Scotland's Energy Efficiency Programme: consultation analysis

Executive Summary

Introduction

1. The Scottish Government consultation on Scotland's Energy Efficiency Programme ( SEEP) was one of five consultations in relation to the energy sector published by the Scottish Government in January 2017:

• Consultation on a draft Energy Strategy.
• Consultation on a draft Onshore Wind Policy Statement.
• Consultation on Scotland's Energy Efficiency Programme ( SEEP).
• Consultation on Local Heat and Energy Efficiency Strategies and District Heat Regulation ( LHEES).
• Talking "Fracking" - A Consultation on Unconventional Oil and Gas.

2. This report focuses on Scotland's Energy Efficiency Programme ( SEEP) only. Separate reports have been prepared on each of the other consultations. Why Research has produced four of the five reports for the Scottish Government.

3. The consultation document on Scotland's Energy Efficiency Programme ( SEEP) set out the long-term vision for Scotland's building stock and looked at different options for programme and policy design to deliver the vision.

4. The consultation asked 27 questions and covered a range of issues including:

• the vision, aims and objectives of SEEP
• the role of regulation, standards and financial incentives
• appropriate levels and sources of funding
• the provision of advice, information and consumer protection
• how to establish and sustain local supply chains and trusted delivery agents
• the balance of local and national responsibilities, and programme delivery

5. The consultation ran from 24 January until 30 May 2017. The findings from analysis of responses to the consultation will be used to inform policy decisions on the overall design and operation of SEEP.

6. The following paragraphs summarise the main points arising at each of the questions posed in relation to the consultation document.

Respondent Profile

7. 104 organisations and individuals, from the following respondent sub groups, submitted a response to the consultation:

Respondent Groups

	Number
Academia / Research / Training	8
Building / Insulation	18
Energy Industry	20
Housing	6
Local Government	18
Public Sector / Delivery Agency / Regulator	6
Third Sector / NGO	14
Other organisations	4
Total organisations	94
Individuals	10
Total respondents	104

Main Findings

8. The following paragraphs provide a summary of the main themes and those occurring most frequently in relation to the questions posed in the consultation.

Situation report - the current landscape

1. Respondents commented on the importance of local authority involvement, delivery and partnership working. The approach taken in the Home Energy Efficiency Programme: Area-Based Schemes ( HEEPS: ABS) was supported by many respondents.

2. Funding was another key theme with respondents welcoming schemes providing interest-free loans and grants. Respondents also identified the provision of support, advice and information from some specific schemes such as Home Energy Scotland as working well.

3. However, respondents commented that the number and complexity of schemes on offer can create a confusing and challenging delivery landscape, particularly where schemes do not align. Availability and length of funding were seen as issues, with comments that short funding timescales can make both planning and delivery difficult. Respondents also highlighted potential issues around capacity, especially at local authority level, to deliver SEEP.

4. Respondents also focussed on the need for quality and quality assurance in relation to installations. This included a need for clear quality guidelines and independent quality assurance to ensure quality is not compromised as the number of installations increase.

5. A number of points were raised in relation to consumers, including that there is a need to raise awareness of the aims of SEEP, the schemes and support available as well as a need to ensure consumers are adequately protected.

Aims and objectives of SEEP

6. Overall respondents welcomed the aims, objectives and vision of the programme. In considering how best Scotland can meet these, respondents suggested a focus on energy efficiency, particularly given its importance as a driver in reducing fuel poverty. The need to address fuel poverty was a key and recurring theme throughout responses.

7. In terms of prioritisation respondents suggested targeting of fuel poor households, existing buildings, or the least efficient buildings first.

8. In relation to milestones and targets, respondents commented that final targets need to be long-term to enable planning and allow for market and behaviour change. Respondents also stressed that targets should be realistic and achievable and should take into account, or be aligned with, targets and policies in other areas. Respondents also emphasised the need for local delivery and flexibility to meet national targets.

Scenarios

9. The consultation acknowledges that there are many different routes to achieving the vision and presented a series of potential policy and delivery scenarios.

