Energy Performance Certificates (EPCs): What They Are and Why They Matter

An Energy Performance Certificate (EPC) is a legal requirement for most properties in the UK when they are sold, rented or newly constructed. EPCs measure how energy efficient a building is and play a critical role in compliance, operating costs, property value and long-term sustainability. For landlords, property owners and businesses, understanding EPCs is essential to meeting legal obligations, avoiding penalties, and preparing for future energy efficiency regulations.

What Is an Energy Performance Certificate (EPC)?

An Energy Performance Certificate (EPC) is an official document that assesses the energy efficiency of a building. It provides a clear rating from A to G, where A represents the most energy efficient properties and G the least efficient.

An EPC gives property owners, tenants and buyers insight into:

• How much energy a building is likely to use

• Typical energy costs

• How the building compares to others

• Practical recommendations for improvement

Each EPC is valid for 10 years, unless significant changes are made to the building that affect its energy performance. Once issued, it can be reused multiple times during that period for sales or lettings.

Why EPCs Exist

EPCs were introduced to improve transparency around energy use in buildings and to support national energy efficiency and carbon reduction goals. Buildings account for a significant portion of the UK’s energy consumption, and EPCs help highlight where improvements can be made.

For property owners and businesses, EPCs serve as both a compliance document and a planning tool. They allow informed decisions around upgrades, refurbishment, and long-term asset management.

Who Needs an EPC?

In the UK, EPCs are required in most situations where a property is:

• Sold

• Let to tenants

• Newly built

• Subdivided into separate units

This applies to both residential and commercial properties.

EPCs for Landlords

Landlords must provide a valid EPC to prospective tenants before a property is let. This applies to private rented homes, commercial leases and mixed-use buildings.

Failure to provide an EPC can lead to enforcement action and financial penalties.

EPCs for Businesses

Businesses that own or lease premises must ensure the building has a valid EPC. This is particularly important for commercial landlords, who must comply with Minimum Energy Efficiency Standards when letting property.

EPCs for Property Sales

An EPC must be available when a property is marketed for sale. Estate agents and property professionals often require proof of a valid EPC before listing.

Legal Responsibilities and Compliance

EPCs are governed by UK energy efficiency and building regulations. Property owners are responsible for ensuring that an EPC is obtained from a qualified and accredited assessor.

Providing misleading EPC information or failing to produce a valid certificate can result in fines and enforcement action.

How EPC Ratings Work

EPC ratings range from A to G:

• A indicates excellent energy efficiency and low running costs

• B and C indicate strong performance

• D is above average but may still benefit from improvements

• E is generally considered the minimum acceptable standard for lettings

• F and G indicate poor energy efficiency and may be unlawful to let

The rating is calculated using standard assessment methods that consider building fabric, insulation, heating systems, lighting and controls.

Minimum Energy Efficiency Standards (MEES)

The Minimum Energy Efficiency Standards (MEES) place legal restrictions on letting properties with poor EPC ratings.

Key MEES Requirements

• Properties being let must have an EPC rating of E or above, unless a valid exemption applies

• Since April 2023, this applies to both new and existing commercial tenancies

• Letting a property rated F or G without exemption can result in financial penalties

MEES regulations are a key reason why EPCs matter so much to landlords and commercial property owners.

Why EPCs Matter for Landlords

For landlords, EPCs directly affect the ability to rent out property.

Legal Letting Restrictions

Without a compliant EPC, a property may be unlawful to let. This can lead to loss of rental income, fines and reputational risk.

Tenant Demand and Expectations

Tenants are increasingly aware of energy costs. Properties with better EPC ratings are more attractive due to lower heating and electricity bills.

Long-Term Asset Protection

Improving EPC ratings helps future-proof properties against tighter regulations and protects asset value.

Why EPCs Matter for Businesses

For businesses, EPCs influence operating costs, compliance obligations and corporate responsibility.

Energy Costs and Budgeting

Buildings with better EPC ratings typically use less energy. This helps businesses control running costs and forecast expenses more accurately.

