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DSM EPCs for Large Commercial Properties

What is a DSM EPC and do I need one?

DSM EPC stands for Dynamic System Model Energy Performance Certificate – not the easiest acronym but it can be very important. Although for most offices, shops and industrial units, a standard non-domestic EPC is sufficient, in some cases you may wish to look at a more comprehensive and detailed DSM EPC. In this blog we’ll discuss what the advantages of this type of EPC is, when you can get them done and how they differ from a standard EPC.

What is the difference between a standard and DSM EPC?

Non-domestic EPCs fall into 3 different categories based in the complexity of the job.

A level 3 EPC EPC is the most basic. This is usually carried out on small shops and offices, and industrial units. Something like 90% of all EPCs carried out will fall in this bracket.

Level 4 EPCs are for buildings with more complicated HVAC systems. This means properties with centralised air handling systems, like VAV systems in office blocks, or ones with fan coils. If you have anything other than standard electric heaters, a basic air conditioning system, or a simple boiler, then you may need to have a level 4 EPC.

Many assessors are qualified to do both of these types of EPC. They don’t actually differ in how they are carried out practically. The only real difference for a level 4 assessment is the fairly minor added complexity in identifying the HVAC system and getting hold of the right data in order to attain the best possible rating.

There is also a level 5 EPC, used for the most complex buildings. That means properties with the most complicated HVAC systems (such as demand controlled ventilation), those with multi-level atria, and those that are so large that standard modelling software cannot handle the data.

Level 5 EPCs are quite rare – most properties will not fall into his category, and therefore very few assessors are qualified to carry them out. Here at London-EPC we do have you covered for this, and you should give us a call if you think your property may need this type of EPC.

Level 5 EPCs require a DSM (Dynamic System Model). This is carried out by creating an actual 3D model of the building in a special piece of software, meaning that you can accurately represent even the most complex buildings and ensure they get the right EPC rating. You can carry out a DSM EPC on any building, even a level 3 property, but it is compulsory once you get to level 5.

Is it worth getting a DSM EPC for a level 3 or 4 building?

This brings us onto the question, is there any value in getting this type of EPC for a simple building? It is possible to do this, and some assessors will do it anyway depending on the type of software they use. Typically you will pay more for a DSM EPC because it takes a little more time to get them entered into the software, but they can get you to an improved rating in some instances as they give a more accurate representation of the building. We have also noticed that some contractors are required to get DSM EPCs on their projects as part of their contractual obligations.

We would not normally recommend a DSM EPC unless you have been requested to get one carried out, or if you fall into that level 5 category.

There are some additional advantages with DSM beyond carrying out an EPC. Once the model is entered into the software, a DSM can then be used for other purposes and is great for evaluating improvement measures.

How much do these EPCs cost?

Commercial EPCs are priced on an individual basis, so it is tricky to give exact pricing. As a rule of thumb, you should expect to pay at least double for a DSM over a standard EPC.

How to Get an EPC on a Warehouse in London

Warehouses, like all other buildings being let and sold in the UK, generally require an EPC certificate. An EPC is an energy performance certificate, and it’s essentially a document that reflects how much energy it requires to power your building.

What is on an EPC?

An energy performance certificate is a document designed to reflect the energy efficiency of a property. It requires an assessor to do a site-visit to the warehouse to have a look around and make some basic notes. Don’t worry, they won’t need to poke around or do anything invasive, but they will need full access to the property in order to collect the information required.

EPCs come in two basic varieties: domestic and non-domestic. For a warehouse EPC, you’d obviously be looking at a non-domestic certificate. Non-domestic (sometimes called commercial EPCs) require a different kind of assessor, as the process is more complex.

Does my warehouse require an EPC?

Unlike most buildings, warehouses can sometimes be exempt from needing an EPC. This can be particularly useful for reasons to do with MEES (minimum energy efficiency standards), which we’ll come on to a little later.

