Here’s a question for you: how do you achieve the seemingly absurd situation where a building’s carbon emissions are reduced, without the building actually becoming more energy-efficient?

The answer: adopt the Government’s new Minimum Energy Efficiency Standards (MEES), rejigged as of 1^st April 2023 - because this is exactly the situation they have allowed to happen.

It would be a good joke if it weren’t such a bad one. So what are the changes that have been made, and why do they look a lot like the Government is having a laugh at the environment’s expense?

 

Changes that look good on paper

First of all, let’s remind ourselves of the original requirements of MEES, and compare them with the new updates.

The roots of MEES go back to the Energy Act of 2011, but it was in 2018 that we saw the last iteration, which, in short, meant that landlords in England and Wales could not grant or renew a lease of a non-domestic property that did not meet the minimum energy performance certificate (EPC) rating of band E (with some very specific exceptions).

Clearly, the loophole here was that landlords could continue to rent out commercial property that did not meet the minimum E-band EPC rating if the lease was already in force  - and that’s the loophole that has now been closed.

From 1 April2023 it is unlawful to continue to let a commercial property with a minimum EPC rating of lower than E, even if the lease was granted prior to the MEES Regulations coming into force in 2018.

On paper, this sounds like an important step forward. It’s estimated that over 10% of commercial properties in England and Wales do not currently meet EPC requirements, owing in part to the earlier leniency of MEES regarding ongoing leases.

That’s about24,000 properties in all – and now those landlords are going to have to put their house (figuratively speaking) in order, if they don’t want to risk losing some £2.5 billion in rental income.

Or are they?

 

Moving the MEES goalposts

The reason we ask the question is that changes to the EPC calculation software made inJune 2022 - although they make engineering sense, and correctly reflect the fact that the electrical grid now has less carbon in its production - in fact also make it possible for buildings to achieve the highest EPC bands (A and B) much more easily, without any changes to the building’s fabric!

How do we know this? Because as engineers with well over 20 years’ experience in saving energy, and a dynamic energy model built using powerful software, we were able to rerun some 2022 EPC inputs for a 40,000 square foot, two-storey, 1990s office building against the 2023 EPC calculator.

The result was that a number of carbon factors jumped several places to the good, simply because they now use electricity. Changing the gas boiler to a  variant refrigerant volume (VRF) heating and cooling system, for example, boosted a D83 score to B48. Changing to LED lighting and controls took a C52 score to B36. And the combined VRF, LED, and new air handling units (AHUs) with heat recovery moved a B27 score to A10.

Changes of this magnitude will, within the logic of the EPC software, contribute to a higher energy-efficiency score overall – which, in our example, makes a complete mockery of MEES in its latest guise. This 1990s refurbished building, with an EPC A10, will still use twice the energy of a new building next door with an EPC rating of A8!

As we said at the beginning of this piece, the Government has somehow managed to contrive an EPC system that can be gamed at no effort, producing falsely favourable results that remove the incentive to adopt and install carbon reduction and energy efficiency measures.

Progress it ain’t.

 

Conspiracy or cock-up?

Whilst we could be charitable and say the Government simply hasn’t fully thought this through, the story undeniably has more than a whiff of landlord-friendly Westminster equivocation about it.

Cracking down on the one hand, by bringing previously exempt leases within the scope of MEES, is without doubt a good call – but it’s tainted on the other by making it easier for those properties to attain EPC targets (whether they’re credible or not).

With the tax receipts on £25billion of potential rental revenue at stake, it’s perhaps easy to see why this kind of “accommodation” might be sought.

But in a market where there is already a lack of understanding of the engineering complexity inherent in making buildings truly energy-efficient, this is one more channel of misinformation that sells net zero as a goal that can be achieved as a “quick and dirty”.

It can’t – and we believe theGovernment’s MEES update needs cleaning up to turn a job half-done into a job well done.

What are your thoughts on the new MEES Regulations? Get in touch today to find out more about how we can help make your building compliant, energy-efficient, and sustainable.