Corporate Sustainability

Many organisations now track energy efficiency and carbon impact. EPCs provide measurable data that supports sustainability reporting and environmental targets.

Lease and Investment Decisions

EPC ratings are increasingly considered during lease negotiations, property acquisitions and investment planning.

What Information Does an EPC Include?

An EPC contains several key sections:

Energy Efficiency Rating

A clear A to G score showing overall performance.

Environmental Impact Rating

An assessment of carbon emissions associated with the building’s energy use.

Estimated Energy Costs

Typical annual costs for heating, hot water and lighting.

Recommendations for Improvement

A list of practical measures that could improve the building’s energy efficiency, including estimated costs and potential savings.

EPC Assessments Explained

An EPC assessment is carried out by an accredited energy assessor. The process typically includes:

• Inspecting insulation levels

• Reviewing heating and hot water systems

• Assessing lighting efficiency

• Measuring building layout and materials

• Reviewing glazing and ventilation

The assessor inputs this data into approved software to generate the EPC.

For commercial properties, assessments can be more complex due to size, layout and multiple usage types.

How EPCs Support Energy Efficiency Improvements

EPCs are not just compliance documents. They provide a roadmap for improvement.

Identifying Cost-Effective Upgrades

EPC recommendations help prioritise upgrades that offer the greatest improvement for the lowest investment.

Planning Phased Improvements

For larger properties or portfolios, EPCs support long-term improvement strategies rather than one-off changes.

Supporting Funding and Grants

In some cases, EPC data may support applications for energy efficiency funding or incentives.

Common EPC Improvement Measures

While every building is different, common improvement actions include:

Insulation Upgrades

Improving wall, roof or floor insulation significantly reduces heat loss.

Heating System Improvements

Modern boilers, heat pumps and better controls can improve efficiency ratings.

Lighting Upgrades

Replacing older lighting with energy-efficient alternatives reduces electricity use.

Glazing Improvements

Upgrading windows and doors improves thermal performance.

Renewable Energy Options

Solar panels or other renewable technologies can improve EPC scores and reduce reliance on grid energy.

EPCs for Commercial vs Residential Properties

While EPC principles apply to both, there are important differences.

Assessment Complexity

Commercial EPCs often require detailed analysis of building zones, usage patterns and systems.

Compliance Impact

Commercial landlords face stricter MEES enforcement and higher penalties for non-compliance.

Future Regulatory Changes

Commercial EPC requirements are expected to become more demanding as the UK moves towards net zero targets.

Common EPC Misconceptions

There are several misunderstandings around EPCs:

• An EPC does not measure actual energy bills, but estimated performance

• A good EPC rating does not remove future compliance obligations

• EPCs must be updated if significant changes are made to the building

• EPC compliance does not replace other safety or compliance duties

Understanding these points helps property owners avoid false assumptions.

Managing EPCs Across Property Portfolios

For landlords and organisations with multiple properties, EPC management should be structured and proactive.

Best practice includes:

• Tracking EPC expiry dates

• Monitoring MEES compliance across assets

• Planning improvement works in advance

• Integrating EPC data into wider compliance planning

How Global Compliance UK Can Support EPC Compliance

Energy Performance Certificates form part of a broader compliance and risk management landscape. Global Compliance UK supports property owners, landlords and businesses by helping them understand how EPC requirements fit alongside other regulatory responsibilities.

Our expertise helps clients:

• Understand EPC obligations and MEES requirements

• Plan energy efficiency improvements

• Align EPC compliance with wider property safety strategies

• Manage compliance confidently and proactively

Conclusion and Contact Us

Energy Performance Certificates are a critical part of property compliance in the UK. They help ensure legal compliance, reduce energy costs, improve sustainability and protect long-term property value. For landlords and businesses, EPCs are no longer optional paperwork but a key part of responsible property management.

Contact us, If you need guidance on EPC compliance or how it fits into your wider regulatory obligations, Global Compliance UK is here to help. To speak with our team or arrange support.