The regulations stipulate that an EPC is not required for “Industrial sites, workshop or non-residential agricultural buildings that don’t use much energy”. That may sound a little vague (that happens a lot with property legislation), but it essentially amounts to this: if your warehouse has no heating system and no integrated office space, then you don’t need an EPC.

Will the EPC rating affect the value of my warehouse?

Generally speaking, not much. While domestic properties and office blocks tend to follow a pattern of increasing in value as the EPCs improve, warehouses, agricultural buildings, and industrial units don’t seem to be as affected. This is likely down to the fact that running costs for these properties tend to be fairly low, and things like lighting and heating bills are often far surpassed by other commercial expenses. That’s not to say that there’s no correlation – a warehouse which is cheap to run will always be more attractive than an expensive building – but most warehouses generally have low EPCs at the best of times. It’s the nature of the property type.

What are MEES and how do I ensure that my warehouse passes?

MEES stands for minimum energy efficiency standards, and it’s a set of rules brought in by the government in 2018 to ensure that buildings are only let out if they pass a certain minimum energy efficiency requirement. In order to let your warehouse, the MEES regulations stipulate that it must have an EPC of an E or above. 

For a warehouse trying to pass MEES standards, the first step is to check that your warehouse definitely needs an EPC (see above for guidelines). If it doesn’t then you don’t need to clear the MEES requirements and can let your property out, regardless of condition.

If you have a warehouse that has fallen short of the MEES guidelines, we always recommend looking first at your lighting. While in Domestic EPCs the lighting only has a minor impact, with warehouses and other commercial buildings it can make an enormous difference. Swapping from old style bulbs to LEDs is the single most cost effective way to improve your warehouse EPC.

If you’ve done that and are still struggling to hit the minimum requirements, you may want to consider updating your draught proofing, heating system, or insulation. If you’re not sure how to hit your MEES target, we’re here to help. We don’t charge anything extra for MEES advice on any of our EPCs ever, our expertise is available to everyone we carry out EPCs for, whatever your question.


If you’d like to book an EPC for your warehouse with London-EPC, fill out the form below and we’ll get back to you as soon as we can.

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Multiple Retail Units in Bromley

EPC Case Study: Commercial Retail Units in Bromley

Multiple Retail Units in Bromley

Whilst many people are looking for a one off EPC on their property, we do get clients who are seeking multiple EPCs on a portfolio of properties.

There are many reasons why you might need to get an EPC on all your properties; the business could be being sold, the bank may have requested them for financing purposes, or perhaps the client is requesting the EPC as part of a stock condition survey, or to understand their liability for the MEES (minimum energy efficiency standards). Sometimes a customer wants to get them all done at the same time for a discount, to ‘get them out of the way’. Whatever your reasoning, we are always happy to give you a quote for a batch job.

The cost of batch EPC’s is always going to depend on the number of properties and the locations, as well as whether they are commercial or residential. With larger projects, it is always helpful to provide plans of the buildings, but we realise this is not always possible.

Multiple Retail Units in BromleyMultiple Retail Units in Bromley

In this example, the client had 3 retail units of around 50-100m2 each, with around 20 miles between the multiple properties. As such, we were able to offer a small discount on our usual EPC price, but not much more than that. There was over an hour of travel time to get between the sites, and each site had different heating/AC systems and layouts, making each one a completely independent job with not a lot of time savings compared to doing 3 jobs for 3 different clients. This particular job was priced at £360+VAT for the 3 units, which would involve a half day of site visits, a half day of lodgement at the office, and around £100 of EPC lodgement fees to our accreditation body.

The site visits themselves went very smoothly. Each site had LED lighting, which makes a big difference to the final EPC rating. One property had a gas boiler for heating, whilst the other two were using portable electric heaters. In the end, each property came out to a C rating, which largely reflected the importance of LED lighting in a commercial, and particularly retail, environment, where the lights are likely to be on most of the day.

The client paid for the EPC by card so we were able to issue all the certificates the following day, ensuring no delays in getting their financing.

