From 1 April 2001, most businesses and public bodies paid a new tax on the electricity, gas and other fuels they used. The Climate Change Levy is charged on energy supplied for business use and appears on the supplier’s bill. Households are not affected, but owners and occupiers of offices, shops, warehouses and other commercial premises are.
Why the building matters
The levy is charged per unit of energy, so the less energy a building needs to stay warm, lit and usable, the less levy the occupier pays. In many older commercial buildings a large share of the energy bill goes on heat that escapes through the fabric or is wasted by plant that is past its best. Typical problems include:
- roofs with little or no insulation;
- single glazed windows that rattle and let in draughts;
- boilers and controls that are old, oversized or poorly set up;
- heating that runs to the whole building when only part of it is in use;
- lighting left on in areas that are rarely occupied.
Who pays, landlord or tenant?
In a let building the occupier usually pays the energy bills, while the landlord decides on major repairs and replacements. That split can mean that nobody has a clear reason to invest. Where a service charge covers central plant, the cost of the levy may be passed through to tenants. It is worth landlords and tenants talking about it, because improvements made during routine repair and replacement often cost little extra.
Start with a survey
The sensible first step is to understand the building. A condition survey can record the state of the roof, walls, windows and services, identify where heat is being lost, and point to the repairs that will save energy as well as keep the building sound. The most effective time to improve a building is when work is due anyway, for example when a roof covering is being renewed or a boiler is coming to the end of its life.
Build it into the maintenance plan
A planned maintenance programme lets owners line up energy improvements with the repairs they would have to do in any case, and spread the cost over several years. That turns a new tax into a reason to look after the building better.
See our Building Surveys and Defect Diagnosis and Planned Preventative Maintenance services, and a later communal heating feasibility study for a mansion block.