SmartSPIN, which is trialling solutions which could potentially remove the split-incentive problem which is resulting in a significant level of untapped energy saving in the commercial rental sector.
The split-incentive problem arises because the building owner is typically responsible for the costs associated with retrofitting the building, while the building occupier is the one who benefits from the majority of the improvements such as lower energy bills, CO2 emissions and comfort. So while the owner is looking to minimise capital costs and maximise rental revenues, they have little incentive to invest up-front in measures that would improve energy efficiency over time as they won’t directly benefit themselves.
SmartSPIN, funded by the EU’s Horizon 2020 programme and lead by IERC, is running a pilot programme across Spain, Greece and Ireland to test a unique Energy Efficiency-as-a-Service model that the team have developed to address these challenges. This innovative model is looking to address barriers previously experienced by commercial building owners are removed as they work with an efficiency service provider who will fund all the upfront costs related to equipment, construction, operation and maintenance for the energy saving initiatives. Any resulting cost savings are shared between the efficiency service provider and the building owner while the building occupier enjoys improved buildings performance, reduced CO2 emissions from their business and improved comfort and working environment. IERC is leading and coordinating this project.