Wed, 19/10/2022 - 12:00
· 4 min read

Building Owners to Face Shock with New EPC Guidelines in 2023

Following a heated summer filled with political uncertainty and concern over a sharp rise in energy costs for British families this winter, listening to the Prime Ministerial hopefuls dismissing renewable energy plans came as a shock to many.

The United Kingdom has pledged a net zero target for greenhouse gas emissions by 2050 which will increase the demand for sustainable energy sources such as solar energy, and yet there is mounting evidence of counter-productive moves in force which could see this target slip, risking further damage to the country’s climate credentials on the global stage.

The Electronic Communications Code, passed into legislation in 2017 gave mobile network operators effective carte blanche rights to acquire both land and rooftop space for a nominal sum, for the purposes of building the UK’s digital network to increase connectivity in rural locations and boost broadband speeds to empower businesses to compete at the top tier with other countries around the world.  The 2015 Conservative manifesto described this move as “ensuring Britain seizes the chance to be a world leader in the development of 5G, playing a key role in defining industry standards”.

Whilst local headlines tend to focus upon the aesthetic impact of street furniture masts in residential areas, the financial impact upon landowners has been equally significant, with the methodology of recompense going from the centuries old system of a fair and free open market value calculation, to a more convoluted appraisal of consideration and compensation, putting the onus of demonstrating financial loss upon a landowner. If a grassed play area used by children is acquired for telecommunications development, can an adequate figure be placed on their loss? 

Further complications arise when looking at the rooftops of commercial premises being used to accommodate mobile base stations and already suffering an enormous financial hit as a result of the COVID-19 pandemic, forcing office workers to work from home. The threshold for benchmarking of Energy Performance Certificate’s (EPC’s) required on all existing and future commercial premises will be increased from April 2023.  Buildings which do not meet the EPC rating of E or above will no longer be permitted to be traded or leased under further new government regulations.  This rises to C in 2027 and B in 2030. Property owners without a valid EPC in place will face fines of around 12.5% of a property’s rateable value.

A recent investigation by Estates Gazette reveals that up to 120m square feet of commercial real estate – the equivalent to 199 London Shards – across England will have failing EPC’s in 2023 in what has been described as a ticking time bomb for commercial landlords. The research goes on to predict that the resulting loss in rental income will exceed £16bn over the next eight years if significant measures are not taken by landlords to upgrade their properties. Although predominantly affecting older buildings, there are still a significant amount of properties built within this century which barely make the E grade for rating, and will require significant work to increase this to avoid facing resulting fines and loss in income.

Naturally, thoughts turn to feasible ways to address this by the swiftest and most efficient means before the threat of penalties arise.  Aside from insulation, which the majority of responsible property owners already utilise, the use of photovoltaic (PV) solar panels to reduce carbon footprints can actually increase EPC by a whole band in many cases. Therefore, the benefits of Solar PV installation are clear for commercial premises owners, however, the battle for prime urban rooftop space with the recently empowered mobile network operators remains unresolved.  Proponents for the digital connectivity hive are quick to list the benefits of a better connected society, however it is unjust to expect property owners to be penalised in the form of EPC fines and loss of rental, if rooftop space is occupied by mobile network operators where Solar PV could otherwise be installed. In the absence of case law relating to this issue, further government guidance is required urgently to clarify which technology should prevail in future clashes of PV v RF. Far from being a cyclical chicken and egg debate, it is clear that one technology cannot exist without the other, and so greener and sustainable energy solutions will not only be of benefit to the consumer, businesses and property owners, but will also inevitably be used to help to power the increased number and volume of antennas MNO’s have been lobbying the government for in pushing through the ECC. 

In the interim, urgent measures are needed to ensure responsible property owners are not penalised next year by the occupation of rooftop space by MNO’s preventing PV installation and we would welcome any further discussions in the coming weeks.

Building Owners to Face Shock with New EPC Guidelines in 2023