A Long-expected Party: Government update to the Minimum Energy Efficiency Standards

As the Shire eagerly awaited Bilbo Baggins’ birthday celebration (in Tolkien's opening chapter, ‘A Long-expected Party'), for the last five years the real estate industry has equally anticipated a moment of clarity; a government response that would deliver certainty to investors on the future direction of the Minimum Energy Efficiency Standards (MEES) for non-domestic buildings. 

I’m sorry to say that we are still waiting. Instead, we have received a partial response to the government’s consultation on technical ‘Reforms to the Energy Performance of Buildings regime’, covering Energy Performance Certificates (EPCs), Display Energy Certificates (DECs), and CIBSE TM44 Air Conditioning Inspection Reports (ACIRs).  

The consultation sought views on a broad range of proposed reforms, including:

• Updating what EPCs measure through additional metrics
• Refining when energy certificates are required, by updating the rules for obtaining EPCs and DECs
• Managing and improving energy certificate quality
• Improving the accessibility and usability of building performance data
• Strengthening the quality and consistency of air conditioning inspection reports

Whilst the government’s recent response (21 January 2026) stops short of much called for reforms to reduce the current ten-year EPC validity period, the most anticipated question, what EPCs actually measure, has been addressed.

So, what do EPCs measure?

The government has confirmed plans to display four headline metrics for domestic EPCs. This marks a turning point, allowing occupiers to not only see how much it costs to occupy a space, but where the cost is used as energy, and the readiness of the building to intelligently reduce energy consumption.

The new headline metrics for domestic EPCs will be:

• Energy cost
• Fabric performance
• Heating system
• Smart readiness

These changes are intended to provide:

• Transparent performance signals to owners and occupiers
• Stronger alignment with retrofit and heat decarbonisation decision making
• Improved data to support policy development and green finance

While these changes focus on domestic EPCs, the implications for non-domestic assets are equally significant. Non-domestic EPCs will retain the current single carbon metric. This will maintain continuity for commercial assets and reflects a stronger focus on carbon reduction in the commercial sector, rather than solely energy cost reduction.  

Why this matters?

EPCs have been central to the UK’s energy efficiency framework since 2008 and are a critical delivery mechanism for future net zero ambitions. They underpin MEES across both the domestic and non-domestic private rented sectors and materially influence asset valuation through tenant attractiveness, planned refurbishment strategies, and long-term compliance risk.

In 2021, the Government signalled an intention to raise the minimum EPC rating for non-domestic properties from EPC “E” to “B” by 2030, possibly with an interim step of EPC “C” by 2027, however, no formal confirmation of this has been published. Given we are now in 2026, the interim 2027 milestone appears increasingly at risk.

In the absence of regulatory clarity, investors, asset managers, and occupiers, have pragmatically adopted EPC “B” as a de facto minimum standard when planning major capital works, to mitigate future misaligned asset risk. As a result, the average EPC performance across the London market has reached an EPC “B” through market forces alone.  

Further updates covering DECs, ACIRs, data quality, and wider governance arrangements are expected later in 2026. With luck, these will be accompanied by long-awaited clarity, and perhaps even a celebratory party on the future direction of non-domestic MEES themselves.