Why commercial buildings are still failing to meet energy efficiency standards
With the announcement of new government energy standards in the UK, many commercial building owners have been left with no choice but to implement sufficient energy efficient standards. The new legislation states that all commercial property owners will be banned from leasing their building if they fail to comply with the minimum “E” rating energy efficiency standard.
However, many businesses in 2017 are still resisting to adopt energy efficient practices in their buildings. Which raises the question, if energy efficiency saves money and will be obligatory from 2018, what’s preventing upgrades and retrofits to existing commercial buildings?
These 5 factors will help explain why:
The focus on energy efficiency is often disjointed from other business aims and targets, largely due to its estimated minority cost in comparison to other expenses e.g. employment costs. Very few businesses have benefited from increased payback periods, which is not surprising considering the initial cost of implementing an energy management system, building insulation and investing in more efficient electrical systems. These high expenses are often too great an undertaking for businesses already struggling financially. The disconnection between departments is visible in larger businesses where one unit of the business focuses on improving energy usage while others fail to see the importance.
▹ Lack of communication
Lack of communication and conflicting priorities can become a problem for larger businesses with multiple departments. This can contribute to unnecessary costs for businesses, where one department causes interruptions by getting energy efficient practices underway without the backing of the rest of the business. Even if the business manages to resolve this disconnect, the upfront investment necessary to implement energy efficient measures and management systems are often thought to be too costly. SME’s in particular may struggle to find the finance necessary for energy efficiency when other business expenses are a higher priority.
▹ Behaviour change
Some facility owners and managers can be hesitant when it comes to change, be it updating current systems or implementing new technology. Retrofits of electrical systems, insulation and energy monitoring systems are often expensive and can cause significant disruptions in the process. These projects that require upfront investment and don’t provide initial returns are the least likely to gain approval. With durable electrical switchgear and heating and cooling systems lasting years, building owners struggle to see the necessity for change and added expenses.
▹ Split incentive
With many businesses not owning the building they operate in, split incentives can come into play. While landlords are responsible for building repairs, tenants are in charge of their office’s operating costs. This becomes problematic with many large buildings working off one shared meter, regardless of the number of tenants. It’s difficult to allocate energy costs to each office and for businesses to improve their energy efficiency when they’re unaware of their exact usage. As a result, energy efficiency costs are often side-lined in the overall business model when compared with other expenses.
▹ Lack of understanding
Failure to meet energy standards can often be down to a lack of awareness and understanding of the issue. Not only do some commercial building owners/managers fail to recognise the importance of energy efficiency, they also don’t know how to accurately monitor their usage and what steps to take to improve it. When the benefits of energy efficiency aren’t known, energy management systems and environmental practices will continue to be ignored. When facility occupants aren’t educated on how to gather and interpret their energy usage they are likely to source external help in order to improve. Therefore a lack of understanding can also increase costs for commercial buildings.
There are many reasons that can explain commercial buildings resistance to improving their energy usage, but with stricter government standards soon to be introduced, the outlook on energy efficiency may finally change. Will 2017 be the beginning of a more environmentally friendly, energy efficient commercial building industry?