Energy-efficiency planning report welcomed

By Ellie Bothwell

- Last updated on GMT

Related tags: Energy efficiency, Real estate, Lease, Energy conservation

The report highlights the 'split incentive' between landlord and tenant as a barrier to investment in energy efficiency
The report highlights the 'split incentive' between landlord and tenant as a barrier to investment in energy efficiency
UK property representatives have strongly welcomed a new report calling for the Government to help improve the energy efficiency of commercial buildings.

Building Efficiency​, a report from Westminster Sustainable Business Forum and Carbon Connect, states that commercial buildings account
for 10% of the UK’s carbon emissions and UK businesses are thought to be missing out on up to £1.6bn worth of savings through investment in energy efficiency.

It adds that many small and medium-sized enterprises (SMEs) and micro-businesses, including pubs, lack up-front capital and calls for the UK Green Investment Bank — a Government bank with £3.8bn of funding — to offer them low-interest loans to stimulate the market for energy efficiency.

'Split incentive'

It also highlights the “split incentive between landlord and tenant” as a barrier to investment in energy efficiency, arising from landlords not directly feeling the cost of energy bills, combined with tenants’ lease lengths being shorter than the payback periods on some energy-efficiency measures.

Andrew Whelan, director at EPCforProperty, which specialises in the licensed and leisure trade, said it was an “excellent” report and he “wholeheartedly agree[d]” with the recommendations.

'Political turmoil'

He said: “The case for investment is well made, but the political turmoil surrounding all aspects of energy policy is hindering investment. For example, the flagship energy policy, the Green Deal, is floundering in relation to domestic property.

“And there is strong scepticism the Green Deal will work in the commercial sector.”

There were a number of issues relating to the commercial sector, he said. The Green Deal had not dealt with these and was still squarely aimed at the domestic sector, “despite claims to the contrary”.

'Greater emphasis'

British Property Federation chief executive Liz Peace added: “There is a lot to be gained from focusing on energy efficiency in a non-domestic environment. New buildings are becoming more energy efficient, but as only around 2% of commercial buildings are replaced each year we believe there should be greater emphasis on energy-saving initiatives targeted at existing properties.”

However, Everard Cole associate Chris Rogers said the recommendations have the potential to provide a “further financial burden” on landlords and owners.

Related topics: Property law

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