 

epc london bank mortgage

When will your bank ask for an EPC?

EPCs are only usually required for sales and lettings, or to apply for funding schemes such as the RHI or FIT payments. Sometimes, however, a bank may request an EPC as part of a remortgaging or a loan application.

Why does my bank need an EPC?

When a bank requests this, it is usually because the property is either being lent against directly or is being used as collateral for the loan. The bank want the EPC to ensure that the property at least has an E rating – if the rating is below an E, the value is going to be affected because it can not be legally let without improvements being made or an exemption applied for. This type of EPC is completely voluntary – i.e. there is no legal requirement for the EPC. If you want to get your loan or remortage etc. you will need to get the EPC done however and get a good enough rating.

It might seem a little odd, but this process is completely discretionary and something the bank is requiring only. It can be annoying to have to go through this process, but it will at least mean you have a valid EPC on file for the next 10 years, and you won’t need to get a new one should the property be let or sold in future.

What to remember

Remember to always check if you already have an EPC lodged previously against the address – often banks forget to mention that an existing certificate is perfectly acceptable, and clients may end up paying for an EPC which is unnecessary. You can check by visiting epcregister.com, or ndepcregister.com for commercial buildings.

If you need an EPC, you can always get in touch and we will get you booked in straight away! Whatever the reason for your EPC, we will be happy to help and ensure you get the best rating and the swiftest service possible.

New Build Supermarket in Ruislip

We often get requests for new build or ‘on construction’ EPCs. This particular client had a newly built supermarket that required an EPC in west London. With new build certificates there are some extra requirements that make them a little more tricky than your standard as built EPC.

How to Get an EPC on a Commercial New Build

We usually start by requesting some plans for the building, along with any documentation on the HVAC system and the lighting design. These should all be readily available for a new build, which is good news as it means we can achieve the higher ratings on the certificate.

The lighting design is a really good place to start, because the building will often have to be zoned in accordance with the design so that the lux and wattage levels can be entered in full. Often we won’t quote a job until we see the lighting design for a new build, as a particularly intricate design can add lots of time to the assessors paperwork.

New Build Supermarket in RuislipSite Visit for a New Build Commercial EPC

Despite the paperwork, we still have to carry out a site visit for new build commercial EPC’s. For the Ruislip supermarket this was carried out following installation of the HVAC (heating, ventilation, and air conditioning) system and towards the end of the fit out process. It was a particularly wet and windy day when the visit was carried out, but the survey was completed!

The site visit is very useful to the over EPC rating because, although you can use the plans to model the building, nothing beats actually seeing the property on site. It also gives the project manager the chance to point out where anything may be different from the plans provided, and to clarify anything that is not clear in the documentation.

The Ruislip Supermarket Overall EPC Rating

Most commercial new builds achieve a very good EPC rating because, even when there is a lack of documentation for a certain item, you can still use modern building regulations defaults, which are generally very good. In this case, the client provided nearly all the necessary information, with the one exception being the air permeability test results, which was not available at the time the EPC needed to be issued.

As you might expect, the property achieved an A rating on their EPC. With some new builds an A rating is sometimes missed due to a lack of information provided by the client, but in this case good communication and responses to requests for more information meant we could get them over the line.

We recommend you pull together the following information if at all possible:

  • Lighting Design, or at a minimum, specs for the lighting, as well as light;
  • U and K values for the building fabric – walls, floors, roof. T and U values for the glazing / doors as well;
  • Model numbers for the HVAC system, and ideally efficiency figures like the COP, SCOP, EER and SEER. For some systems there are other figures we may request, like heating control information, power factors, air leakage test results, heat recovery systems and SFP;
  • Any extractors or mechanical ventilation system we would be looking for the extract rates and the SFP (Specific Fan Power);
  • Air permeability test results;
  • Letter confirming the new address for the property;
  • Plans for the building – ideally ones to show the general layout of the building rather than technical drawings for the electrics or the HVAC.

