Display Energy Certificates

Why require the certificates?

Display Energy Certificates (DECs) are part of the implementation of the Energy Performance of Buildings Directive by the United Kingdom. Energy Performance Certificates (EPCs) have already been introduced on the construction, sale or letting of buildings over 10,000 square metres, and will be rolled out to smaller buildings later this year. For more information on EPCs, see our Analysis of the legislation, together with the transitional provisions.

DECs promote the improvement of the energy performance of buildings by raising public awareness of energy use. They form part of the final implementation of the European Directive.

When does it come into force?

From 1 October 2008, every occupier of a building which requires a DEC must display it in a prominent place where it is clearly visible to the public.

What sort of buildings need a DEC?

A DEC will be required for a building which:

• has a gross floor area (measured in accordance with the Building Regulations 2000) of over 1,000 square metres; and
• is occupied by a public authority or an institution providing public services to a large number of people; and
• is frequently visited by those people.

"Building" includes part of a building which is designed or altered for separate use. The Guidance contains illustrations of how the regulations will apply where a public authority occupies only part of a building, and/or shares occupation with another occupier.

Public authorities include central and local government, NHS trusts, schools, executive agencies and statutory regulatory bodies. An institution providing public services is one which provides services traditionally associated with local or national government, or traditionally funded by the taxpayer. In determining whether an institution is providing a public service, it should be considered whether:

• the institution is autonomous;
• the service is one that has been provided by central or local government in the past;
• local or central government has a duty to provide the service;
• local or central government plan, or fund, the provision of the service.

Some buildings occupied by public authorities and institutions provide public services, but not in a form which requires frequent visits by members of the public. The Guidance states that since a DEC is designed for public use, there is no reason to provide one if it will never, or only exceptionally, be seen by a member of the public. For this reason buildings which are visited only by employees and delivery/maintenance services are not covered. However, the Guidance states that the public sector should set an example, and that if there is any doubt over whether a DEC is required, it would be good practice to produce one in any event.

Because the DEC should be visible to visiting members of the public, the Guidance states that it should be no smaller than A3 in size, and that it should ideally be placed in the reception area or entrance.

What must a DEC contain?

A DEC has two components: an operational rating, and an asset rating.

Operational rating

The operational rating is a measure of the carbon dioxide emissions from the building caused by its consumption of energy, calculated over a period of 12 months. The rating will be on a scale of A-G, as with EPCs. The rating will rate the building against the performance equal to a typical building of that type. Typical performance for that type of building would have an operational rating of 100. A building that results in zero CO₂ emissions would have an operational rating of zero, and a building that resulted in twice the typical CO₂ emissions would have an operational rating of 200. The Guidance lists the factors which will contribute to a building's operational rating. These include the building's location (the benchmark will be adjusted to take account of local weather conditions), floor area, and occupancy.

Going forward, the certificate will also include the operational ratings for the building shown in past DECs covering the previous two years. This will show whether the building is improving.

Asset rating

This equates to the rating under an EPC. The requirement to include an asset rating in the DEC will not apply to an occupier who does not have an EPC. This might be the case, for example, where occupation is commenced prior to the full roll out of EPCs on 1 October 2008, or if for some reason the occupier was not provided with an EPC by its seller or landlord when it should have been.

Transitional provisions

Until 3 January 2009, the regulations state that there will be no duty to display a DEC if the occupier:

• has been in occupation for less than 15 months; and
• entered into occupation prior to 1 October 2008, or moved in after that date but was not provided with an EPC by its seller or landlord.

However, the Guidance does not quite reflect this. Where occupation began before 1 October and an EPC was provided (e.g. because the building was more than 10,000 square metres (from 6 April) or 2,500 square metres (from 1 July)), the Guidance states that a DEC showing the asset rating (as set out on the EPC) is required.

Prior to 4 January 2009, an operational rating is not required until the occupier has been in occupation for 15 months. From 4 January 2009 onwards, there are complex rules which, in certain circumstances, appear to allow the operational rating to be calculated on a pro rata basis if necessary.

A DEC will be accompanied by an advisory report, which is similar to the recommendation report that comes with an EPC and contains recommendations for improving the energy performance of the building. The occupier must have a valid advisory report in its possession at all times.

How long will a DEC be valid?

A DEC is only valid for 12 months and so must be renewed annually. The 12 month period will run from a date nominated by the energy assessor, usually by agreement with the occupier. This cannot be more than three months after the period over which the operational rating is calculated. The government has gone further than required by the Directive, which permits DECs to be up to ten years old.

Advisory reports are valid for seven years from the date of issue. This is considered sufficient time for the occupier to have had an opportunity to act on the recommendations, following which a review would be appropriate in the light of new technology.

Who is responsible for obtaining a DEC?

Since the responsibility is on the occupier, landlords will not have to pay for DECs which their tenants are obliged by law to display.

Where private organisations share a building with an authority which is under an obligation to display a DEC, there is no obligation on the private organisation to display a DEC provided that the area occupied by the private organisation is designed or altered to be used separately from the part occupied by the public authority.

Of course, any occupier can display a DEC if they wish, and the Guidance suggests that private organisations may like to display a DEC on a voluntary basis.

How will the requirement be enforced?

As with EPCs, enforcement will be through Trading Standards Officers issuing penalties to those who fail to comply. The penalty for failure to display a DEC is £500. The penalty for failure to possess a valid advisory report is £1,000. The Guidance states that it will still be necessary to commission the documents, otherwise further offences may be committed.

What should be done to prepare?

Unlike EPCs, DECs also contain an operational rating for the building. Occupiers who will need a DEC should start to collate:

• data on activities carried out in the building
• the floor area of the building
• meter readings
• details of the building's assets that affect energy consumption (e.g. insulation, building services etc)
• EPC and associated recommendation report for the building (if any).

More information can be found at Annex A to the Guidance.

Who can carry out a DEC?

Many public authorities and institutions may wish to get their employees trained and accredited as energy assessors. This is permissible as long as these employees are members of an accreditation scheme, to ensure they meet the requirement to act in an independent manner. A list of accreditation schemes can be found in the Guidance or at http://www.communities.gov.uk/epbd. Otherwise, a private accredited assessor can be appointed. A list of energy assessors who are qualified to carry out DECs can be found at http://www.ndepcregister.com/.

What next?

The European Commission is currently consulting on proposed changes to the Energy Performance of Buildings Directive. The Commission has acknowledged that some provisions of the Directive are unclear. In addition, the Commission considers that the Directive requires strengthening in places in order to ensure that the energy performance of buildings is improved. In relation to DECs, the consultation paper states that "The public sector can and should have an exemplary role motivating other property owners to carry out energy efficiency improvements. The role of the public sector could be further strengthened beyond this information stage". One of the questions asked of consultees is whether the public sector should play a stronger role to act as a leading example for energy savings in buildings. Another question is whether the 1,000 square metre threshold for DECs should be changed or eliminated. See the Background Information Paper for the consultation for more details. Responses to the consultation can be submitted here; the consultation closes on 20 June 2008.

Further information

The government guidance on DECs is available here.

More information on the method of assessment and measurement periods can be found in the document "The Government methodology for the production of Operational Ratings", located on the Government's Energy Performance of Buildings website.