141103 GOT Guidebook (with cover & back)_final - page 63

HKGBC Green Tenancy Driver for Office Buildings
Method 3:
“The Green Deal”
Landlord and Tenant can work together
to strike a “Green Deal”. Green Deal was
a policy founded by the UK government
proposing that Tenant or homeowner can
apply to power providers for a loan to
fund improvements that can lead to energy
savings (Green Deal: energy saving for
your home - GOV.UK, 2014). This loan is
then repaid through their energy bills. It can
be applied to the same situation in Hong
Kong, but the power provider is replaced
by the Landlord or Property Management
Company. The Landlord can propose this
policy to the GOT Committee. For example,
if the windows were proposed to be
retrofitted to double glazed glass by the
Landlord, he/she will bear the bulk of the
initial setup cost. The Tenant will then pay
back the costs of capital through its energy
bills and/or management fee.
The factor of payback duration must
also be considered as the tenancy might
change. Furthermore, there is the issue of
transparency. For example, the Landlord
can charge the same amount of energy bills,
but the double glazed glass has reduced
the HVAC’s electricity consumption. Thus, the
real fee is lower. There must be a clear path
of communication between stakeholders as
well as certain agreements that allow the
payback to continue even if there is a change
in Tenant. It is stressed that the repayment
value should not exceed the amount saved
from gains in energy efficiency as this will
defeat the entire purpose of the scheme.
Split Incentive is an inherent part in the progression to Green Tenancy. Due
to the asymmetry of interests, it will cause friction between stakeholders.
However with the proper preparation and planning, such as collaboration
and agreement between parties, split incentive can be solved. Ultimately by
following this Roadmap, the concept of split incentive is well recognised, and a
suitable solution is able to come up and prepared for Green Lease.
CH 6
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