Obviously with some new build projects this data may not always be readily available, especially on smaller projects. This is where it is important to communicate with your EPC assessor and find out whether there are alternative pieces of evidence that can be utilised. Often there are ways around the problem that can ensure you get the rating you deserve for the building. Fortunately in this example the rating came out in that A bracket.

north london office epc

Office EPC in North London

We often get requests for EPCs on office buildings. This particular office in North London was a vacant 4th floor work place in a larger complex. The property was due to be rented shortly and so we needed to visit and carry out the EPC survey very quickly.

What does London EPC charge for office EPC certificates?

For any office unit under 100m² and all on a single floor, we charge £120+VAT. This covers any commercial unit inside the M25, with a small excess for travel if we need to travel further out.

This North London office space itself was around 300m² of mostly open plan office, along with a toilet and some communal circulation areas. The cost in this instance was £250+VAT.

Heating

This office had a central boiler, but no air conditioning. Many North London buildings of this size have an air handling system as both their heating and cooling, but this one was an exception, being somewhat older than the average office. The boiler however was a very efficient modern one, providing heat to radiators in the building. It did also provide hot water to the building.

Building Fabric

The office building itself was a concrete construction with abundant windows effectively creating a curtain wall. The windows themselves were not particularly efficient because of their age, but the good news is that this is a mid floor office, with the floor and ceiling both leading to other heated spaces. This really helps the final EPC rating because it means only the walls (and windows) are heat loss areas.north london office epc

Lighting

Much of the lighting in this office is either compact fluorescent or tube style fluorescent. Although older technology than LED, these forms of lighting are not too bad in terms of efficiency. There are of course more efficient alternatives, but the lighting will not drag the EPC rating down too much in this property.

North London Office EPC Final Rating

So there is certainly room for improvement in this office, but the property is good enough for rental and reaches a comfortable D level EPC rating, just 3 points away from a C. The client was advised that there are some opportunities to improve the EPC rating further, but otherwise a relatively efficient space considering the age of the building.

EPC Case Study: Nursery in Streatham

When it comes to non-domestic EPCs, most properties are relatively easy to access and survey. Warehouses, offices and shops will generally be open during working hours, and there’s usually someone available to open up for the survey if not. However, with certain properties there can be issues surrounding access – schools and nurseries are a prime example of these situations.

EPCs and Accessibility: Working Around Business Hours

When carrying out an EPC, it’s essential to be able to take photos in and around the property. Earlier this year, we were called out to undertake an EPC on a nursery in the Streatham area, and because of the various sensitivities around a school/nursery environment, the only way we could do this was out of school hours. This particular nursery closed at 6pm, so we travelled to Streatham for an evening site visit.

Nursery EPC Ratings: Feed-in Tariff Eligibility?

The nursery was in the process of having solar PV installed, and wanted to know their rating in order to apply for the feed-in tariff. However, the fact that the nursery was connected to a church further complicated matters, as the owners wanted to know if they could apply for the feed-in tariff on the church as well. Places of worship are exempt from EPC requirements, but the nursery is not. If applying for the feed in tariff, the church would need to meet EPC rating requirements.

A D rating is required to meet the requirements of the higher rate feed in tariff, but this is often very difficult for older buildings such as a church.

We discussed the issues with the client and agreed to carry out separate draft EPCs for the church and the nursery in order to determine if either would be eligible for the grant. Following the visit, the data was entered into the software and drafts generated.

Nursery vs. Church EPC ratings

As expected, the old draughty church scored badly with a G rating, meaning that even with improvements such as new lighting, it would be very difficult to make the PV system viable. Nevertheless, the nursery came out to a D rating, meaning it was eligible for higher rate FIT.

The end result meant that the client could confidently go ahead with installing their panels safe in the knowledge that the nursery met all the efficiency standards for the higher rate FIT.

