How to save energy: working with your landlord

If you do not own your property, it is always advisable to read the terms of your lease and discuss them with your landlord before making any permanent changes to the fabric of your building.

1. Access to data

Understanding your energy consumption should always be the starting point for energy-saving projects. While it is common in commercial properties for the tenant to be directly responsible for paying gas and electricity bills (which means you will have access to your own meter), this isn’t always the case.

If your utilities are wrapped up in an all-inclusive rent or service charge, you are likely to be in one of three situations:

• Full visibility: You have access to energy consumption data via a meter, or submeter if you are in a multi-let building. This provides full transparency over the energy you use
• Partial visibility: A meter/submeter is in place but only your landlord has access to it. You might have access to some information in the form of a breakdown of your service charge, but ultimately you are dependent on what the landlord is willing to share with you
• No visibility: You pay an all-inclusive fee with no visibility of energy consumption, either because there is no submeter in place, the landlord apportions utilities usage based on floor area for example, or because the landlord has chosen to charge a flat fee to all of its tenants

If you find yourself with no or little access to data, your first action should be to have an open conversation with your landlord to ask for a little more detail about your energy consumption. They may be willing to provide you with data or install a submeter for you, which in most cases is a relatively low-cost process.

If not, it’s still worth trying to calculate consumption based on the information you have at your disposal, such as an audit of the equipment you use or what your landlord charges per metre squared of floor space.

Example

Smith Goodfellow, a small office-based PR consultancy in Stockport, needed to measure its energy consumption but utilities are included in its rent and are not separately metered. The company is working with its landlord to explore the possibility of introducing separate metering, but in the meantime, it has calculated its consumption using estimates.

“Calculations are best estimate[s] based on guideline usage statistics for the size of our premises, number of employees and the equipment we use. This is clearly not an ideal situation, and we will be continuing to attempt to gather more accurate data. But, in the meantime, we feel it is better to start with a rough estimate than to not start at all”

Smith Goodfellow in its 2021 Impact Report

2. Understanding the terms of your lease

Before you make any changes to your building fabric or building services, read the terms of your tenancy agreement carefully. It is common to find clauses that demand a property is returned to its original state at the end of the lease, which means you may have to undo any changes you make (also known as ‘reinstatement’). You may also be required to seek approval for any changes made to the building and there is no guarantee the landlord will agree.

It pays to have a good working relationship with your landlord and start an open, two-way conversation as early as possible to overcome any issues that may prevent energy efficiency measures from being taken.

3. Selling the benefits

Generally speaking, it’s easier to make the case for fixed improvements that provide a continuous benefit beyond the length of your lease. This includes improvements to building fabric, such as insulation or double glazing, and fixtures and fittings such as LED lighting or solar PV. Even after your lease has ended, the landlord and future tenants will still be able to benefit from these improvements.

In many of these cases, there is a good argument for sharing the upfront cost with your landlord, so it’s worth asking whether they are willing to contribute. They may be willing to pay in full in return for a rent increase.

• Property value: Point out that improved energy efficiency can increase the value of their property, especially as more and more companies begin looking for energy-efficient buildings to support their net zero goals and/or provide a more comfortable working environment for staff
• Preventing disrepair: Energy efficiency measures can also extend the lifetime of the building, for example by preventing damp ingress or mould
• Supply capacity: Reduced energy consumption means reduced pressure on the electricity supply to the site, which is a particularly attractive feature for manufacturers looking for sites with ample capacity for energy-intensive machinery. If the landlord has a single incoming supply to multiple properties, reduced energy load also lowers the risk of supply constraints on other tenants
• Regulatory compliance: If your building has a poor Energy Performance Certificate (EPC) rating, it may be worth pointing out to your landlord that they will likely be required by law to make improvements in future anyway. From April 2023, landlords will not legally be able to rent out a building with an EPC rating below E, and this requirement will ratchet up in future years. There are also other requirements on the horizon, including plans to introduce mandatory disclosure ratings for energy and carbon performance in buildings above 1,000m². We also know that gas boilers will likely be gradually phased out over the coming years

If your landlord is unwilling to contribute to the costs of improvements but is happy for you to pay yourself, you can always explore pay-as-you-save finance solutions. Either way, unless your lease is relatively short, many efficiency measures will more than pay back in full before your tenancy ends anyway.