Industry Insights – May 2021: Improving Energy Performance, Professional Competency and Social Value

By Jen Heil | May 28, 2021

After one of the wettest Mays on record, hopefully this month’s industry insight can bring a little sunshine to your Friday afternoon. This time we’ll be diving into a couple of key consultations which are set to have a big impact on how the energy performance of leased buildings is assessed and their minimum performance targets. We’ll also be looking at the energy renovation specifications, PAS 2030:2019 and PAS 2035:2019, as the deadline for TrustMark installers to get certified fast approaches. Finally, we give a brief overview of the 2021 update to the National TOMs and some of the ways you can make use of the new tools available.  

Spotlight: Consultations on MEES and in-use performance metric for commercial buildings 

At the back end of last year, the Department for Business Energy and Industrial Strategy (BEIS) published its Energy white paper mapping out, in broad strokes, its vision for reaching net zero greenhouse gas emissions by the middle of the century. The document itself is well worth a read but one of the key targets to come out of it was confirmation that all rented non-domestic buildings (barring some exceptions) would need to reach an Energy Performance Certificate (EPC) of B by 2030. To achieve this, a consultation has been opened looking at improvements to the existing Minimum Energy Efficiency Standards (MEES).  

MEES were first introduced into law back in April 2015 and have been slowly rolling out since. Put simply, they set minimum EPC requirements that rented properties (both domestic and non-domestic) must meet for them to be legally let. Since 2018, properties which need an EPC have been required to achieve a level of at least an E before they can be let to new tenants or their existing tenancy renewed and, from 1st April, this requirement will apply to all non-domestic rental properties.  

The MEES legislation offers some exemptions, for example, if the measures required to achieve an E would not deliver payback within 7 years. Even in these cases, however, the landlords are required to apply for an exemption to prove they have considered improvements.    

The headline targets within the new consultation are that all privately rented non-domestic buildings (aside from those with registered exemptions) should achieve a minimum EPC of C by 2027, rising to an EPC of B by the close of the decade. In theory, this could represent a sea change in the energy performance of the non-domestic sector, however, much will depend on implementation and enforcement. 

The current scheme promises hefty punishments, including fines reaching into the thousands, but there has been a good deal of criticism over how it has been enforced to date. A pilot scheme looking at enforcements showed it was often resource intensive for local authorities to identify non-compliant buildings and difficult to enforce at the point of leasing. 

To address this, the new consultation not only sets out the roadmap for tightening the minimum EPC requirements for these buildings, but also sets some clear recommendations on how these can be better enforced.  

Some of the key changes proposed include: 

  • the creation of a central compliance database where a building’s current status (compliance, exemption or non-compliance) can be logged, allowing simpler identification; 
  • requirement for buildings to continually hold an in-date EPC (the certificates are valid for 10 years) and to carry out post-improvement recertification; and 
  • a requirement for letting agents to only advertise and let properties with a valid EPC. 

Even with these changes, a further key criticism of the current scheme remains that it doesn’t actually require the energy performance of buildings to be measured. Similar criticisms were levelled at the proposed changes to Part L of the Building Regulations by a number of key industry bodies. 

To attempt to address this shortfall, a second consultation is running concurrently with the one for MEES. This consultation would mean commercial and industrial offices in England and Wales with a floor space of over 1000 m2 would be required to disclose annual energy ratings for their properties. 

The policy is being modelled after a scheme currently operating in Australia. The ratings would be generated through sector specific requirements which consider aspects such as occupancy, location and operating hours. This would allow buildings to be benchmarked both against their peers, and in relation to the net-zero trajectory. 

One of the key questions posed by the consultation is how these ratings should be used. It is suggested, in some cases, the performance-rating could be used in place of the EPC to prove compliance with MEES, providing they have agreed clear cost-effective measures to meet compliance by 2030. Alternatively, it is suggested they could be used alongside EPCs to provide further information about the overall compliance of buildings.  

Both consultations are open for responses until 9th of June so you need to move quickly if you want to get the feedback in.

PAS 2030 and PAS 2035 deadline looms 

In addition to the consultation deadlines, June is also the last chance for many TrustMark certified installers to get certified to PAS 2030:2019. Together with PAS 2035:2019, this public specification creates a framework for how energy retrofit work on homes should be carried out.   

