Delivering A Sustainable Promise

According to David Frise, Head of Sustainability at the Heating and Ventilating Contractors’ Association, specialist building services contractors risk falling behind in the sustainability race as new competitors flood into the market as opportunities for retrofitting existing homes and offices grow (HVCA).

More commercial landlords are willing to invest in making their properties more energy efficient because it allows them to charge a higher rent while also lowering their operating costs – a double positive whammy for the bottom line.

Following an extensive refit that included replacing the old central heating system, improving draught proofing, and reducing the use of artificial lighting, one office block in London successfully increased rents from £20 to £26.50 per square foot.

According to the Carbon Trust, cutting carbon emissions from offices by one-third by 2020 would save UK businesses £4 billion in operating costs. They describe upgrading heating, using low-energy lighting, and increasing the use of natural ventilation as “simple and low-cost” measures that can be implemented quickly and widely.

As a result, developers and commercial property owners are scrambling to raise funds to complete the necessary renovations.

Utility companies, such as Centrica and EDF, are preparing to provide technical services, as are major commercial players such as M&S and Tesco, with even more lining up to provide finance, including some of the world’s largest hedge funds.

The Green Deal
Energy efficiency is now a multibillion-dollar industry. The Government’s Green Deal, which goes into effect next year, will significantly increase the number of private investors in our market. Initiatives such as the LDA’s Buildings Energy Efficiency Programme (BEEP) will seek to bring together practitioners, planners, and funders in a collaborative effort to roll out large-scale building retrofit programmes. There is a large prize for building services firms to compete for, but we must not be complacent.

Financially savvy operators will move quickly to secure contracts – and they speak a language that business clients understand. IT providers are also well-positioned to engage clients on a strategic level in terms of delivering sustainability. They may well subcontract parcels of work to specialist contractors after securing large contracts, but the most lucrative parts of the deal will be snatched up by others, leaving us with the ‘hospital jobs’ – the low margin, commodity work. However, the humble contractor is at the receiving end of the delivery mechanism. We know better than anyone how to make low-carbon technologies work by integrating them with existing buildings and systems.

And the Golden Rule should be that these solutions deliver on their promises. Clients are increasingly purchasing services rather than products. Single technology suppliers can only promise delivery; they cannot deliver complete solutions – and delivery is the financial model on which all of this is based. The Green Deal loans are conditional on being repaid with actual energy savings – if the systems do not deliver carbon and energy savings, the financial model will collapse.

Currently, 77 percent of HVCA members are involved in providing sustainable building services, with 62 percent actively installing renewables and 45 percent project managing entire sustainable projects. The core expertise exists within the sector, but it must be leveraged to capitalise on new opportunities, because “business as usual” will not be enough to secure our sector’s economic future.

There are also significant technological shifts taking place. The government has made it a priority to electrify the country’s heating supply and decarbonize the National Grid. Installing gas boilers is not the industry’s long-term future.

Other fast-moving areas include district heating schemes and energy from waste, and biogas-powered building services will play a growing role. The business opportunities exist, but they are beginning to look very different from what specialist contractors are used to – they may be more subtle and not as obvious as in the past, so we must adapt to avoid falling behind.

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Rip Out
We must also optimise what is already in place and improve the performance of ‘traditional’ building services technologies. Ripping out and replacing on a large scale is not sustainable. The Feed-in Tariff system risks distorting the market by incentivizing people to invest in an expensive renewable solution that may not be appropriate for their building, when a far better use of the money would be to improve what is already in place.

Building owners must understand the energy hierarchy principle, which states that basic improvements such as improving insulation, upgrading windows, adding controls to existing energy-consuming appliances, implementing solar shading to reduce overheating in the summer, and possibly looking to make better use of passive systems such as daylighting and natural ventilation to reduce energy demand should be prioritised. Only then should you consider additional technological changes to reduce energy costs and carbon emissions even further.

Green Green Deal loans could finance thousands of the basic energy efficiency upgrades that deliver major savings – both in terms of bills and carbon. As fuel costs rise over the coming months and years, these investments will start look even more attractive.

Last Updated on December 30, 2021

Indra-Gupta

Author: Indra Gupta

Indra is an in-house writer with a love of Newcastle United and all things sustainable.

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