Why should your commercial property be energy efficient?

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Why should your commercial property be energy efficient?
Why should your commercial property be energy efficient?

The commercial property industry is booming; investing in this industry is one of the smartest moves a person can make. In relation; making your property energy efficient can be the second smartest move you make. Non-residential buildings are responsible for approximately 10 per cent of Australia's greenhouse gas emissions. Over the years 2012 to 2020 these emissions were projected to increase by over 25 per cent. When this was predicted the government took control and implemented numerous energy efficiency programs.  Not only is this beneficial for the environment but it also has business related benefits such as; a cost-effective way to manage rising energy prices, increase productivity levels and reduce operating costs. It can also increase the value of your property and attract a higher rental return.

But what is Energy Efficiency ? The basics of energy efficiency can be seen as using less energy to achieve the same output or performance. For example; replacing a 100W incandescent light bulb with a 10W LED light bulb will provide the same measure of light output but it will use 90% less energy.
Now that you know the 'what', you need to know the 'how'. How do you make your property more energy efficient? Below are a few suggestions:

  • Lighting

As already mentioned above, changing the light bulbs used can decrease the energy usage in your property. Use energy efficient bulbs and daylight controllers, these will switch on only when natural light is insufficient. Infrared sensors will switch off lights in spaces that are infrequently used, such as toilets, corridors and stairwells. Thus controlling the amount of energy used.

  • Glazing

Glazing is beneficial for temperature control in any office. Choosing the right 'performance glazing' (energy efficient glass) lets you control how much heat enters or escapes from a building. This can then reduce the use of artificial heating or cooling which then results in lower energy use.

  • Upgrading electronic devices

Significant decreases in energy output can be achieved through upgrading and retrofitting computers and other electronic equipment as these can contribute up to 30% of an office’s energy use. Ensure new electronics purchases, such as televisions, electronic menus, kitchen appliances, laptops and computer systems, are the best performers in their category in relation to energy usage.

  • Solar  Power


Solar power is where solar panels are installed onto your properties roof; there are many companies which offer this service. They do require a minimum 200m2 of free roof space in a good condition; unimpeded and unshaded. But this is common in commercial property buildings. The panels are easily installed usually by the company you are purchasing them from and the level of care after installation is very minimal to non-existent. What needs to be considered when looking at solar power energy is whether to have net metering or gross metering.

Net metering is a metering arrangement where only excess solar electricity is sent to the electricity grid network. It first powers your property and then the excess is exported. It can reduce your bill in two ways:

  1. Reduce your use of electricity from the network and

  2. You may also receive a small payment for the amount exported. 

Gross metering on the other hand is where all solar electricity generated is exported to the network. You have 2 separate electricity metre, 1 which records your personal power usage and 1 which records the power sent to the grid. Buildings or households using gross metering are offered a premium rate for the solar production.

  • Insulation

Insulation acts as a barrier to heat loss and heat gain. It is one of the most practical and cost effective ways to make a building more energy efficient, keeping it cooler in summer and warmer in winter and saving up to 40 per cent in heating and cooling bills. Now that your property is energy efficient, you can take the next step and get a National Australian Built Environment Rating System (NABERS) rating. This System takes existing buildings and implements the NABERS performance-based environmental impact rating system.  NABERS provide property owners with a rating of a buildings energy efficiency, the better the rating the better the energy efficiency of the property.  More information can be found via this link; http://ee.ret.gov.au/national-australian-built-environment-rating-system

By having a high NABERS rating it increases the value of your property within the market as it attracts higher valuations and enjoys lower operating costs. NABERS rated properties represent sustainability, this is attractive with in the commercial property market.

Benefits of being Green

Improving your energy efficiency makes good business sense. The benefits toward the business are great. One of the benefits is that the building will cost less to run and maintain. An example of this was achieved by the State Library of Victoria where they implemented an indoor climate control system. Their facility is a two-hectare, 150 year old building which now produces energy savings of 30 to 60 per cent across a range of applications. This resulted in a total annual energy usage cut of 1,800 Mega Watt Hours, this saved them $160,000. The investment paid for itself in energy savings within 13 months.  Below are further benefits and/or reduced costs for energy efficient properties;

  • Improved asset value


 If you undergo the NABERS ranking system they will give you a star rating. This can then be advertised alongside the property, allowing  prospective buyers/renters to see the rating, thus increasing the value of the property and improve interest. This is because a high  NABERS ranking shows low running costs and sustainability which is very appealing to prospective buyers.


  • Secure tenants quickly

As said above, having a NABERS ranked property that is energy efficient will put you on top when buyers are weighing up their options; therefore you secure tenants quicker due to the appealing nature of the building. There will also be a lower tenant turnover for those properties renting.

  • Government incentives (solar power)

The government has allowed properties who install a solar power system a 30% tax credit on the cost of the system. There is no cap on this amount so whether you install a $100,000 system or a $1,000,000 system you can still claim 30% as credit. In addition, each state and utility has its own rebate system to reduce the overall cost of installing a solar power system. In many instances, the amount of the rebate increases as the size of the system increases. Similar rebates and credits are available for other energy efficient improvements as well. Further information on government related incentives and benefits on energy efficiency can be found via this link; http://seedengr.com/documents/BenefitsofCommercialSolarPower.pdf.

The benefits definitely outweigh the upfront investment when make commercial properties ‘green’. So become a friend to the environment and embrace the energy efficiency trend which commercial properties are taking. Good Luck.

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