Energy efficiency in commercial property needs greater incentives and hasher penalties to drive take-up, report finds


The government should overhaul the Green Deal for commercial properties, spend millions on marketing it and increase fines for commercial landlords that don’t meet their energy monitoring duties,a report has concluded.

The report is the result of an inquiry chaired by Labour peer Larry Witty and Conservative MP Oliver Colvile into how to reduce energy demand from commercial buildings.

Published by Westminster Sustainable Business Forum and think tank Carbon Connect, the report recommends that the government gets tough on firms that didn’t meet their energy monitoring requirements and overhauls the Green Deal (see box).

Colvile said there was a need to “increase the resilience of our businesses against the threat of climate change”

He added: “The obvious cost savings, coupled with improved productivity that can be realised from energy efficiency, makes it quite clear that now is the time to invest on a large scale.

“To do that requires government intervention – to raise awareness, guarantee low cost loans, stimulate the market and incentivise the landlords.”

The report said that commercial buildings were responsible for 10% of the UK’s greenhouse gas emissions and that rising energy prices and taxes were a threat to the UK’s profitability.

It said that the commercial sector was currently “failing to link business growth to energy costs”.

The report said the Green Deal represented an excellent opportunity to improve the existing commercial building stock but awareness of the scheme was low.

It said: “A renewed focus on the Green Deal will require a funding boost and this can be provided either through funding from central government or via a short-term raise of the Local Authority borrowing cap.”

It added that the government should match its marketing spend on the Green Deal to date, £3.74m, on marketing the scheme in the non-domestic sector.

The report also said there were “split incentives” for energy efficiency in the commercial sector because tenants and landlords did not always have the same amount to gain from improving a building’s energy efficiency.


Recommendations for government

  • Compile a database of the energy performance of commercial buildings
  • Require reports written under the Energy Savings Opportunities Scheme to be signed off by a senior executive
  • Embark on a national advertising campaign for the commercial Green Deal as well as a street-by-street promotional campaign.
  • Issue guidance to Local Enterprise Partnerships encouraging the uptake of energy efficiency measures
  • Remove the golden rule from the non-domestic Green Deal, which mandates that total savings from a Green Deal must outstrip the cost
  • UK Green Investment Bank to fund low-interest Green Deals for SME’s
  • Publish case studies of projects from the London Re:Fit programme, which has funded upgrades of commercial buildings in London in recent years
  • Integrate international performance measurement standards into the Green Deal
  • Introduce strong penalties for landlords that don’t meet their minimum energy performance certificate (ECP) obligations
  • Enforce legislation requiring display energy certificates (DECs) in its own buildings
  • Develop a routemap for increasing energy efficiency in the commercial sector with industry
  • Extend the length of time that landlords can receive empty property rate relief from Local Authorities to 12 months to encourage landlords to undertake energy efficiency projects