Minister for Energy Consumers (): I am pleased to provide
an update on the Government's approach to strengthening Minimum
Energy Efficiency Standards (MEES) in the nondomestic private
rented sector, following our previous consultations and extensive
recent engagement with industry, investors, local authorities and
other stakeholders.
The Government consulted in 2019 and 2021 on proposals to raise
non-domestic PRS MEES to EPC B, reflecting the role of energy
efficiency in cutting bills, strengthening energy security and
supporting the transition to net zero. Since then, we have
continued to engage closely with stakeholders on how these
proposals would work in practice across a diverse commercial
building stock.
Listening carefully to that feedback, the Government has now
confirmed its intention to implement a revised and proportionate
approach that maintains ambition where it delivers the greatest
benefits, while providing greater flexibility for smaller
businesses and landlords.
In practice, this means from 2031, it is proposed that private
rented non-domestic buildings over 1,000 square metres in England
and Wales will be required to meet a higher energy efficiency
standard of EPC B, where cost effective. This offers a more
targeted approach compared with the original proposal, which
would have applied across the entire non-domestic building stock.
Initial modelling suggests that raising the standard for the
largest premises could save those tenants £360m per year on their
energy costs by 2031.
The intention is for buildings below 1,000 square metres to
continue to be subject to the current EPC E minimum standard.
The previously consulted interim EPC C milestone for 2027 will
not be taken forward, giving landlords and tenants more time to
plan investment and retrofit works in a way that suits their
buildings and lease structures.
Existing flexibility mechanisms, including the 7-year payback
test and exemptions, will remain in place ensuring that only
improvements that are practical, affordable and cost-effective
will be required.
The changes to raise MEES to EPC B for larger buildings will take
effect following the successful passage of secondary legislation
through Parliament.
This targeted approach focuses action where it delivers the
greatest benefits, helping tenants in the largest buildings save
energy and reduce bills, protecting them from future energy
shocks. While continuing to improve the poorest performing
buildings through the existing EPC E standard, we are giving
additional flexibility to our SMEs and high streets to upgrade
their buildings over time, with no set deadline for going beyond
this level. With a fair and proportionate timetable, the policy
supports business investment, reduces exposure to volatile energy
prices and strengthens UK energy security.
We will publish the government's consultation response in due
course, setting out further detail on the policy and
implementation of the threshold, and aim to introduce legislation
and supporting guidance at the earliest opportunity.
We will continue to work closely with industry and other
stakeholders to ensure the pathway to EPC B is fair, clear and
deliverable.
We look forward to continuing the dialogue with industry as we
move into the next phase of delivery.
