Navigating the Challenges: Sectors Struggle with MEES Compliance in the UK

As the UK steps up its game to combat climate change, the Minimum Energy Efficiency Standards (MEES) have become a hot topic. While these standards aim to improve EPC ratings and reduce carbon emissions, different sectors face unique hurdles in meeting these requirements. Let's dive into some of the key challenges various industries encounter as they strive to comply with MEES.

The Retail Sector

Retail landlords face a variety of challenges, often relying on tenants' fit-outs for their ratings. Control and reporting of these fit-outs will be crucial moving forward. Many town centre retail buildings are old and not designed with energy efficiency in mind. However, a good LED fit-out and some air conditioning cassettes can significantly improve ratings. On the other hand, retail warehouses often use gas heaters, making it harder to improve ratings. Historic high streets with charming old buildings typically have outdated (or no) insulation and inefficient heating systems. Upgrading these structures to meet MEES can be incredibly costly, although the ‘7-year payback’ rule can avoid most big fabric improvements if the goal is purely MEES compliance.

Another challenge is the split incentive dilemma. This occurs when the landlord is responsible for upgrading the building, but the tenant reaps the benefits of lower energy bills. Convincing landlords to invest in energy efficiency improvements when they won’t see direct returns can be a tough sell.

The Office Sector

The office sector is not immune to MEES challenges either. Many smaller office buildings, especially those built in the 20th century, are heated by gas boiler/radiator systems, which can negatively impact EPC ratings. De-gassing these buildings can be disruptive and expensive.

Landlords with large, deep-plan office spaces might face issues with all-air systems, which consume a lot of energy for pumps and fans as well as the traditional gas-heated hot water that feeds them. Replacing these with VRF-type systems without disrupting tenant operations can be tricky, particularly for businesses that operate on tight schedules and cannot afford downtime.

The Industrial/Warehousing Sector

Industrial landlords face a different set of challenges. Industrial buildings like factories and warehouses often have large, open spaces that are difficult to heat efficiently without using flued gas air heaters. Although heat pump alternatives are available and good for carbon emissions and EPC ratings, they can be more expensive to run, making them unpopular with tenants.

Retrofitting insulation to large industrial spaces can be prohibitively expensive, but modeling suggests this is not always required. An unheated large space with electric heating or split air con units for office areas is often enough, but this depends on tenants whose use of the building fits with an unheated space. Many will need heating for their staff or storage requirements.

The Hospitality Sector

Hotels and restaurants have unique struggles, though as with retail they often relying on tenants' fit-outs for compliance. These businesses need to maintain a comfortable environment for their guests. Landlords whose tenants facilitate this with LED lighting, split air con (or VRF), and MVHR generally benefit from better ratings. Older hospitality venues may have more ‘domestic’ type heating arrangements, such as a gas boiler and radiators, which negatively affect ratings.

Conclusion

Across the board, landlords in different sectors in the UK face significant challenges in complying with MEES. Whether it’s the historic charm of town centre buildings, the complexity of office towers, the vast spaces of industrial and out-of-town retail sites, or the guest-centered focus of the hospitality sector, each industry has its own set of hurdles.

While the goal of improving energy efficiency and reducing carbon emissions is crucial, achieving this is no small feat. It requires careful planning and often creative problem-solving to meet the standards set by MEES.

Talk to us about how our in-depth knowledge, accurate EPC modeling, and common-sense compliance strategies can help you find a cost-effective way forward.