Energy efficiency in social housing

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The Energy Efficiency Standard for Social Housing (EESSH) was introduced to improve the energy efficiency of social housing in Scotland and to help reduce energy consumption, fuel poverty and the emission of greenhouse gases.

When the EESSH was introduced in March 2014 it set a first milestone for social landlords to meet for social rented homes by 31 December 2020. A second milestone (EESSH2) was confirmed in June 2019, for social rented houses to meet by December 2032.

We committed in the Heat in Buildings Strategy (October 2021) to reviewing EESSH2 in 2023 with a view to aligning it with the net zero targets.

The independently chaired Zero Emissions in Social Housing Taskforce (ZEST) recommended the EESSH2 review be accelerated so to ensure alignment with net zero and provide clarity for social landlords.

The EESSH milestones

The first EESSH milestone set a target of EPC C or D to be met by 31 December 2020, dependent on dwelling type and fuel type.

The second milestone (EESSH2) was confirmed in June 2019, for social rented houses to meet by December 2032, and were as follows:

"All social housing meets, or can be treated as meeting, EPC Band B (Energy Efficiency rating), or is as energy efficient as practically possible, by the end of December 2032 and within the limits of cost, technology and necessary consent.

In addition, no social housing below EPC Band D should be re-let from December 2025, subject to temporary specified exemptions."

However, these milestones are now temporary on hold, pending the review of EESSH2, see Section 3.

The EESSH2 review

The EESSH2 review was required because the 2032 milestone was not aligned with net zero targets for heating. To meet our net zero target, by 2045 all homes in Scotland must have significantly reduced their energy use, and almost all must be using a zero direct emissions heating system.

We convened a review of EESSH2 in September 2022, to bring it in line with our net zero target, and to provide clarity to the social housing sector.

As set out above, during the review of EESSH2 the 2025 and 2032 milestones are temporarily put on hold. However, we issued interim guidance for social landlords (October 2022) to the sector for during the review period until a new standard is established. This acknowledges the need for the sector to have clarity whilst the review is under way.

We recently ran a consultation to invite views on proposals for a new Social Housing Net Zero Standard (SHNZS) to replace EESSH2. This consultation closed on 8 March 2024, and responses are now under independent analysis. We will publish a report of these analyses in due course.

Support for energy efficiency measures and zero direct emissions heating

Social Housing Net Zero Heat Fund

The Social Housing Net Zero Heat Fund (SHNZHF) provides grant funding to social landlords in their transition to net zero.

The SHNZHF launched in August 2020 and is making at least £200 million available to social landlords until 2026 for the retrofit of their existing housing stock. The fund has undergone a review to ensure that it continues to provide the best support to local authorities and Registered Social Landlords (RSLs) in their transition to net zero. This includes, based on feedback from the sector, the extension of “Fabric First” funding support until 2026 so that local authorities and RSLs can continue to undertake projects that support more energy efficient homes.

The intervention rate for the installation of zero direct emissions heat (ZDEH) has also been increased to 60%, meaning that RSLs will benefit from a reduced match funding requirement.

Rural and island communities face different challenges when delivering decarbonisation projects in social housing so the fund has introduced uplifts to the project funding cap. For projects in rural areas, the cap will be increased by 11% and in remote areas by 22%. Rural and Remote areas can be identified using the 6 Fold Scottish Government classification.

Heat Network Fund

Our £300 million Heat Network Fund makes capital grant funding available to public and private sector organisations to support the roll out of zero emission heat networks across Scotland. This can play a significant role in enabling a large proportion of the social housing stock to convert to ZDEH.

Monitoring and regulation

The EESSH is monitored by the Scottish Housing Regulator (SHR) which takes a risk-based and proportionate approach. SHR has advised landlords that it has paused the collection of data on EESSH until after the conclusion of the Scottish Government’s review of EESSH2. It will then consult on indicators for the standard to replace EESSH2 for the Annual Return on the Charter that are appropriate to the outcome of the review.

Further information on the SHR’s approach to regulating the EESSH is available on the SHR website. Any enquiries regarding the monitoring and regulation of the EESSH should be directed to shr@scottishhousingregulator.gsi.gov.uk.

Social landlords have made encouraging progress towards decarbonisation of their housing stock, with the SHR reporting that 88% of social rented homes met the 2020 EESSH milestone at 31 March 2022.

Home energy and fuel poverty