Commercial building retrofit scheme could trigger over €200m in sustainable energy spend

Dr Pádraig Lyons, head of group, and Ruchi Agrawal, integrated energy system researcher, at the International Energy Research Centre, Tyndall National Institute. Picture: Brian Lougheed

A new pilot scheme is encouraging commercial building owners to retrofit properties in a project which could trigger hundreds of millions of euro of investment in sustainable energy. 

The International Energy Research Centre (IERC), based at Tyndall National Institute in Cork, is leading an initiative to trial solutions, which could remove the split-incentive problem, which it says is resulting in a significant level of untapped energy saving in the commercial rental sector.

The pilot aims to encourage commercial building owners to retrofit their property with no upfront costs.

The model introduces a third party, who takes on the costs and shares the energy savings with the building owner with an opportunity for energy saving.

Dr Pádraig Lyons, head of group at the IERC, said it forecasted the project could trigger investment in sustainable energy of up to €219m.

The split-incentive issue arises due to the building owner typically being the one responsible for the costs associated with retrofitting the building, while the tenant is the one who benefits from the majority of the improvements, such as lower energy bills and a reduction in CO2 emissions.

Little incentive

This often means the building owner has little incentive to invest up-front in measures that would improve energy efficiency over time as they do not directly benefit from them.

SmartSPIN, a project funded by the EU’s Horizon 2020 programme, is running a pilot programme across Spain, Greece and Ireland to test a unique Energy-Efficiency-as-a-Service model to address these challenges.

The model is looking to remove barriers experienced by commercial building owners, as all upfront costs related to the energy-saving initiatives, such as equipment, construction, maintenance will be covered by an efficiency service provider.

Any resulting cost savings will be shared between the service provider and the building owner.

Dr Lyons said many of the 109,000 commercial buildings in Ireland are in need of retrofitting.

“Even minor updates could lead to significant energy savings,” he said.

“The large-scale adoption of our SmartSPIN concept in Ireland could result in energy savings of 1.8 TWh per year and CO2 reductions of over 5,000 kilotonnes per year in this sector.

“Furthermore, we forecast that the project could trigger investment in sustainable energy of up to €219m within five years following the end of the project.” 

Commercial building owners who would like to join the pilot programme to benefit from energy savings with no up-front retrofitting costs can contact the SmartSPIN Team at [e-mail].