Scoping out the Commercial Green Deal

25th June, 2013

Since the launch of the Green Deal at the start of October, there has been much talk about upgrading the energy efficiency of the UK's housing stock.  Considerably less attention, however, has been paid to the scheme's application in the commercial sector and yet the programme offers a wealth of opportunities for businesses.
The appeal of the Green Deal is essentially the same for businesses as it is for householders - it enables companies to make energy savings without tying up cash flow in a heavy initial investment.  Although the Green Deal will eventually be available to businesses of all sizes, this straightforward funding solution is particularly appealing to SMEs and charities, as smaller organisations often have less disposable cash and borrowing power than larger corporations - making the Green Deal an attractive means of bridging the gap.

Landlords are a particular example where a commercial Green Deal may be appropriate, as it could help them achieve the minimum energy performance standards that will become mandatory from 2018.  Legislation introduced as part of the Government's Energy Bill will make it a legal requirement from 2018 for all privately rented properties to achieve a minimum energy performance certificate of E or above. 

This will affect about 20% of the buildings in the UK, many of which are leased to multiple tenants, meaning no one party is incentivised to upgrade the building.  While there is still much work to do, under a commercial Green Deal, the landlord could arrange for the necessary refurbishment work, with the costs being covered by the resulting savings in the tenants' energy bills.
As with any new initiative, there will naturally be some initial uncertainty about how the scheme will unfold in practice.  The process for commercial Green Deal is still undefined but it presents a significant opportunity and Carillion is already exploring how it could begin to take shape in reality.  Through our work on the Birmingham Energy Savers (BES) project and with other landlords and companies, Carillion is ideally placed to take on this challenge and is working with DECC to bring some of these scheme to life.
Carillion Services hope to report success in the coming weeks on pilot schemes they are currently running for a mosque, a care home charity and a multi-tenant commercial property under their management. 

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Story from  Sustainability Talk & News a Carillion PLC Initiative.

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