Commercial landlords and small business tenants in the UK are facing a climate crunch with looming changes to regulations meaning 85% of rental properties will need to improve energy efficiency by 2030 – or be banned from leasing out buildings.

Yet commercial landlords are often reticent to invest in energy saving measures because the financial benefit – lower energy bills – goes to the tenant.

Energy Systems Catapult worked with energy service companies – Q Energy and arbnco – on the Boosting Access for SMEs to Energy Efficiency (BASEE) programme funded by the Department for Business, Energy and Industrial Strategy.

A new report detailing learnings from the BASEE programme has identified compelling opportunities for innovation – both technically and commercially – in providing smart energy services to SMEs.

Energy Systems Catapult business model consultant, James Bagshaw, said: “Selling energy efficiency to small businesses is notoriously hard – with SMEs often citing a lack of time, money or confidence in the solutions available. While larger businesses are both incentivised and well serviced to improve energy efficiency – often owning their own premises – there is a huge gap in the market to supply SMEs with smarter energy services that reduce the energy use and carbon emissions.

“The almost one and a half million small business premises in the UK account for 50% of commercial energy use, yet there is potential to reduce energy consumption
by up to 40%, which would be a huge contribution to the UK’s Net Zero goals. So the market for improving the energy efficiency of commercial property in the
UK is compelling and - with regulations set to tighten over this decade - there is undoubtedly a massive commercial opportunity that’s ripe for innovation.”