Link Business Rates to Energy Performance Certificates

A new report by the influential ‘Policy Exchange’ today calls on the Government to link business rates to the EPC in order to incentivise landlords to invest more in energy efficiency.

The report suggests that the Government should establish a new Energy Efficiency Delivery Unit that will encourage investment in business energy efficiency to help improve business productivity as well as reduce carbon emissions.

The report mirrors a small scale trial undertaken in Northern Ireland which linked energy efficient new build homes with rebates on Council Tax. This is something that Elmhurst has long believed to be the right way forward for the property, the occupants and the landlords.

The Reports Key recommendations are:

  • The Government should establish an Energy Efficiency Delivery Unit that can bridge the gap between viable projects and available capital. The unit should mirror the Heat Network Delivery Unit and offer expertise, certification and finance for project development to both public and private institutions.
  • ESOS (Energy Saving Opportunity Scheme) needs to be extended to cover public sector institutions where the energy saving potential is large and cost effective – like the NHS, defence and education – and reporting on progress should be mandatory.
  • Government intervention should focus on landlords rather than tenants and use a combination of tighter regulations and fiscal incentives, including linking business rates to energy efficiency.
  • Evidence suggests Climate Change Agreements (CCAs) have been a weak driver of businesses’ energy efficiency and adverse effects of the Climate Change Levy (CCL) on economic performance are unsubstantiated across most sectors. Therefore the discount on the CCL that businesses gain under CCAs should be made more stringent and tied to sector deals as part of the industrial strategy.

Joshua Burke, Energy and Environment Research Fellow, who wrote the report, said:

“Improving energy efficiency is amongst the easiest and cheapest ways to decarbonise our energy system. Businesses and public sector organisations spend the equivalent of nearly 5% of GDP (£22bn) on energy every year but too many organisations still aren’t investing enough in energy efficiency. It needs to be seen as a major strategic investment which is both good for the environment and good for profitability.”

Nick Park, Group Head of Energy Policy Development at Centrica, which also supported the research, said:

“By gaining a better understanding of their energy use, businesses large and small can save money, improve operational performance and become more resilient. Improving energy efficiency provides a golden opportunity for businesses and the public sector to improve productivity and unlock future growth opportunities.”

Stuart Fairlie – Technical Director at Elmhurst  “We welcome the report, which clearly highlights the need to widen ESOS and to give financial benefit to those landlords that make their buildings more energy efficient. The idea of an Energy Efficiency Delivery Unit would help landlords make the correct (informed) decisions on what is best to do for their building. The EPC provides the base ‘asset’ position, upon which good decisions can be made. Incentivising people to make the correct decisions is the next step in the journey.”


To download the full report:

https://policyexchange.org.uk/wp-content/uploads/2017/09/Clean-Growth-1.pdf

For further info:

https://policyexchange.org.uk/publication/clean-growth-how-to-boost-business-energy-productivity/

 

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