Politics Home Article | We need a clean heating plan for commercial buildings, not just homes

The Warm Homes Plan and the Future Homes and Buildings Standards set out clear objectives for decarbonising homes. Likewise, the Energy Security Bill, announced last month in the King’s Speech, will help to bring down energy costs in the long term.

But there are approximately two million non-domestic buildings in the UK. We now need a plan to retrofit these properties, which have so far been overlooked. Any plan should include a time-bound target for when existing fossil fuel systems must be replaced with a low-carbon system. While new non-domestic buildings will need to electrify under the Future Buildings Standards, ensuring existing buildings adopt low-carbon technologies is critical to the UK’s decarbonisation efforts.

The environmental benefits are clear, but a plan would also bring three key economic benefits:

• helping businesses to navigate volatile fossil fuel prices and plan for the transition
• addressing regional disparities
• strengthening the UK’s clean heat industry

Here’s how a plan for the decarbonisation of commercial buildings can drive energy security and economic growth:

1. Protecting business owners from fossil fuel volatility

The conflict in Iran and the ensuing energy shock have led to volatile gas prices, putting enormous pressure on businesses across the UK. Already stretched, many businesses are having to make difficult decisions on investment and jobs.

Currently, take-up of technologies such as heat pumps, solar panels and batteries among businesses lags behind the domestic sector. We need to see incentives for commercial building retrofit to help address this gap and provide businesses and landlords with the direction to invest.

By adopting these technologies, businesses will benefit from more efficient, modern heating. This will also shield businesses against price shocks in the future.

While there will be upfront costs for business and the government, the investment will prove extremely valuable in the event of any further energy price shocks and create a more secure economy.

2. Addressing regional disparities in the energy efficiency of commercial buildings

Large businesses, which are often based in major cities, are more likely to require high sustainability standards for their buildings, particularly as tenants increasingly seek buildings that meet higher sustainability standards as part of their own environmental commitments. This creates impetus for landlords to ensure their buildings meet these standards. As a result, we have seen successful retrofitting in business hubs – such as the Exchange Quay office campus in Manchester.

However, outside of major cities and existing business hubs, the demand for this technology is lower. This creates a vicious cycle, where businesses increasingly look to base themselves in cities with more modernised commercial buildings, and landlords focus their investments on these same places.

Regional disparities will continue to be reinforced unless the government acts. In addition to investment in retrofit, we also need clarity on timelines and a commitment to increasing minimum energy efficiency standards. Raising requirements for non-domestic buildings will raise the floor for commercial buildings and help improve supply across the UK.

3. Bolstering the UK’s clean heating sector

A stronger commitment to clean heating for commercial buildings will strengthen this growing sector of the green economy.

A key barrier to expanding the rollout of clean heating is having the right workforce to deliver it. However, 24 per cent of UK contractors say that there is not enough demand for heat pumps to justify training for installation.

A plan for the decarbonisation of commercial buildings would help create this demand and give workers the confidence to invest in skills.

More demand for clean technology also means more opportunity for manufacturers, increasing UK production, creating jobs and opening up new export opportunities – supporting the government’s ambitions for economic and industrial growth.

The logical next step for clean heating

The first few months of this year have seen significant progress on the government’s plans for decarbonising homes and promoting the adoption of clean heating.

The government has made it clear that the UK cannot rely on fossil fuels forever and has made vital steps to address this in the King’s Speech.

The next logical step is investment in clean heating for commercial buildings, which will give stability to business owners, raise standards across the UK, and help grow the green economy.

Now is the time to push forward and put forward a plan that gives equal backing, both in regulation and incentives, for non-domestic buildings.