New deadline looms for non-residential property owners

Come 7 December 2022, a substantial proportion of South Africa’s non-residential buildings will be required to submit and display an Energy Performance Certificate (EPC). The requirement, which was gazetted in December 2020, is aimed at making buildings in South Africa more energy efficient. That’s necessary not only to help reduce strain on the national electrical grid but also to help the country meet its emissions commitments going forward.

Globally, the built environment accounts for around 40% of carbon emissions and 28% of energy consumption, making it a critical target for improved efficiencies. 


Broadly speaking, the requirement applies to offices, entertainment facilities, educational institution buildings, and places of public assembly such as indoor sporting facilities and community centres. Buildings also have to be more than two years old and have a net floor area of over 1000m2 for government buildings and 2000m2 for privately owned buildings to be impacted by the certification requirement. 


“We all know that there’s a strong focus on ensuring that, as a country, we’re moving into a low carbon economy,” says Kagiso Mahlangu, Director: Head of Real Estate and Conveyancing Practice at CMS South Africa. “The certification requirement is quite specific but it’s certainly a step in the right direction.


The certification, which is administered by the South African National Energy Development Institute (SANEDI) on behalf of the Department of Mineral and Energy Resources, grades buildings based on how much energy they use per square metre. The EPC gives buildings an energy efficiency grading between A and G, with A being the most efficient and G being the least efficient.  


In order to obtain an EPC, the building owner (who is ultimately liable for doing so) will have to gather information, including annual electricity consumption, the net floor area, information on any areas to be excluded, and vacancy rates. They must then contract a South African National Accreditation System (SANAS) accredited inspection body (IB) to audit the information. The IB will, in turn, submit the energy performance value to SANEDI, which inputs it into the National Building Energy Performance Register. From there, a unique number is generated for the EPC and sent back to the IB, which issues the EPC so that it can be displayed at the entrance of the building. 


The certification is primarily aimed at making building owners aware of areas where they could be more efficient. It also means that tenants and other users of these buildings can make more informed decisions about their occupancy and use of them. 


“It’s going to make building owners more conscious of their energy footprint,” says Mahlangu. “Whilst currently, you can get a Green Star Certification for a building which is an internationally recognised mark of a buildings environmental and sustainability aspects, this type of certification is not enforced by legislation. EPC requirements are enforced by law and make this a mandatory requirement for qualifying building owners. And I think that if your rating is low, you’ll be motivated to put measures in place to make your building more energy efficient.”


As Nomaswazi Nkabinde: Candidate Attorney in Real Estate and Conveyancing Practise at CMS points out, while the consequences for poor energy grades may be low the same is not true for non-compliance. 


“Building owners who fail to obtain and display an EPC could be fined up to R5 million and the possibility of imprisonment for up to five years,” she says. “It’s a heavy responsibility on the shoulders of any building owner.”


It’s also worth noting that the EPC is only valid for a period of five years, after which the building must be assessed again. 


“Having to do this every five years is quite a big deal,” says Mahlangu. “It comes at a not insignificant cost for building owners, especially those who don’t play in the same leagues as major commercial property owners.” 


EPCs have been in effect in Europe in the UK since 2007, where they are required in order to sell a property. Given the specific requirements for EPCs in South Africa, it’s likely that the role they play in South African building sales will be slightly different. Because EPCs can be viewed by anyone, buyers will have a much more comprehensive overview of the use of energy sources of a building. That in turn will further incentivise building owners to be as energy efficient as possible. 


“Whether you are classified as an A or a G, the rating will act as a motivating force to ensure that building energy efficiency is kept front of mind to ensure that we are all playing a role towards climate change,” Mahlangu concludes.




Read the original publication at CMS.

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