‘No win, no fee’ – Does this approach have a place in the energy consultancy industry?
I am one of the three co-founders of EVORA. Nearly six years ago, we set up the firm because we believed that energy and sustainability consultancy across the real estate industry was not being delivered effectively.
Not for want of interest; our industry was, and still is, affected by legislation, reputational and cost drivers, and the technology is not overly complicated – we are talking about heating, ventilation and air conditioning systems here – not complex manufacturing processes.
However, traditional environmental, sustainability and energy consultancies have struggled to gain a significant foothold. In my opinion, this is for the simple reason that those who work in real estate must understand and work with the complexities associated with managing buildings where landlords pay for energy that is consumed by others (namely, tenants and visitors).
[clickToTweet tweet=”How well does your #energy / #sustainability consultancy understand the #CRE sector?” quote=”How well does your energy or sustainability consultancy understand the complexities of the commercial real estate sector?”]
Admittedly, there is still a long way to go. However, the industry is making significant progress, and I am delighted that we are playing an active role.
It is therefore unsurprising that different approaches, ideas and solutions have been put forward. One of these is the ‘no win, no fee’ energy saving consultancy package. Typically, approaches involve an initial visit and review of performance data. Proposals are then submitted, which highlight that no-cost Building Management System adjustment measures can be implemented to generate energy, carbon and financial savings. The consultant’s remuneration is based on a percentage of cost savings.
On the face of it, a good idea. But be cautious…
There are several challenges that must be considered. From the outset, I would like to set out that I am not against the idea. It can work, and work very well – especially in single let owner occupier buildings or locations, like hotels, where the operator has control over most plant and where budgets and costs are not available to fund consultancy up front.
But, when it comes to commercial multi-tenanted office buildings and shopping centre environments, the complexities highlighted above must be recognised. Here are some thoughts:
- Although simple when compared to, say, the nuclear industry, the interaction of heating ventilation and air conditioning systems can cause challenges and must be thoroughly understood at building level.
- The impact of occupancy changes is notoriously difficult to model.
- An understanding of other plans for the building must be considered and factored into energy models.
- Initiatives involve adjusting BMS temperature and time set points. Changes may at first seem feasible, but leases must also be checked. Leases may specify when office space must be conditioned and must be applied.
In conclusion, if the service charge can cover the cost of an operational improvement programme (which must contain regular review stages), then this is the best way to go.
[clickToTweet tweet=”Be wary of ‘no win, no fee’ #energy consultancy! Understanding buildings is paramount…” quote=”Be wary of ‘no win, no fee’ energy consultancy! Understanding the energy use of different buildings is paramount…”]