Retail Shop in Leyton – Going From a G to a C

Retail Shop in Leyton – Going From a G to a C

We recently helped a client in Leyton, East London who had a very low rated EPC. On the face of it, they were really worried that the whole property was unrentable and that it would cost thousands of pounds to get that E rating they needed (according to the MEES regulation). They should not have been worried, we were on the case!

Initial Low Rated EPC

We arrived at the Leyton retail unit in July, and did an initial EPC. The property has electric heaters only and a combi boiler for hot water. The shop has a ground floor and basement, with a residential property above. Lighting throughout the property was halogen, which was an immediate red flag, and sure enough, the rating produced when the EPC was entered into the software was a G. This means that the new lease that was due to be signed could not go ahead until improvements were made to the efficiency of the building.

How We Improved Their EPC Rating

In some cases, there is quite a bit of work involved figuring out how to get the rating up, but in this example our years of experience told us that dealing with just one aspect would get the rating up significantly. Let’s call it a light bulb moment.

Lighting is really important for both office and retail spaces. The lights are likely going to be on all day long, which means any improvement in the efficiency of the lighting is going to save money and make the building much more efficient. We ran a simulation through our software whereby the client installed LED lighting throughout the building – the good news is that by installing LED lighting the property suddenly went from a G to a C rating!

The Final EPC Rating

We held off lodging the EPC as it was, and the owners of the retail unit decided to go away and get the new lighting installed. They contacted us a month or so later once the work had been done in order to arrange a revisit to Leyton. The good news is that, because we hadn’t lodged the original certificate, we could offer a discount for the revisit and we only charged a call out fee to collect the evidence we required in order to lodge a revised certificate. A simple short visit to collect this photo evidence was done, and the next day the EPC was issued at the C rating.

The client can now be content with a property that more than meets the current regulations, and indeed they will be covered for most conceivable increases in the Minimum Energy Efficiency Standards as well. The certificate I valid for 10 years on any future leases the client takes out on the property.

How to Get a Commercial MEES Exemption

How to Get a Commercial MEES Exemption

Do the MEES apply to my property?

Whereas in the domestic sector, where every privately let property in England and Wales is subject to an EPC, the commercial side of MEES has a few types of let that are not covered. If your commercial property falls under any of the following then you do not require an EPC and therefore no exemption is needed:

  • Properties rented with leases lasting 99 years or more
  • Properties rented with leases lasting 6 months or less
  • Properties that are do not require an EPC:
    • Listed or officially protected buildings where the minimum energy performance requirements would unacceptably alter it
    • A temporary building only going to be used for 2 years or less
    • Buildings used as a place of worship or for other religious activities
    • Industrial commercial sites, workshop or non-residential agricultural buildings that doesn’t use much energy (this generally amounts to including any warehouse space with no attached office or heating system)
    • Any detached building with a total floor space under 50 square metres
    • Any property due to be demolished by the seller or landlord and they have all the relevant planning and conservation consents

How can I get a MEES exemption for my commercial property?

To be exempt from commercial MEES rules, your property must be filed with the Private Rented Sector Exemption Register. The register is the same regardless of whether your property is a pub, a warehouse, a theme park, or a shop. There are several ways to get on the register, but each comes with it’s own necessary paperwork.

Below we’ve run through each exemption and what is needed for filing for it. Unless indicated otherwise, all of the exemptions are valid for 5 years from the date of issue:

A recommended wall insulation measure would have a negative impact on the building

  • The written opinion of a relevant expert that the property can’t be improved to an E rating because a recommended wall insulation measure would have a negative impact on the property

 

All relevant improvements have been made and the property remains below an E

  • A recommendation report that shows any energy efficiency improvement recommended for the property. This could be an EPC report, a report prepared by a surveyor, or a Green Deal report.
  • Details of all recommended energy efficiency improvements which have been made at the property, including the date of installation.

 

The property is below an E and there are no improvements which can be made

  • A recommendation report that shows that no improvements can be made. This could be an EPC report, a report prepared by a surveyor, or a Green Deal report.

