Decarbonising real estate with Octopus Energy: driving adoption, and ROI
The urgency to decarbonise real estate is paramount. In the UK, the property sector alone accounts for between 20% to 25% of all national emissions. Globally, the built environment is responsible for a staggering 40% of greenhouse gas emissions.
At the same time, the vital transition to low-carbon real estate faces unique challenges in the UK. Our old building stock means poor insulation, outdated heating systems, and structural limitations make retrofitting expensive and complex. Financial returns on deep retrofits can be slow, and access to finance remains limited, especially for low-income homeowners and SMEs. Grid constraints, a shortage of skilled specialists, and a lack of consumer trust further hinder adoption.
Yet these challenges are being transformed into opportunities by innovative players. This is a quick summary of key takeaways from leaders in real estate decarbonisation, highlighting how technological innovation is reducing our buildings’ carbon emissions and saving businesses, homeowners, landlords, and tenants a substantial amount of money.
Core needs & strategic imperatives
Successfully decarbonising real estate hinges on matching distinct needs with scalable solutions:
Needs of the commercial sector: compliance & asset value. Businesses need solutions that meet evolving energy regulations, enhance property valuation, and boost occupancy.
Needs of the residential/consumer sector: energy savings & engagement. Homeowners and tenants want solutions that lead to tangible bill reductions and improved comfort, in order to be encouraged to participate in decarbonisation efforts.
Achieving these goals requires effective implementation at scale. To do this, artificial intelligence (AI) will play a key role in building solutions and addressing decarbonisation complexities. Based on our discussion, there are three key pillars to ensure success for AI adoption:
Specific needs understanding: Understand what real estate owners, investors, and occupants need to decarbonise effectively, turning complexity into solutions with tangible outcomes.
Laser focus & clarity: Clearly define your business capabilities and differentiate from external partners to ensure maximum success.
Automate & scale: Once proven, automate deployment and scale solutions to maximise impact and overcome specialist shortages.
Key players
Where there's a problem, there’s a solution, and these three businesses are tackling it head on.
Octopus Energy: on a mission to reduce the UK’s reliance on gas and offer out-of-this-world customer service, Octopus actively brings customers on board. Their "Tenant Power" initiative is a new energy tariff designed to help social housing tenants reduce energy bills and incentivise landlords to invest in green technologies. This tackles financial barriers and fosters consumer trust. Their ambitious goal to build 100,000 homes fully powered by decarbonised energy with zero energy bills by 2030 underscores the potential for large-scale residential decarbonisation.
UpGreen: helps owners avoid compliance expenses, increase occupancy, and improve rates per square metre. This is achieved by quickly identifying and implementing compliance upgrades where the value from increased occupancy and valuation is greater than the capital expenditure. This directly resolves long payback periods and limited access to finance for deep retrofits. You can upload an address today to get your EPC rating.
measurable.energy: is showcasing the power of smart energy management by automating the process of finding and removing energy waste at scale. For example, using measurable.energy’s solutions, Tortilla - the nation-wide restaurant chain - achieved a 34% reduction in energy usage in just weeks. This highlights how precise data, focused action, and automation lead to substantial energy and carbon savings, addressing the challenge of identifying effective interventions.
A vision for sustainable real estate
The journey to decarbonise real estate is complex, but by focusing on understanding core needs, maintaining a laser-like focus on actionable solutions, and leveraging technology we can transform the UK's ageing building stock into efficient, sustainable assets.
This collaborative approach, which prioritises both environmental impact and tangible financial returns for all stakeholders, from large commercial portfolios, to individual tenants is not just about reducing emissions; it's about creating healthier, more valuable, and truly future-proof places to live and work.
