80% OF UK COMMERCIAL PROPERTIES AT RISK: HOW LANDLORDS CAN STAY AHEAD OF ENERGY EFFICIENCY REGULATIONS

As The Times reported recently, more than 80 per cent of all commercial properties in England will effectively be rendered unlettable from 2030 without substantial investment if proposed Minimum Energy Efficiency Standards (MEES) regulation changes take effect.

Beyond legal compliance, enhancing an Energy Performance Certificate (EPC) rating presents an opportunity for commercial landlords to reduce energy costs, attract high-quality tenants and protect long-term property value. Here, we talk to David Stretch, our Head of Customer Real Estate Solutions, who offers one practical step commercial landlords can take to improve EPC ratings and shares how Centreco renewable energy solutions can help in the long term.

Why is the 80% statistic such a wake-up call for commercial landlords?

It’s staggering. It highlights the sheer scale of commercial properties that will fall short of meeting potential future EPC requirements.

Currently, (April 2025), commercial and industrial rented properties are required to have an EPC rating of E or above.

By April 2027, it is understood that properties will need to meet an interim target of at least EPC C, and by, 2030, an EPC rating of B or above to remain lettable with commercial landlords facing financial penalties and potential asset devaluation if they fail to comply.

The government’s recommendations on energy efficiency requirements are still under review, with changes expected by the end of 2025. However, as reported in The Times article, what is clear is that many commercial properties are still falling short – struggling to meet even an E or a D rating, let alone a C.

What are the biggest challenges in improving EPC ratings?

Many of the commercial landlords we speak to worry about upfront costs, disruption to tenants and confusion over what might be the best solution to future proof their portfolios. However, a strategic, phased approach that starts with high-impact, low-disruption upgrades can make the challenge more manageable and can offer an attractive financial proposition.

Technologies like solar energy can provide an immediate win with a strong return on investment (ROI) and a fast payback period.

How does solar energy fit into an EPC improvement plan?

A commercial solar energy system will provide a direct uplift in the energy performance of a building, making it one of the most effective first steps to take towards improving a property’s EPC rating.

Energy independence and lowers operational costs

A Centreco solar energy system generates consistent renewable energy on-site, reducing reliance on expensive grid electricity.

To put it into context. A rooftop or ground-mounted system can generate electricity at an equivalent cost rate of 2-4p per kWh, over a 25-year-plus period. Significantly lower than current grid rates, which are averaging 20-30p per kWh (as of April 2025).

Additional revenue stream

This opens an opportunity whereby landlords can sell the energy generated by the Centreco solar energy system to their tenants, with the positive differential to grid pricing, the tenant can be offered low cost renewable energy and the commercial landlord can make an attractive yield whilst improving the energy rating of the property.

Win-win for tenants

Tenants save on their energy bills and gain long term protection from energy inflation by avoiding fluctuating energy costs and sudden price spikes.

Are there any other benefits to an improved EPC rating for a commercial landlord?

Beyond helping to avoid legal and financial penalties by contributing to a higher EPC rating, a solar energy system also enhances property value and marketability, making it easier to attract and retain tenants and, notably, more appealing to funders and banks when landlords are refinancing.

Businesses are increasingly prioritising sustainability and seeking energy-efficient premises to support their ESG strategies. Solar energy for tenants provides commercial landlords with a crucial competitive edge, improving tenant retention and appealing to energy-intensive businesses looking to reduce their Scope 2 and Scope 3 emissions.

To implement solar, what would the first step be?

The first step is assessing the properties’ roof spaces and forecasting power generation potential, cost savings, payback, and ROI. This should include funding illustrations and an environmental impact review showing potential carbon reduction.

There is a range of funding models that will enable commercial landlords to implement an energy-efficient upgrade like a Centreco solar energy system, with repayments covered through energy savings or income.

Centreco’s comprehensive end-to-end service ensures a seamless transition, providing consistency, reliability and minimal disruption to your business from start to finish.

Are there other EPC-related upgrades commercial landlords can take?

Yes absolutely. For commercial landlords, improving EPC ratings isn’t just about compliance, it’s an opportunity to build a long-term, mutually beneficial relationship with tenants.

Once renewable energy is in place, landlords can progressively enhance their energy strategy tailored to the needs of their properties and tenants. These upgrades might look like the installation of heat pumps, high-efficiency heating and cooling systems (HVAC) or energy storage solutions to enable landlords and tenants to store excess solar energy.

Centreco is part of Certas Energy a leading UK independent distributor of energy products and, a division of DCC plc, a FTSE 100 global services group driving energy transition through its Cleaner Energy In Your Power strategy.

This means customers can access the full range of alternative power generation solutions, energy consultancy, metering and monitoring and net zero journey planning for the longer term. Even for more complex scenarios like limited gas access or reliance on oil or LPG, we can provide tailored solutions including alternative low-carbon fuels.

What should commercial landlords take from the proposed Minimum Energy Efficiency Standards (MEES) regulation changes

Commercial landlords who delay, risk financial and regulatory setbacks. A strategic approach not only boosts EPC ratings but also cuts costs, attracts tenants, and safeguards property value – it makes good business sense.

With expert guidance and a clear energy strategy, landlords can turn EPC compliance from a challenge into an opportunity that delivers lasting financial and sustainability benefits.

Take control of your energy strategy with expert support designed to deliver real, measurable progress – call Centreco on 01257 208 943 today.