 

A recommended energy efficiency improvement does not meet the seven year payback rule

  • Three quotes from qualified installers for the cost of purchasing and installing the energy efficiency improvement
  • Confirmation that you are sure that the improvement does not meet the seven year payback rule, including the calculations made to show this

 

Consent to an energy efficiency improvement was refused or made subject to unreasonable conditions

  • Evidence that consent for an energy efficiency improvement was required and that this was asked for, and that consent was refused or granted subject to unreasonable conditions

 

The installation of specific energy efficiency measures will devalue the property by more than 5%

  • A report from an independent RICS surveyor that provides evidence that the installation of a relevant measure would devalue the property by more than 5%

 

You have recently become a landlord under circumstances that qualify the property for an exemption

  • The date that you became the landlord
  • To explain which of the qualifying circumstances apply

Is it worth getting a commercial MEES exemption?

The process for commercial MEES exemptions can be both time consuming and complicated, and even once completed it doesn’t provide quite the guarantee you might expect. Given that MEES are a locally enforced piece of legislation, local authorities are open interpret it in different ways, with some viewing the commercial exemption register as effectively non-binding. A standard commercial MEES exemption is set for 5 years, but unless your local authority is willing to honour this you may find yourself in trouble down the line.

While exemptions are certainly possible for commercial buildings, our advice at London EPC is to first explore how you might be able to reach the E-grade minimum requirement first. In many cases it is much easier than you might first imagine for a commercial property to reach this level, especially with the assistance of our expert surveyors, who are committed to producing the best possible certificate for your property.

If your first EPC does not reach the required grade, our surveyors will take you through all the cheapest and most effective ways to increase your points without finding yourself out of pocket. This can be as simple as paperwork and changing out some light bulbs. On most occasions, the low cost upgrades recommended by our surveyors will get your property to a MEES compliant grade at a much lower cost than the necessary paperwork for the exemption register would have been.

If you have any questions about how or if you should apply for a commercial MEES exemption, feel free to send us an email or give us a call.

EPC Retail Unit in Catford

EPC Case Study: Retail Unit in Catford

This client contacted us needing an EPC for their small retail unit in Catford. The unit is only around 30m² with a toilet and shop floor.

What does London EPC charge for retail EPC certificates?

For any retail unit under 100 and all on a single floor, we charge £120+VAT. This covers any commercial unit inside the M25, with a small excess for travel if we need to travel further out.

Heating and water

Arriving at the property in Catford, we see a simple mid-terrace shop with a flat roof. The only external walls are at the front and rear; clearly there is no external wall or cavity insulation as these are standard 9 inch brick walls. The roof also has no insulation as far as we can tell, which will again negatively impact the EPC.

The lighting is always going to be crucial for a commercial spaces and retail units, because the lights are going to be on pretty much all day everyday in your typical shop. The good news is that these lights were all LED, which improves the rating significantly on this type of commercial property.

Construction and lighting

There is no fixed heating in the retail unit, and because the space is retail, we therefore have to enter the worst case scenario in to the EPC software for the heating, which is an electric room heater. If the space was a workshop or a warehouse, it could be entered as an unheated space in the software because heating is not considered a necessity for that kind of space. However under these circumstances the lack of fixed heating system in the retail unit had a negative effect on the final EPC score.

There is also an electric water heater at the rear – these small units are actually great for smaller spaces like this. They don’t take up much room, and they are also quite efficient because they don’t store much hot water in them, instead only supplying hot water when required. This limits the heat loss and helps bring up the EPC.

Retail EPC in Catford: Final Rating

The retail unit was very simple to enter into the software. It had some good things going for it – namely the hot water and the lighting – but also some not so good points in terms of the heating and insulation. The final EPC rating was a D. This was mostly due to the lighting. Indeed, if the property had halogen lighting or another inefficient system, the rating would have been much lower, and perhaps even unrentable as per the MEES regulations.