The MEES seven-year payback test determines whether a specific improvement is required of a landlord. If a measure's energy cost savings don't recover its cost within seven years at current prices, it isn't required — and the landlord can register an exemption.
MEES does not require commercial landlords to bring a property to EPC E (or eventually EPC B) at any cost. It requires them to make all cost-effective improvements — improvements that recover their cost within seven years at current energy prices. Once all such improvements are made, the landlord may register an exemption even if the resulting EPC is still below the minimum standard.
The test is applied per improvement, not to the property as a whole. For each potential measure — a new heating system, additional insulation, LED lighting, on-site generation — the landlord calculates whether the energy cost saving from that measure over seven years equals or exceeds the installation cost.
If it does: the measure is required. If it does not: the measure is not required, and the landlord may register an exemption for that specific improvement.
The energy cost saving used in the calculation must reflect current energy prices at the time of the assessment. Historically low energy prices in 2019–2020 made many improvements fail the test; current prices at 2026 levels make substantially more measures cost-effective. The calculation is not static — it reflects the price environment at assessment.
Once a landlord has made all improvements that pass the seven-year payback test, they may register an all-improvements-made exemption on the government's PRS exemptions register, even if the resulting EPC is still below EPC E (or below EPC B from 2031 for larger buildings).
The exemption is valid for five years. After five years, it expires and the landlord must reassess — repeating the payback calculation for each improvement at the prices then prevailing. If circumstances have changed (energy prices higher, equipment costs lower, new technology available), some improvements that previously failed the test may now pass, and the all-improvements-made position must be reassessed.
Battery storage and on-site generation reduce the property's energy operating cost — the annual energy cost saving is a measurable, metered figure. Whether the HNordic installation passes the seven-year payback test for a specific property depends on three variables:
1. The system configuration and capital cost (determined at the site assessment stage)
2. The annual energy cost saving produced by that system at the property (projected at the site assessment stage from the energy profile)
3. The current electricity tariff structure (the site assessment uses current prices)
A property where the HNordic installation produces a seven-year payback (or better) cannot register an exemption for that improvement — it is a required measure. A property where the payback exceeds seven years can register an exemption for that improvement and, if no other required improvements remain, register the all-improvements-made exemption.
At commissioning, HNordic provides:
These documents form the evidence base for a MEES compliance review or exemption registration. A property owner who has installed the HNordic system and wishes to demonstrate that they have made all cost-effective improvements uses this documentation as part of their submission to the PRS exemptions register.
See also: What is MEES and the EPC B announcement? · What is a commercial EPC? · Full FAQ