Will MEES make buildings perform better?
There is a chance that, during the last few weeks, you will have seen a plethora of blogs, social posts and general chat in the UK about the upcoming new regulations for Minimum Energy Efficiency Standards (MEES) and Energy Performance Certificates (EPC), which came into practice at the beginning of April. But how will this affect your business and will it make buildings perform better?
Why do MEES and EPC matter?
From April 1st, all tenanted buildings are required to have an EPC rating of at least an E. Properties with a rating of F or G will no longer be granted tenancy unless they are eligible for an exemption. Companies and landlords who do not comply with these new requirements, or are not taking steps to improve their ratings to an E or above, will be fined between £10,000 – £150,000 for every breach. On top of the financial risk and potential for stranded assets, information about each of the breaches could be made public, causing reputational damage as well.
Asset managers and property owners will need to identify huge capex (Capital Expenditure) funds to create efficiencies in their buildings to improve their EPC rating and comply with regulations. This may include the replacement of inefficient boilers, converting to LED lighting or improving the building’s insulation. All are important steps to take in reducing a building’s energy consumption; however, major refurbishment projects and refits are expensive, time-consuming and impact the bottom line.
Investors too will be keeping a keen eye on stranded assets, once a phrase rarely heard is becoming more and more common, as they want assurances that the assets that they are investing in now will not become un-lettable in seven or even four years' time. Cost-effective and quick solutions are a must!
The future of regulations in buildings
The government’s guidance for landlords on the Non-Domestic Private Rented Minimum Standard opens with the statement, “The energy we use for heating and powering our non-domestic buildings is responsible for around 12% of the UK’s emissions. Around 60% of today’s non-domestic buildings will still exist in 2050.” So it is right that increasing the energy efficiency of our non-domestic buildings stock is a primary focus and this is without even taking into account global events over the last year, which have highlighted the urgent need to reduce the UK’s energy demand to increase our energy security.
These regulations have been in the pipeline since 2015; and the indication is that they will continue to tighten further in 2027 when buildings must reach a C rating and then in 2030 when they should reach band B. So it stands to reason that it is not only landlords and tenants who should be aware of these changes but also property owners and investors, asset managers and developers. The upcoming deadline might be thrusting the issue into the industry limelight right now but the need to improve our buildings’ energy efficiency is not going to go away, in fact, it is going to become far more significant.
Where Demand Logic fits
We welcome the added impetus behind any energy efficiency initiative, but it’s worth noting that whilst EPCs are the tools we have (slightly blunt tools, but during their 15 years of existence they have substantially helped raise awareness of fuel poverty and set benchmarks regarding energy efficiency), as a notional rating scheme it is essential to aim for improvement and focus on operational energy consumption. In addition to, or indeed before, the suggested capex improvements to buildings’ infrastructure, it would be better and quicker to focus on identifying the shortfall in a building’s performance through analysis of its live data, providing a baseline of its operating performance as well as a ‘behind the meter’ look at areas which are key for improvements.
This brings us to the question of whether, or when, there should be a wider conversation about how we measure our buildings' performance. We are taught to work with the tools we have but sometimes even the tools themselves need improvement. Right now, we are witnessing a sea change in public opinion about climate change, there is clear evidence from events around the globe that anthropological climate change is happening and governments around the world have committed to stringent net-zero targets. Focusing attention and means on a fairly small change in regulations coming into force in April is not progressive; and as an industry, we are capable of going so much further and faster.
There is also little point in making improvements to buildings in a piecemeal fashion. More progress will be made towards our net zero targets if there is a strict focus on making all buildings perform better.
Solutions such as Demand Logic’s Insight platform can help provide instant impact in energy reduction and improving performance. Finding and rectifying alarmingly common issues such as when a building is simultaneously heating and cooling - haemorrhaging energy, often on an extreme scale - are crucial first steps to reducing carbon emissions and energy cost - as well as impacting the expected life. Solutions to identify and rectify these issues can be implemented quickly and cost-effectively, and will have an immediate contribution to an improved EPC.
Our systems can provide Asset Logic solutions to illustrate live plant performance and anticipated life expectancy to help inform where capex funds need to be prioritised, based on live data. We can also provide the data and insight for feasibility studies to identify appropriate energy-efficient plant replacement based on the building’s requirements, vital intelligence for asset managers and property owners alike, who need to make decisions about where to target their spend.
To speak with our team about our PropTech solution, please email us or call +44 20 7193 4212.
