Government confuses the property industry with energy efficiency legislation

A lack of information and confusing guidance from Government has resulted in wide-spread ignorance, particularly in the commercial property sector. Since the implementation of the Energy Performance of Buildings Regulations 2007 came into force on 6 January 2009, there has been a growing awareness amongst property owners and their advisors. However, we believe that the Regulations are being ignored mainly because there is a lack of understanding and the benefits that can be gained from the Energy Performance Certificate.

At a recent meeting with The Minister for Housing, Ian Austin and senior Civil Servants at the Department of Communities and Local Government (CLG), David Natusch, Managing Director of Estate Energy Solutions discussed the impact of the Regulations on the property industry. Of significant interest was the Government’s view that the property industry (owners, occupiers and professional advisors) have embraced these Regulations wholeheartedly. Research shows otherwise.

Can the Government be excused from being naïve? The Government is driving forward their target for a low carbon economy with all new buildings to be zero carbon by 2019 with gusto. The speed of change in legislation is impressive. However with the numerous certifications, assessment methods and codes, there is much confusion. The industry has been confused and angered before; in 2002 and again in 2006 Building Regulations caused widespread confusion. The Government is to revise the Building Regulations again in 2010, specifically Part L which deals with the conservation of fuel and power. The consultation process has not been without challenges and we wait to see the final drafting.

There is already some realisation within the property market that efficient buildings are more valuable than their counterparts. Investment funds have been set up and some Blue Chip companies will only invest in buildings which are categorised as good or excellent under the BREEAM certification scheme. As attitudes and changes in behaviour continue correlation between a building’s energy performance and its value will become more apparent.

The main challenges we face in the UK are with improvements in energy performance of the existing building stock. Property owners and occupiers are being encouraged to carry out improvements measures, but with little incentives other than the high price of energy. Advice from property professionals is available, but the reality is that this costs money and the results are not immediate. It is really only home owners who can benefit from financial incentives to carry out improvements. Behavioural change and attitudes towards energy conservation needs to continue together with better access to clearer, practical and comprehensive information and advice. The EPC represents a first stage in this process, highlighting measures that can be undertaken.

In the commercial sector, particularly those organisations with high energy consumption are being targeted with a new initiative taking effect on 1 April 2010. The Carbon Reduction Commitment (CRC) Energy Efficiency Scheme is a legally binding emissions trading scheme affecting those businesses with annual half-hourly metered energy use over 6,000MWh (which equates to an annual electricity spend of over £500,000).

We believe that the industry is confused with the amount of legislation and the speed of change. The value of a property can be improvement through investment in energy efficiency measures. Similarly the profitability of a business can be improved. Before embarking on capital expenditure, it is important to get practical advice which provides for a holistic view of the whole building and the equipment and processes within. Preparation and planning for change is the first step for those wanting to do something positive.
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