Renewable energy seems to be the buzzword of the moment. We have already seen the likes of Google, Amazon, Apple, Microsoft and General Motors in the USA sign a number of impressively large renewable-energy power purchase agreements.In fact, Google has already purchased wind power equivalent to 1.7% of the total capacity of the US!
Closer to home, Marks & Spencer has set itself the ambitious target of covering the entire energy needs of all of its buildings in the UK and Ireland from 100% renewable sources by 2020. The retail giant has already been generating solar power for on-site use at their East Midlands distribution centre.
Leading the solar charge locally is of course Kingspan Energy which has just recently completed the largest rooftop PV array in Northern Ireland at the group’s manufacturing plant in Portadown. As a result, it is expected the panels will generate 30% of the site’s daytime annual energy demand.
Whilst this is generally a trend amongst the large corporates, its benefits are clear to see from reducing carbon footprint to improving sustainability rating. Just like the UK and Ireland have already taken their lead from America on the matter, I believe we will see smaller companies taking their lead from these big corporates in the not so distant future.
What does this have to do with commercial property?
Investing in renewable energy sources drives costs down significantly and ticks the increasingly important Corporate Social Responsibility (CSR) box for tenants.
A win-win situation for both tenants - who benefit from lower energy bills - and landlords who, although yet to be fully appreciated, may experience a higher demand for their buildings. Securing continuity of occupancy and income is now a "front and centre" issue for landlords.
Although not yet fully demonstrated, it could be argued that some tenants may be prepared to pay slightly more in rent in order to secure premises with green credentials.
With Northern Ireland subject to some of the highest energy costs in Europe, renewable energy sources will be increasingly appealing to not only manufacturing companies but also those situated in larger buildings or with a significant headcount.
It is reported in some quarters that grid capacity remains an issue in Northern Ireland with levels of fuel poverty being experienced as the infrastructure struggles to service existing businesses. With Foreign Direct Investment (FDI) activity increasing, this is a challenge which needs addressed and rectified sooner rather than later. .
In order to reduce the pressure on our existing infrastructure, companies with high energy usage, particularly manufacturers in large facilities, should consider investing in renewable energy generation. These ‘green’ features should also be considered by developers as being standard in all future construction and refurbishment projects, to ensure they remain desirable to tenants.
I would be hopeful that actions will be taken sooner rather than later.