facilities managers and public authorities to improve the performance of their buildings.
However, the low-carbon energy assessor says more needs to be done to promote the positive message of having a certificate.
DEC’s will contain, by law, the operational rating of a building if it has been occupied in the last two years, or after three years where no historic energy consumption data can be acquired. The certificates will also include a unique reference number, building details, name and address of the energy assessor, accreditation scheme and the date it started.
Advisory reports, on the other hand, will contain recommendations for improving the energy performance of the building.
These will be valid for seven years and include cost-effective measures for enhancing the property, such as management improvements, suggestions of upgrades to building fabrics or services and possibilities of installing low and zero carbon technologies.
Communities and Local Government insists this is a "reasonable interval during which the building occupier would have sufficient opportunity to act on the recommended measures in the advisory report".
As well as displaying a hard copy of the DEC, owners of public buildings are suggested to provide a valid certificate on a website or other media, underlying details on the building and its energy performance, a full technical table and supplementary information on aspects such as reasons for poor or better performances in previous years.
Legally, only the one hard copy needs to be shown - as long as it is "placed in a prominent place clearly visible to the public".
The Communities and Local Government advice document also recommends property owners check the authenticity of their DEC. Ensuring the unique certificate number is included is advised and if an owner has any doubts it is suggested getting in touch with the accreditation body.
DEC’s submitted on their own without an advisory report and vice versa are not regarded as legal documents, Communities and Local Government cautions.
Owners of public buildings or those otherwise obliged to produce DEC’s are also warned a local authority can issue a penalty charge notice of £500 for failing to display a DEC at all times.
A fine of £1,000 will also apply to those failing to possess or have in their control an advisory report.
However, taking steps to avoid a breach of the new regulations will result in penalties being withdrawn, and a review can also be requested if an owner feels a penalty charge notice should not have been given.
EPC’s, meanwhile, will need to be acquired by landlords of all properties with a total floor area are of more than 2,500 square metres which are bought, sold or rented as of today. This will then be extended to all buildings from October 1st this year.
For new buildings, it will be responsibility of the firm carrying out the construction to provide the owner with an EPC. This will allow prospective buyers or tenants to learn about the energy efficiency and carbon emissions of a building before making a final decision.
Landlords are advised by Communities and Local Government EPC’s should be provided to the potential buyer or tenant at the earliest possible opportunity and no later than a viewing.
It is the responsibility of the landlord to make sure an EPC is provided for accommodation before it is sold or rented out, even if they are not directly responsible for the process themselves, including when agents act on the landlord's behalf and when properties are sub-let.
For those who have not yet had to acquire an EPC or have yet to see one, communities and local government explains they look similar to the certificates provided with domestic appliances like refrigerators and washing machines.
The EPC allows people moving into a property to learn more about the energy performance of a building and is said to be particularly useful for those who consider environmental issues as part of their investment.
Valid in a commercial building for ten years, the EPC also includes advice on how occupants can make cost-savings and cut energy usage in the building.
Landlords who do not possess an EPC - discounting those who own temporary buildings, places of worship and industrial sites which are not subject to the new rules - are cautioned they will typically be fined 12.5 per cent of the rateable value of a property for their misdemeanour.
Where it is not possible to evaluate this rate a standard penalty of £750 will be issued, with the overall minimum being £500 and the maximum being £5,000.
As is the case with DEC’s, owners who are not happy with their EPC or have concerns about their about their energy assessment can contact the accreditation body if the matter cannot be resolved by the energy assessor.
According to the Communities and Local Government website, homes currently account for 27 per cent of the UK's carbon emissions, while commercial properties and public buildings are said to be responsible for nearly a quarter.
It is hoped the introduction of EPC’s into homes will inform people of how they can more efficiently light, heat and generally use their homes in a more environmentally-conscious manner.
The website states: "Even small improvements to the energy performance and the way we use our homes could have a significant effect on our fuel bills and carbon emissions."
By making EPC’s a feature of all commercial properties, the government also hopes to encourage staff to use the buildings where they work more efficiently.
EPC’s, as well as DEC’s, form part of a strategy which is aiming to cut half of carbon emissions from all buildings.
The next factor which could contribute to higher emissions which will be targeted are air conditioning systems. Inspections are set to take place on these systems from January next year to check they are "carefully managed and maintained" in a manner which ensures minimal energy is consumed.
Property owners are informed by Communities and Local Government that inspections will include an assessment on the air conditioning system and advice on improvements, replacements and alternative options.
Similarly, advice and guidance is set to be given for boilers. It is believed 50 per cent of the total energy consumption from buildings comes from heating and hot water use.
To help reduce commissions, Communities and Local government is to launch a programme encouraging heating and boiler installers to provide basic energy advice to users.
The Carbon Trust argues that the likely impact of EPC’s is that they will separate good buildings from bad by measuring the energy performance of a building consistently.
They hope owners of buildings with a poor energy rating should do all they can to be more eco-friendly as this will save them money.
