Commercial EPC and MEES: what the rules mean for you

If you rent out a commercial building in England or Wales, or you rent your shop, office or unit from someone else, an Energy Performance Certificate (EPC) rating can decide whether the lease is lawful. This guide explains the rules in force today, what the government said in June 2026 about tightening them, and what to do about it.

What an EPC and MEES actually are

An EPC grades a building from A (best) to G (worst) for how efficiently it uses energy, based on its fabric, heating, lighting and ventilation. It is a rating of the building, not of your supplier, your tariff or how carefully you use energy.

MEES stands for Minimum Energy Efficiency Standards. In the privately rented non-domestic sector, it is a legal floor: the building must have an EPC rating of at least E, unless a registered exemption applies. The rules sit in the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015. Scotland and Northern Ireland have separate EPC and energy-efficiency rules, which this page does not cover; check the Scottish Government or NI Direct guidance if your property is there.

Where the line is today

• Since 1 April 2018, a landlord could not grant a new lease (to a new or existing tenant) on a building rated F or G without an exemption.
• Since 1 April 2023, a landlord cannot carry on letting an F or G building under an existing lease either, unless an exemption is registered.
• E is the legal minimum right now. Nothing above E is compulsory yet.

The duty falls on the landlord. If you are a tenant, you do not have to pay for an upgrade just because the rules exist, but your lease may say who pays for works, and you may be asked for access.

What the government said in June 2026

On 18 June 2026 the government published an interim response to its earlier consultations on raising the standard. The main points are:

• EPC B from 2031 for privately rented buildings over 1,000 m², "where cost-effective". Earlier proposals had been 2030 for everything.
• The interim EPC C step for 2027 has been dropped.
• Buildings of 1,000 m² or less stay at EPC E, with no new deadline.
• The seven-year payback test and the existing exemptions are kept.

These changes need secondary legislation before they bite. Open questions, still to be settled in a full government response later, include whether penalties will rise and whether tenants will get formal duties not to undermine a rating. Until new regulations pass, the existing rules apply as they are.

Most small shops, salons and offices are well under 1,000 m². For them, E is the standard for the foreseeable future. Treat anything about B as a larger-building rule unless the final regulations say otherwise.

Penalties

Local authorities enforce MEES. Maximum penalties for letting in breach are set by how long the breach lasts and by the building's rateable value:

Situation	Penalty
Let in breach for less than 3 months	10% of rateable value, minimum £5,000, maximum £50,000
Let in breach for more than 3 months	20% of rateable value, minimum £10,000, maximum £150,000
Providing false or misleading information on the exemptions register	Up to £5,000

The authority can also publish details of the breach. Penalty policies are set locally, so the figure actually charged can be lower than these maximums.

As an illustration, a landlord with a unit on a rateable value of £30,000 who lets it in breach for more than three months works out 20% as £30,000 × 0.20 = £6,000. That is below the £10,000 minimum, so the maximum penalty is £10,000.

The seven-year payback test and exemptions

A landlord must make recommended improvements only where they are cost-effective, meaning they pay for themselves in energy savings within seven years. Worked example: a measure costing £6,000 that saves £1,000 a year pays back in 6 years, so it counts. A £9,000 measure with the same saving takes 9 years, so it need not be done. If the building is still below E after every qualifying measure, the landlord can register an exemption.

Other exemptions cover refused third-party consent (for example from a superior landlord or planning authority), improvements that would knock more than 5% off the property's value, and works that would harm the building's structure. They have to be registered on the PRS Exemptions Register with evidence, and they do not last forever.

How MEES touches your energy bills

An EPC does not change your unit rate or standing charge, and suppliers do not price contracts by EPC grade. The link is indirect. A poor rating usually means poor insulation, old heating or inefficient lighting, so you use more kWh and your bill is higher. Upgrades such as LED lighting or better heating controls can raise a rating and cut usage together. A business energy audit will give you a prioritised list, and some projects qualify for grants or loans.

Common situations

You are a tenant and your landlord says the building is below E

Ask them in writing what their plan is. It is their legal problem to fix, not yours, though the lease decides who pays for works and whether you must allow access. Do not agree to pay for a major upgrade without checking the lease and, ideally, taking advice.

You are buying or leasing a building

Ask for the EPC before you commit. A building with a weak rating can mean higher running costs for you through usage, as well as a landlord with work to do. If you are choosing between two units, the better-rated one will usually cost less to heat and light, which you can estimate with our business energy cost calculator.

You own your own premises and do not let them

MEES applies to rented buildings. An owner-occupier is not caught by it, although the same improvements still cut your bills.

Next steps

1. Look up your building's EPC rating and check it is current: a non-domestic EPC is valid for 10 years. A new one is needed when a building is built, sold or let, and commercial EPCs are issued by accredited assessors.
2. If you are a landlord and the rating is F or G, get the recommendations report and cost the measures against the seven-year test before your next letting.
3. If you are a tenant, ask your landlord for the current EPC and its recommendations before you sign or renew.
4. If you are a landlord with empty units, also read our landlord energy guide.

Check the live position on gov.uk before acting; the 2026 proposals may have moved by the time you read this.