New research shows community buildings falling behind in energy efficiency race

New research by social finance lender Social Investment Business (SIB), shows that improvements to the energy efficiency of community buildings is lagging behind other non-domestic buildings. This is leaving the not-for-profit sector burdened with properties with higher energy bills and higher emissions that are at greater risk of regulatory non-compliance.

The research was conducted using data from the Non-Domestic EPC register to track changes, including in EPC ratings for the same building over time to measure improvements in energy efficiency.

Findings from the research highlighted:

1. Community buildings are falling behind

Since 2008, other non-domestic properties have improved their energy efficiency 60% more than community buildings. This gap has widened in recent years, with other non-domestic buildings improving at more than double the rate of community buildings.

The research also showed that larger community buildings and those with the highest energy consumption struggled to improve.

2. Simple energy efficiency upgrades are possible

SIB’s research found that many community buildings have been missing out on making relatively simple improvements such as draughtproofing, installing efficient lighting or adding heating controls. These measures could help to improve EPC ratings for community buildings, and contribute to compliance if Government tightens minimum energy efficiency standards regulations in the future.

3. Investment and support are needed

The evidence indicates that community buildings are falling behind the rapid pace of change in energy efficiency that is currently needed to meet the challenge of Net Zero, and they are showing signs of falling behind further. Intervention is needed through investment and support to prevent the gap continuing to widen. Without this investment, we will not be able to future-proof our community buildings and meet the challenge of Net Zero.

This paper is an expansion of SIB’s existing energy paper Energy Efficiency of Buildings across England: A descriptive Analysis, which investigated Energy Performance Certificates (EPCs) in the Community Sector over the past 16 years.

The research by SIB’s data team shows community buildings in the UK need to improve their energy efficiency at pace to meet the challenges of climate change and regulatory demands such as Minimum Energy Efficiency Standards (MEES). However, the sector is being outpaced by the UK’s other non-domestic buildings, which are becoming more efficient at a faster rate.  With regulatory demands likely to increase as the UK’s target to reach Net Zero by 2050 approaches, buildings that do not improve risk becoming stranded assets, lost to their communities.

“Together, these two research reports clearly show the scale of the challenge facing communities across the UK. Community buildings lie at the heart of neighbourhoods, providing essential services, connections and support. Yet, we risk these buildings becoming ‘stranded assets’ without urgent investment.

“Social Investment Business is urging policymakers and investors to work with us to proactively support community organisations in maintaining and improving these buildings for local people now and into the future.”

Nick Temple, Chief Executive of Social Investment Business.

Notes:

Energy Performance Certificates (EPC)

Energy Performance Certificate (EPC) ratings are a measure of how efficiently a building uses energy. As the UK works towards meeting the law set in 2019 to reach Net Zero by 2050, there are likely to be incremental rule changes for EPC ratings.

A ‘C’ rating is commonly suggested as the minimum required for sale or let in proposed legislation of domestic properties by 2035, whilst a minimum of ‘B’ has been suggested for renting non-domestic properties by 2030.

Minimum Energy Efficiency Standards (MEES)

The minimum energy efficiency standard (MEES) was introduced in March 2015 by the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.

In 2018, changes to the law made it illegal to sign a new or renewed lease for a non-domestic property that does not meet the MEES regulations, meaning for any property with an Energy Performance Certificate (EPC) rating of F or G.

In 2023, the Government stalled its policy of raising the minimum standard of an EPC from an E to a C. However, it is likely that this could rise in the future to support the transition to Net Zero.