Minimum Energy Performance Standards have the ability to succeed in greening our buildings where incentives have failed
It was in danger of being buried under the sheer weight of policy announcements issued by the Department of Energy and Climate Change on its last day of term before the summer holidays. But last month’s release of the eagerly awaited consultation on Minimum Energy Performance Standards or MEPS (as they are affectionately known - particularly by the commercial sector) following months of silence, deserves much more attention.
It’s no exaggeration to say that this policy – which will make it unlawful for landlords to rent out the worst performing homes and commercial buildings from 2018 – is a potential game changer for the energy efficiency of our existing buildings.
The policy could directly affect around two-thirds of all non-domestic buildings and almost one-fifth of domestic properties. It has the potential to reach even further than that.
How refreshing it was to read that the government must “make sure” that improvements are made to the most energy inefficient properties in Ed Davey and Amber Rudd’s joint ministerial foreword.
Given that we have now lost two vital carrots in the Energy Company Obligation and the Green Deal Home Improvement Fund, maybe it’s now time to put some weight behind sticks in the domestic sector.
Minimum Energy Performance Standards will result in better, healthier homes that are cheaper for tenants to heat
In the non-domestic sector, this policy is seen as a key way to overcome the infamous landlord-tenant split, where landlords “don’t do” energy efficiency because only the tenants benefit.
Of course, the policy will bring major benefits to the people who occupy buildings of all kinds. It will result in better, healthier homes that are cheaper for tenants to heat. For fuel poor families and the social housing sector this will be particularly important, as tenants will save more money, making it less likely they will default on rent payments.
In the commercial sector, it will add value to properties, making them more attractive and in the long-term, more sustainable, with the benefits of cheaper energy bills for the businesses occupying them. The power of this legislation has already made commercial landlords sit up, assess their stock and start thinking about steps to improve it.
The government is obviously worried about how the work will be funded and has committed to ensuring that landlords “do not face upfront costs” for the required improvement measures. For homes, landlords will be expected to use the Green Deal scheme.
But in commercial buildings, the Green Deal is not very attractive, so landlords will be looking to ensure that retrofit work is cost-effective, with quick paybacks. While this has the potential to reduce the ambition of the policy it does mean that the Treasury is likely to give safe passage to the legislation. Hopefully the government will go further and put a trajectory in place so that the minimum standard can be strengthened over time to provide landlords with the certainty they need to invest for the long-term and maximise the savings to be made.
In an effort to ensure that this legislation makes it through the current parliament, the consultation period is just six weeks. To meet this tight timetable and ensure MEPS is on the statute books before the general election, industry must work hard with government to ensure it gets the detail right.
There is still a lot of devil in the detail to be resolved, but given that some of us might have put money on the likelihood of MEPS falling foul of coalition politics and vanishing without atrace, the fact it’s finally appeared alive and kicking from the green policy vault is indeed something to shout about.
Paul King is chief executive of the UK Green Building Council