Up until now, TrustMark certified installers have simply needed to be certified under PAS 2030:2017. This document deals almost exclusively with best practice when installing energy efficiency measures (EEMs), with installers required to gain certification under the scheme and undertake annual audits. The problem with this approach is it can mean improvements are mis-prioritised or that EEMs are installed without proper consideration for whether they’re appropriate for a building. 

The revised specifications look to address this by adopting a whole house approach, where the building is thoroughly assessed and a clear improvement plan drawn up listing the order in which improvements should be made. PAS 2035 lays out the multi-stage process for this, including clear roles and responsibilities whilst PAS 2030 continues to deal with best practice for installers actually fitting the energy efficiency measures (EEMs). 

With the exception of the final remaining projects being carried out under the Green Homes Grant or Local Authority Delivery Phase 1 scheme (which can continue to operate under PAS 2030:2017 until the end of October) all TrustMark registered installers must be certified to PAS 2030:2019 and carry out work under the process in PAS 2035 from the end of the decade. 

Providing they are properly enforced, the framework laid out between PAS 2030:2019 and PAS 2035:2019 has the potential to address many of the shortfalls of energy retrofits identified in the Each Home Counts report. The process sets clear lines of accountability, including post completion monitoring, and requires all documentation to be stored in a central data warehouse which can be accessed by both the project teams and the customer, creating a clear record of changes. 

With TrustMark registration expected to remain a mandatory requirement for all government funded energy retrofit schemes going forward, it is hoped these specifications can start to drive the improvements needed to ensure energy retrofits deliver on their promise. 

Increasing social value – 2021 National TOMs Update 

Legislation and certification are not the only things changing – the National TOMs framework has now undergone the latest of its annual updates, providing organisations with the most comprehensive and accessible tools to date for measuring social value.  

Established by the Social Value Portal – a cloud based social value service – the National TOMs was first developed 4 years ago as an open-source tool to provide a single measurement and reporting standard for social value. The 2021 update is the fourth iteration of the framework, annual updates of which are designed to ensure the tool evolves with the maturity of its users, aiding them on the journey to embedding social value principles. The annual updates also aim to ensure that its common language and measures align with recent developments, such as the UK government’s new Social Value Model, keep financial proxies current and incorporate the latest research. 

The 2020 update was released shortly before the COVID-19 pandemic hit the UK and Social Value Portal released additional COVID-19 plugins later in the year to support a 3-stage response to the crises:  

  • React, which aimed to support organisations in their immediate responses;  
  • Recover, which looks to support mobilisation of resources so that communities can gradually rebuild an improved normal; and  
  • Renew, which helps organisations leverage what has been learned so that a focus on social value can be sustainably embedded. 

Research conducted through the stakeholder engagement and feedback survey found that whilst the pandemic has affected the pace of embedding the TOMs, there is an increased recognition that now is the time to invest in building capacity for social value, in order to create cohesive and resilient communities. There was also a clear trend that climate, environment and inequality are all issues that are consistently at the centre of organisations’ ‘recover & renew’ strategies. 

The objectives of the 2021 update were to: 

  • Consolidate the knowledge and capacity of organisations to get started with using the TOMs through providing additional guidance and particular support for MSMEs and beginner users; 
  • Reflect on the impact of COVID; and 
  • Focus on inequality and environmental emergency. 

Within the updated TOMs, the Themes, Outcomes and Measures themselves have not changed. This is to ensure continuous take up of TOMs 2.0 as released in the 2020 update. Whilst the framework essentially remains the same, the language and guidance has been refreshed and updated to reflect legislative changes and the central government social value model. The guidance has also been reviewed to account for the impact of the pandemic on what constitutes social value – namely to consider elements such as staff wellbeing, training, and other interventions. In addition, free access is now available to a new online portal to use the TOMs, including a social value calculator. Whilst there are limitations on usage compared to what is available with a full subscription, this is arguably the most exciting element of the update as it makes the framework much more accessible to MSMEs that are looking to measure and improve their social value. The new online portal and calculator are supported with two updated PDF resources: the TOMs Framework document and a TOMs Handbook, which is specifically geared towards smaller organisations and beginner users.  

As we emerge from the pandemic with a focus to build back better, greener and more equal, being able to define targets and measure progress for delivering social value is more important than ever. It can be both a real driver for change and a useful means of business development as clients and other stakeholders increasingly expect to see this value delivered throughout the supply chain. 

 

You can try the TOMs for free or pursue full membership which includes a dedicated social value consultant to support your organisation on this journey. For more information, visit the Social Value Portal. You can also watch the 2021 National TOMs Update webinar here. 

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