Edition 2020 Ninth edition

4. Commentary
4.1. General
4.1.1. 
Among its measures most likely to be relevant to valuations of property, the Direc-
tive requires member states to establish:
•
Integrated energy performance standards, based on both the thermal charac-
teristics of each building and its renewable energy systems, to be:
•
Set by each member state for all buildings;
•
Enforced not only for new buildings and but also for existing buildings 
subject to a "major renovation"; and
•
Energy performance certificates (EPCs).

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European Valuation Standards 2020
4.1.2. 
Alongside those, the Directive requires that by 2021 all new buildings meet a "nearly 
zero-energy use" requirement. It also imposes regimes for:
•
New buildings to have self-regulating devices to regulate the temperature of in-
dividual rooms or zones, and for these to be added to existing buildings, where 
technically and economically feasible, when "heat generators" (using fuel com-
bustion, electric resistance or heat pumps) are replaced;
•
Provision for electromobility where a building is new or subject to major reno-
vation 
(see 5.4 below)
;
•
The regular inspection of larger heating and air conditioning systems with re-
sulting recommendations.
4.1.3. 
The Directive further requires the European Commission to adopt an "option-
al common Union scheme" for rating the "smart readiness" of buildings, to "cover 
features for enhanced energy savings, benchmarking and flexibility, enhanced 
functionalities and capabilities resulting from more interconnected and intelligent 
devices" so that it can be adapted to "the needs of the occupant and of the grid and 
to improve its energy efficiency and overall performance".
4.1.4. 
The valuer will need to understand the provisions applying in the member state 
where the property is situated.
4.2. New buildings — Nearly zero-energy
4.2.1. 
"Member States shall ensure that:
a. By 31 December 2020, all new buildings are nearly zero-energy buildings; and
b. After 31 December 2018, new buildings occupied and owned by public authorities 
are nearly zero-energy buildings."
(Article 9(1))
4.2.2. 
With nearly zero-energy buildings defined at 3.5 above, this is a strict obligation 
although Article 9(6) allows member states not to apply it in "specific and justifiable" 
cases where the cost-benefit analysis over the economic cycle of the building in 
question is negative.
4.3. Existing buildings and "major renovation"
4.3.1. 
While energy performance standards are to be set for existing buildings, the 
Directive does not require their enforcement save when this is triggered by a 
"major renovation".

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4.3.2. 
"Major renovations" — The Recitals point out that "major renovations of existing 
buildings, regardless of their size, provide an opportunity to take cost-effective 
measures to enhance energy performance"
 (Recital 16)
.
4.3.3. 
Article 7 of the Directive states: "Member States shall take the necessary measures 
to ensure that when buildings undergo major renovation, the energy performance 
of the building or the renovated part thereof is upgraded in order to meet minimum 
energy performance requirements …"
4.3.4. 
A valuer could be instructed by a client concerned as to whether proposed works 
amount to a "major renovation" with the consequent requirement under the Direc-
tive to meet current energy performance standards. The Directive sets out two 
options from which each member state is to select its tests to determine whether 
works are a "major renovation":
"'Major renovation' means the renovation of a building where:
a. The total cost of the renovation relating to the building envelope or the technical 
building systems is higher than 25% of the value of the building, excluding the 
value of the land upon which the building is situated; or
b. More than 25% of the surface of the building envelope undergoes renovation.
Member States may choose to apply option (a) or (b)."
(Article 2(10))