Navigating MEES: How Solar Panels Can Future-Proof Your Warehouse

In recent years, the UK government has taken significant steps to achieve its net zero ambitions by introducing legislation to reduce the country’s carbon emissions. One such measure has been the introduction of Minimum Energy Efficiency Standards (MEES). This legislation, introduced in 2018, mandates that all commercial properties in England and Wales must meet a minimum Energy Performance Certificate (EPC) rating of 'E'.

MEES have had a dramatic impact on the country’s commercial real estate landscape, and have had a particular bearing on warehouse owners. In this blog we’ll examine the effects of MEES on warehouse landlords and explore how investing in solar energy will not only improve their EPC ratings, but deliver considerable additional commercial benefits.

 

Understanding MEES
The MEES regulations mandate that any commercial property in England and Wales that does not meet a minimum Energy Performance Certificate (EPC) rating of 'E', cannot be legally leased to new tenants or have leases renewed. The goal of MEES is clear: to improve the energy efficiency of buildings, reduce carbon emissions, and drive the UK towards a more sustainable future.

The new labour government’s broader energy and environmental policies suggest that they will continue to push for stricter energy efficiency standards, with the indication that a future target of achieving a B rating may be introduced by 2030. 

 

The challenge for warehouse landlords
Warehouses, by their very nature, often struggle with energy efficiency due to their large, open spaces and the significant energy required for heating, cooling and lighting. Many warehouses built before modern energy standards were introduced can fall short of the required 'E' rating, making them non-compliant with MEES and potentially unlettable.

Non-compliance with MEES will not only result in reduced rental income and the risk of the warehouse becoming unlettable, landlords also run the risk of hefty financial penalties and inclusion on a public register of non-compliance. 
The solution is getting plugged into smart energy! Let’s take a look at how solar energy can solve this challenge. 

 

Embracing solar energy: A win-win solution

Investing in solar energy offers a multitude of benefits for warehouse landlords aiming to meet MEES requirements and enhance their properties' value and appeal. Here’s how:

Improved energy efficiency: Solar panels can significantly reduce a warehouse’s dependency on non-renewable energy sources. By generating clean, renewable energy on-site, warehouses can improve their EPC ratings, ensuring compliance with MEES.

 

• Cost savings: Solar energy can dramatically lower electricity bills. For large warehouse operations that consume substantial energy, the savings on utility costs can be substantial, leading to improved profit margins.
• Increased property value: Properties equipped with solar panels are more attractive to environmentally conscious tenants and buyers. A warehouse that meets or exceeds MEES requirements is not only legally compliant, but also positioned as a forward-thinking, sustainable investment.
• Corporate responsibility and brand image: Adopting solar energy enhances a landlord's corporate social responsibility (CSR) profile. Demonstrating a commitment to sustainability can improve the brand image and attract high-quality tenants who prioritise eco-friendly practices.
• Future-proofing investments: As energy regulations become increasingly stringent, early adoption of solar technology can future-proof warehouses against further regulatory changes. Staying ahead of compliance requirements ensures long-term operational stability and competitiveness in the market.

 

Government incentives and support
To sweeten the deal, the UK government offers various incentives to support the adoption of solar energy. These include the Smart Export Guarantee (SEG), which allows property owners to sell excess solar energy back to the grid, and capital allowances on energy-efficient investments. 
Other funding schemes which could be used to reduce the cost of solar installation, if they have not already been applied for other purposes and subject to approval include:

 

• Enhanced Capital Allowances (ECAs): This scheme allows businesses to claim the full cost of qualifying solar panel installations against their taxable profits in the first year, providing a significant financial benefit by accelerating the depreciation of the solar investment.
• Smart Export Guarantee (SEG): The SEG scheme provides payments to businesses for the excess electricity they generate and export back to the grid. Energy suppliers set the rates, allowing businesses to earn additional income from their unused solar energy.
• Business Rates Relief: Businesses that install commercial solar panels may be eligible for business rates relief, which can reduce the amount they have to pay on the property where the solar panels are installed. This relief can be as much as 100% for up to five years.
• Tax Relief and Grants: Various grants and tax relief options are available to support the initial installation costs of solar panels. These can significantly reduce the upfront investment needed and improve the return on investment over time.

By leveraging these incentives, warehouse landlords can offset initial installation costs and achieve a quicker return on investment.

 

Conclusion: Solar energy is a strategic investment.
The introduction of MEES has undoubtedly raised the bar for energy efficiency in commercial properties, posing challenges for many warehouse landlords. However, this regulatory shift also opens the door to innovative solutions like solar energy. By investing in solar panels, landlords can not only meet MEES requirements, but also enjoy significant financial and environmental benefits.

 

Of course, embracing solar energy is not just about compliance; it's about positioning warehouses for a sustainable, profitable future. In the evolving landscape of commercial real estate, solar energy stands out as a strategic investment that offers a win-win solution for both landlords and the environment. It’s time to harness the power of the sun and turn the MEES challenge into a golden opportunity.

 

Talk to us today about your solar power requirements. We can help you explore potential funding opportunities and get you plugged into a more sustainable and profitable future! 

 

 

Worried that your warehouse roof has limited load capacity? 
Don’t fret! New lightweight panels have recently been introduced, designed to solve that problem and we’ve just partnered with a manufacturer specialising in lightweight solar technology! Discover more about Lightweight Solar Panels for Roofs with Limited Load Capacity.

 

Suggested further reading:
Why SolarEdge is the Smart Choice for Warehouse Solar Installations

 

Empowering Sustainability: Lightweight Solar Panels for Roofs with Limited Load Capacity