Solutions for Improvement
Business Models - The use of innovative business models can also help to bring smarter energy services to SMEs. This can be done through measures such as specific tariffs that correspond with a client’s needs (on cost or carbon), integrated data-driven energy efficiency projects (including installation and finance) and other ways of optimising efficiency by having access to usage data. Energy services must also be simple to understand and access, with a focus on the benefits. Furthermore, combining SMEs to expand services and lower the price to serve can help to reach economies of scale. This would offer cheaper access to energy supply contracts, energy efficiency installations, low carbon technology and finance.
Legal Agreements - The use of ‘green leases’ can offer a more climate-progressive legal approach. Green leases promote collaboration between landlords and commercial tenants, with key principles such as sharing data on energy consumption or more progressive joint investment strategies. A greater use and standardisation of such lease agreements would quicken the decarbonisation of privately rented, non-domestic building stock. Green leases also have additional provisions that impose obligations on landlords and
tenants to control and moderate the environmental impact of a property through various improvements.
Additionally, a more flexible alternative to a green lease is a memorandum of understanding. This is an agreement entered into between landlords and tenants that details how the environmental impact of the property should be managed. A memorandum of understanding is not legally binding but it is simpler to update and amend than a lease and is a faster method for agreeing environmental objectives between parties. Smart Energy Services - A new report recognising the findings from the BASEE programme found convincing opportunities for innovation in supplying smart energy services to SMEs. Smart energy services identify when energy is being used the most and adapts to shifts in use. These give SMEs more financial certainty with regards to energy bills, investment returns and payback periods for energy efficiency measures. These services can also identify fast and easy energy saving measures, such as systems calibration or behavioural measures, and may provide additional revenues like proposing demand side response for flexibility markets. Service providers such as energy companies or brokers should also use these live energy statistics to provide better schemes for SMEs that improve client relationships and credibility.
Conclusion
Finding ways to cut costs and take advantage of a great return of investment are essential to a successful business. Renewable energy can cut down a business’ energy costs in the long term as well as offer an easier solution to their utility needs. While landlords and tenants may be apprehensive at first to adopt or adapt to greener methods in a commercial setting, there may eventually be a need to do so and in time they will see the benefits of taking ownership of such methods.
rukhsar.aziz@haroldbenjamin.com
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THE LEGAL CORNER MAGAZINE | ISSUE 005 SEPTEMBER '23 | PLANNING, OWNERSHIP & THE ENVIRONMENT HB 14
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