“We must include rented properties in our drive to upgrade 500,000 homes to a more energy efficient standard by 2030, making them warmer and cheaper to run for renters”, the Minister for Communications, Climate Action and Environment Richard Bruton, T.D. said today (6th of December 2019) announcing a consultation around options to encourage energy efficiency upgrades in rented properties.
The Built Environment accounts for nearly 13% of Ireland’s emissions. The Government’s Climate Action Plan commits to upgrade 500,000 homes to B2 or cost optimal energy efficiency standard by 2030.
Rented properties, especially older rented properties, are often less energy efficient than owner occupied properties because of the split incentive problem. A split incentive occurs because landlords, who would have to meet the cost of the improvements, do not reap the benefits of a warmer home and cheaper energy bills. Tenants, on the other hand, do not own the property and therefore have little incentive to invest – so neither party is motivated to upgrade the building.
As a result, tenants’ heating bills can often be higher than they could be. More energy is used, resulting in higher emissions. This is a problem encountered internationally.
Minister Bruton said,
“We must address this issue. It is estimated that around 21% of private rented accommodation have a BER rating of F or G. Today we are outlining a number of options to address the problem. Improved properties will be welcome for tenants and landlords alike because they will result in improved living conditions, better health outcomes and enhanced asset value. The environmental impact will be significant, with lower energy bills and lower emissions.”
A number of options are outlined in the consultation open from today including:
– Introduce regulations requiring all commercial buildings to attain a minimum building energy rating (BER) by a specified date in the future
– Encourage more use of ‘green’ leases to encourage co-operation between the landlord and tenant to achieve beneficial environmental outcomes
– Provide for a Right of commercial property tenant to initiate improvements
– An enhanced grant for landlords who upgrades their rented property and their own home at the same time; provided both properties are brought up to specified BER standards
– Link participation by a landlord in the HAP scheme for a defined period of time to a free energy efficiency upgrade
– Introduce a Cost Balancing Arrangement, whereby a landlord unable or unwilling to upgrade to minimum BER standard, compensates tenant for higher heating bills
All options will be put out to consultation from today. The consultation will remain open until 17th January 2020. Interested parties are welcome to submit and the consultation is now live here
Completion of a consultation on this matter is a key action under the Climate Action Plan, the Government’s plan to ensure we meet our 2030 climate commitments and put us on a trajectory to be net zero by 2050.