Owen Sweetman, Director, EQONIC Group
The Institute for Government – a leading think tank working to make government more effective – recently reported that the UK’s buildings are largely draughty and energy inefficient. An astonishing 90% of the country’s 29 million homes require efficiency upgrades.
Decarbonising our buildings is no longer a question of if, but when and how. Much needs to be done if we are to hit our net zero target, but where do we start?
Understanding what a sustainable building looks like is key. Having energy efficient appliances, better insulation, smart thermostats, and sustainably sourced furniture are all ways of making a building more environmentally friendly. However, generating renewable energy (from sources such as solar or wind), converting it into electricity and storing it until it’s needed (or letting others use it by feeding it back into the grid) is the most effective way to make a difference.
Data from a 6-month trial with a leading property developer of one of our residential battery and energy storage systems (ESS) showed that it was able to provide just under half of all the building’s total energy needs. It captures the energy via solar panels, then stores and distributes it via our smart ESS. During the summer months it provided 90% of power with the battery just taking an average three to five hours to charge each day.
So how do we start to start to build greener buildings quickly and at scale?
We need a clear financial case for decarbonising our buildings – and I’m pleased to say that this is now coming to light. Research from Savills shows that home buyers are now placing greater emphasis on greener homes. Nearly six in ten (59%) are willing to pay more for a home primarily powered by renewable energy and 71% said a home’s EPC rating is now playing an important role in their buying considerations.
It does cost money to upgrade buildings to make them more sustainable, but the data shows that these costs can be recouped in the future in the form of cheaper energy bills, an increase in the value of the building, and its rental yield for landlords.
Analysis from the Regulatory Assistance Project (RAP) showed that energy efficiency measures have already saved the average British household about £1,000 a year in energy bills – and that with further insulation and home improvements, costs could halve future bills too. At time when the cost of living is rising rapidly, these savings can make a real difference.
Research from Knight Frank and Building Research Establishment (BRE) found that buildings with a ‘Very Good’, ‘Excellent’ and ‘Outstanding’ BREEAM rating (Building Research Establishment Environmental Assessment Method) on prime central London office spaces led to rent premiums ranging from 3.7% to 12.3%.
Greener homes mean that buyers can get better insurance and mortgage interest rates, and lenders seeking greener properties to help balance their portfolios are now embracing this concept. Barclays are now rewarding borrowers that buy greener homes, with lower mortgage rates – and more lenders are now following suit which is encouraging to see.
So, what does the future look like, and can we make the changes needed in time?
There is legislative framework in place to help us. The government has set out its Future Homes and Buildings Standard, which requires all new build homes from 2025 onwards to produce 75-80% less carbon emissions than current homes and eventually become net zero.
Landlords will also need to make changes over the next year. By April 2023, the Minimum Energy Efficiency Standard (MEES) regulations will come into force prohibiting them from leasing out commercial buildings with an EPC rating of F or lower – and those continue to do so risk a fine ranging from £5,000 to £150,000.
As a nation we are starting to become more aware of the negative impacts of unsustainable buildings. Research from NatWest and IHS Markit reveals that over half of homeowners (52%) have plans for green home improvements over the next decade.
It’s no secret that in the coming years, the UK will have to make enormous financial commitments, but given the vast social, economic, and environmental benefits, it is an important and worthwhile investment.