Archive for August, 2014

One-third of commercial properties could fail to meet new energy efficiency standards being introduced in 2018, making it difficult for landlords to let these properties.

A DECC consultation proposes to make it mandatory for commercial properties with an F or G EPC rating to have efficiency improvements made before they can be let from 2018, which they predict could impact 18% of properties.

However, a recent report by consultants WSP predicts 35% could be affected due to a tightening of EPC scores over time. For instance, a building receiving an E rating today, might receive an F rating by 2018. Such a result would have a significant impact on the landlord’s ability to rent the building, while also impacting its value.

There are two immediate actions that can be taken to mitigate this risk however…

  • ensure that you have an up-to-date and accurate EPC that reflects any improvements, and is not based on old assumptions
  • focus on energy-efficient lighting, which has a positive impact on an EPC rating as well as a strong ROI

Improving the efficiency of a commercial property has other benefits including making them more attractive to potential tenants and improved investment value.

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Ofgem has continued its crackdown on electricity cost increases, cutting by £2.1 billion the amount five of the UK’s six regional electricity distribution companies can invest in network upgrades over the next eight years. Ofgem refused to authorise £1.4 billion spending, while the companies made £700 million of cuts themselves.

Distribution costs account for around 8% of the average dual fuel bill. The reduction in future investment should see the average consumer bill fall by £12 a year between 2015-2023.

Western Power Distribution plans were approved last November, after they pledged a cut of 11.6% in the distribution element of electricity costs over the period 2015-23.

According to Ofgem, electricity distribution costs have fallen by 39% over the last 25 years, although these falls have been more than outweighed by increases in other non-commodity costs – to the extent that the cost of electricity is set to make-up only 50% of electricity invoices by next year.