Energy efficiency and proving green credentials are high on the agenda for all businesses, and fashion retailers are no exception.
However, many retailers are still feeling the effects of the recession and may be wondering how they can do their bit for the environment and make their premises more energy efficient without incurring upfront costs. The prospect of reduced energy bills might be just the incentive.
What is the Green Deal
The Green Deal is a government funding scheme under which works aimed at improving energy efficiency can be installed at a property without the improver having to meet the up-front costs. Instead, the improvements are paid for under a Green Deal plan through energy bills over an agreed period of time. If the bill payer changes then the new bill payer will take over the payments, as the plan outlines that the party who is continuing to benefit from the improvements should be making the payments. The improvements that can be undertaken under the Green Deal are extensive and range from lighting systems, fittings and controls to more major, for example external wall insulation systems.
The Green Deal Assessment
The Green Deal is available to both property owners and tenants so if, as a tenant, you feel that your premises would benefit from energy efficiency measures, the first step is to get a Green Deal Assessment. This will recommend the improvements that could be made to make the premises more energy efficient.
A Green Deal provider will:
- Then determine the likely annual saving that will result from the recommended works,
- Set a period and level of repayment so that the cost of the energy consumed (which should be less than before the works were carried out) plus the repayments (the Green Deal charge) do not exceed the energy costs that the improver would have incurred had the works not been done.
As most retailers occupy premises under leases, they are accustomed to obtaining their landlord’s consent for alterations. However, the landlord’s consent is also required before a tenant can enter into a Green Deal plan. Some landlords may be reluctant to give this, or attach conditions to it, as in the event that the premises become vacant, the landlord would have to pay the Green Deal charge.
Although the Green Deal is available for both residential and commercial properties, the Green Deal Finance Company is not yet lending on commercial Green Deal plans and has indicated that they will wait for uptake of the residential Green Deal to increase before doing so. Nevertheless, retail tenants may want to get a Green Deal Assessment in the meantime to see if and how they could improve the energy efficiency of their premises and the impact this will have on energy bills.