How the 2022 Carbon Factor Change Impacts Your Commercial EPC Rating l HollenPlus
Since June 2022, the UK's updated SBEM v6.1 software has significantly reduced the carbon factor for electricity by over 50%. This means electrically heated buildings can often jump 1–2 EPC bands without any physical work, while gas-reliant properties may see their ratings drop.
Understanding the Carbon Factor Shift
In the UK, a Commercial Energy Performance Certificate (EPC) isn't a measure of energy used; it's a measure of forecast carbon emitted. To calculate this, the government uses "Carbon Factors", a multiplier that tells the software how much CO2 is produced for every kWh of energy consumed.
In June 2022, the government updated these factors to reflect the "greening" of the UK national grid. As we moved away from coal toward wind and solar, the electricity we use became cleaner.
Before and After the 2022 Updates:
| Fuel Source | Pre-2022 Factor (kgCO₂/kWh) | Post-2022 Factor (kgCO₂/kWh) | Impact Change |
|---|---|---|---|
| Grid Electricity | ~0.519 | ~0.233 | -55% (Better) |
| Natural Gas | ~0.216 | ~0.210 | Negligible |
Winners and Losers: Does Your Property Benefit?
1. The Winners: All-Electric Buildings
If your property uses electric to fuel the heating, for example through heat pumps or electric panel heaters, your building is a major winner. Because the carbon factor for electricity was halved, your building’s calculated emissions dropped overnight.
Result: Many landlords have seen ratings jump from an E to a C or a D to a B simply by commissioning a new assessment under the latest software and carbon factors.
2. The Losers: Gas-Heated Assets
While the factor for gas didn't change much, the relative performance of gas against electricity did. In the eyes of the SBEM methodology, gas is no longer the efficient choice it was in 2013.
Result: Buildings relying on gas boilers may see their ratings stagnate or even drop a band as the EPC calculation methodology now favours electrification.
Why This Matters for MEES 2030 Compliance
The Minimum Energy Efficiency Standards (MEES) are tightening. By 2030, all commercial let properties must achieve an EPC Band B.
If you haven't updated your EPC since June 2022, you might be making investment decisions based on unreliable old data from a histroic EPC. You could be planning a £50,000 upgrade that you don't actually need, or you could be unaware that your current "Safe E" rating is about to drop to an "Unlettable F" under the new rules.
Strategic Recommendations:
Audit Pre-2022 EPCs: If your certificate was issued before June 15, 2022, it was calculated using the old carbon factors, which are now outdated.
Prioritise Electrification: If you are replacing a heating system, the shift in carbon factors makes Heat Pumps the clear winner for long-term compliance.
Contact HollenPlus: We provide precise, tailored advice as to the current position of your building, and if required, EPC Pathways, which assess what the best value options are to achieve compliance, delivered through our asset management mindset.
Frequently Asked Questions
How can HollenPlus help?
We tackle these challenges every day. Our best in class EPC Advisory service will be able to guide you through the process, from assessing the building, calculating the current EPC rating using current carbon factors, to advising on precisely which building upgrades make the most commercial sense for your building. For those buildings where it is either required or makes commercial sense, we bring in our Level 5 DSM EPC expertise to maximise the rating achieved. This option is available to all clients.
What is the current carbon factor for electricity in UK EPCs?
As of the 2022 Building Regulation update (Part L), the carbon factor for electricity is approximately 0.233 kgCO2/kWh, down from the 2013 factor of 0.519.
Will my EPC rating improve automatically?
No. EPC ratings are not updated automatically. To benefit from the 2022 carbon factor changes, you must commission a new assessment from an accredited Non-Domestic Energy Assessor (NDEA).
Can I still install gas boilers in commercial properties?
While legal, installing new gas systems will hamper the buildings ability to achieve compliance. The current EPC methodology penalises gas emissions, making it significantly harder to reach the mandatory EPC B rating required by 2030.