5 minutes with … RealService caught up with Amber director Tim Stephen, to ask about landlords, solar panels and why students should pay for their utilities
Tim, we know you best as the guy who cycles to MIPIM, in the south of France, rather than jump on a plane. So, tell us a bit more about yourself and what you do
I am a director at Amber, a Net Zero consultancy, where I focus on the Build to Rent and Purpose Built Student Accommodation (PBSA) markets.
Everything we do at Amber is framed around Net Zero, and we are proud to support so many properties throughout the UK with our Net Zero energy management and billing solutions.
In terms of our resident billing solution, we operate on behalf of landlords, with residents foremost in our minds.
Customer experience in utilities has been a challenge for everyone historically, so we designed our solution to make utilities more customer friendly.
We put all utilities in one bill so it’s easy for residents to understand. It’s also great for landlords, especially in Build to Rent developments, because while every resident is billed for their individual usage, it gives the landlord greater control and much more flexibility in the “greenness” of their energy supply.
What’s your focus at the moment?
Net Zero and our new ‘Fair Use’ model for student accommodation.
It’s been common for students to agree tenancies on rooms or flats with all utilities included, which can be unfair. We believe everyone should pay for the utilities they use, and we don’t want low consumers to subsidise higher energy users.
It’s a big step when students leave university accommodation for the big wide world and find they must pay for utilities. That’s why we want to inspire positive behaviour change, equip them with the tools and understanding to bring about more positive outcomes for themselves and our planet. We want to revolutionise the current approach by providing a solution that is fair and simple for all.
In our ‘Fair Use’ rationale, if you go over your consumption allowance, you are likely to be charged by your landlord for doing so.
An Ofgem survey found that students who had to pay for their utilities used 15 to 30% less power – which is much better for the planet, making the supply fairer and greener.
Right now, it’s a net rent world: gross rent minus costs. The biggest unknown out there is the cost of utilities. Fixing that line in the operating budget means less risk for everyone, so it’s a high priority from an investment point of view.
What are the barriers which come between real estate and achieving Net Zero?
In my opinion, the government isn’t doing such a great job of incentivising renewables. But it’s the system that’s broken. The way buildings are built isn’t optimised for renewable capacity.
For example, in Build to Rent, there’s space on most roofs for solar panels. However, the rules dictate that any renewable energy you put into a building can only be used in front of the landlord’s meter and not via standard fiscal meters into each flat. This means any surplus must go into the grid – for which landlords get paid a pittance – and they then have to buy it back at a very high market rate.
Landlords often don’t go to the capital expense because of the lack of return and the need to only cover their own consumption which is basically maintenance and upkeep, common amenities, and staffing.
Build to Rent is deemed a commercial asset and not residential, so this means that the landlord can control the incoming supplies. That’s a bonus for landlords who can buy their energy wholesale, making it as green as they wish.
So, who is going to deliver Net Zero?
From the perspective of delivering Net Zero, being able to procure energy is just as important as having the ability to produce a meaningful report. Right now, I see there is a real temptation in the sector to wave a report at the shareholder meeting and say: “We’ve got this, so we’re on track.”
The big energy companies are going to be vital to this transition. We need them – and need to encourage them to increase their production of renewables and transition faster.
We also need more people on our side of the argument, but to do this we need make being a sustainability enthusiast less divisive and more mainstream. Just because you can’t be an environmental superhero doesn’t mean you can’t be an environmentalist, and just because you’re an environmentalist doesn’t mean you should be seen as a radical.
What does the short and long-term look like?
The short term will be the transition away from gas and petrol.
We must invest in renewables. It’s the one part of the Net Zero mission which can be achieved in the short term if we get the process right.
It’s possible that the future involves carbon pricing. Large companies already trade in it. The German government have embedded it into policy, though it isn’t a vote winner. Bearing in mind our selective hearing on matters environmental, it’s easy to see why governments are hitting the polluter in the pocket.
Any final thoughts?
If you’re a fund manager, it’s time to stop taking lucrative, short-term decisions and start factoring in the long-term prospects of the planet.
More generally, I would encourage everyone to do something – big or small. My environmentalism is about wasting less; it’s about recycling and reusing in a circular economy.
So, eat less meat, recycle properly, do something. We all have the capacity to have a positive impact.