Preparing for the minimum energy efficiency standard

By Carl Ghinn, Managing Director at Fixmart

It was recently announced that from April 2018, a new legal standard for minimum energy efficiency will apply to rented commercial buildings. Currently, properties have an energy efficiency rating that goes from A to G, where F and G are the worst performing. However, following the government’s announcement to reduce carbon emissions by 57% by 2030 on 1990 levels, a new law is being introduced which will set a new minimum standard of E. This means existing tenancies cannot be renewed or granted unless they meet that standard where the regulations apply.

A concern for many within the property development sector, is the additional costs the regulations will occur. With some properties, upgrading may be as simple as replacing a few windows or adding in some loft insulation. For others however, it may require installing new HVAC systems, adding wall insulations or plumbing and electrical solutions. In addition, upgrading or including advanced systems that comply with the new regulations may take more time to install. As a result, property developers could face increased costs in labour or penalties if a project over-runs.

Despite these risks, there are several benefits. These upgrades will result in an increase in the value of the building as the systems will be newer and more energy efficient. It will also become more attractive to clients as they won’t have to complete any additional changes to comply with the regulations fundamentally avoiding a penalty. However, with the deadline looming, property developers need to think about the energy efficiency performance of their portfolio so that they can plan well ahead to minimise the impact.

As a supplier to the M&E and HVAC industry we are constantly working with our customers to find ways that will enable them to remain compliant and benefit from changes in legislation, rather than be hit with a large expense. So, I would advise property developers to consider these four things when they begin to upgrade their buildings:

1) The right products

One of the biggest causes of a low energy rating is poorly installed systems and faulty products. For example, ductwork that has been wrongly installed may cause air leakages, which in turn can result in higher energy bills and increased CO2 emissions. Furthermore, systems which have not been fixed properly may fall causing damage and injury to both occupants as well as other parts of the building.

It is important therefore that you seek expert advice from a trusted supplier before any upgrades take place. Ensuring that the products being used are the correct weight, length and material for its purpose, and have been installed properly and safely, will save valuable time and mitigate the risk of additional costs down the line.

2) Prefabrication

According to the HVAC body BESA, offsite construction is now used in 90% of UK projects and accounts for 3-4% of the total construction market. Simply put, it means cutting and assembling parts of a build in a warehouse before delivering them on site. There are many benefits for using prefabrication on a project. One of the biggest is cost saving as it requires fewer people, takes less time, and potentially reduces risk of delays.

We offer a number of bespoke solutions which are designed to help our customers save time and labour on site. This includes pre-cutting channel to our client’s exact requirements and assembling products to create custom-made supports. I would thoroughly recommend considering this method when upgrading as it will not only save time but also money.

3) Cost security

Price fluctuation is one of the major risks in the construction world and is a challenge that our customers face daily. During the tender process contractors are understandably expected to cost every element, however this is often for projects that may not start for at least 6 months. If their tender is accepted they will be held to this price regardless of any marketplace changes. Yes, in some cases prices do go down, but in the majority of cases they go up leaving the contractor with a much-reduced margin or even a loss.

Therefore, it is important that you work with a supplier who understands these challenges and can offer solutions to mitigate this. For example, In October 2016, the price of steel increased by 8%. This was a huge problem for some of our customers but, as we follow the markets closely, we had decided to bulk buy a large number of products including, stainless steel screws and cable ties, before this increase. With the additional benefit of our 60-day credit terms, we were able to soften the blow for our clients who may need those products within the next six months subsequently reducing the risk involved.

4) This won’t be the only minimum standard increase

As with most regulations, this standard will be reviewed on a regular basis – especially as the government push to reach their targets. Therefore, it is important that a property developer takes full advantage of this opportunity and upgrades as much of their building as they can to reach the highest energy rating possible. Not only will this ensure that you will comply for any future potential changes to the legislation but it will also avoid additional costs in the future.

To conclude, I believe that the new minimum energy efficiency standard should be seen as a positive change that benefits both property developers and their clients. However, I would still encourage companies who need to upgrade to seek advice from an expert who understands the challenges and can help mitigate the cost of any work needed.