The role of regulation, standards and financial incentives

10. Looking at regulation, standards and financial incentives, respondents commented on the need to apply the same standards to privately rented and owned homes as apply to the social sector.

11. The need for targets to address fuel poverty also featured strongly. Respondents also wanted to see clear and long term standards and regulations as they felt changes can lead to lack of confidence for both investors and consumers.

12. The main trigger points identified by respondents were: point of sale; the start of a lease; and/or major renovations. Although respondents noted that these would not capture all buildings and suggested that others would need to be identified.

13. In relation to the benefits of using financial and fiscal incentives to support energy efficiency, a main theme in responses was that of the need for a carrot and stick approach that uses both incentives and disincentives. Respondents discussed the use of grants, low cost or interest free loans and tax incentives. Views on the use of council tax and non-domestic rates as an incentive were mixed. Some respondents suggested these are an effective way to incentivise property owners, while others note the challenges of using local taxes.

14. Energy Performance Certificates ( EPCs) were identified as a good approach to assessing energy efficiency, although some disagreed noting concerns with the underlying methodologies.

The appropriate levels and sources of funding

15. Funding for the installation of energy efficiency improvements and lower carbon heat supply again attracted comments on the need to ensure that those facing fuel poverty took precedence in receiving grants. Views on how the able-to-pay sector should be supported were mixed, although many respondents suggested they should have access to low cost loans. The need to incentivise the able-to-pay sector was also highlighted, particularly given low-levels of engagement in recent years.

16. Building the market and building confidence in the market was seen as necessary in encouraging private investment in energy efficiency and heat decarbonisation. Respondents suggest that this should be done through the creation of a stable and long-term policy framework. Ensuring quality was also mentioned as was the need for long term funding; clear communication; and robust standards and regulation.

The provision of advice, information and consumer protection

17. Respondents suggested that advice and information needs to be well known, trusted, independent and impartial. Many referred to the good track record that Home Energy Scotland has, suggesting that it should be continued and built upon. Another main theme raised by respondents was the need for advice to be tailored to the individual, rather than generic, and preferably delivered face-to-face. Many also thought that behaviour change should be included in the advice.

18. Smart meters were seen as a good first step in engaging consumers and enabling them to understand their energy usage. Some respondents saw benefits in linking SEEP to smart meter delivery, however others commented that rollout timescales and capacity of the smart meter programme could limit the links that can be made.

19. The need for local authority-led schemes emerged in responses to the question of how SEEP can be designed and promoted to build consumer confidence; respondents said that this should be coupled with national leadership.

20. Another main theme was the need for robust consumer protection measures, including redress. Respondents suggested that robust standards would be needed with quality assurance and accreditation and including quality marks. A small number suggested an independent watchdog or regulatory body would be required.

21. Respondents wanted to see the proposals from Each Home Counts adapted to the Scottish context and built upon, in particular the quality mark, consumer charter, code of conduct and code of practice.

The establishment and sustainability of local supply chains and trusted delivery agents

22. The need for long term programming and funding and for clear targets to provide certainty and market confidence were mentioned as key to expanding and upskilling local supply chains.

23. In addition, respondents noted that companies would want certainty around funding and a clear pipeline of work to encourage them to invest in training.

24. There were calls to involve the appropriate professional bodies in the design and delivery of training courses as well as in the design and oversight of SEEP. Respondents also noted the need to ensure that smaller organisations can participate and cautioned that the cost of accreditation can act as a barrier.

25. The main benefits mentioned in relation to the benefit to communities of the expected job creation were the benefits for local areas, people and businesses and of increased employment and stable jobs.

The nature of programme delivery

26. Looking at the roles that national and local bodies can play, respondents identified the need for a national scheme, with national leadership, promotion, targets, milestones and timescales, but with this delivered locally and tailored to suit local circumstances. Respondents agreed that standards should be set nationally but delivered locally, akin to those seen in HEEPS.

27. While respondents felt that area based schemes have been shown to work successfully, views were mixed on the relative benefits of area-based schemes as against those targeted at particular sectors or tenures. Many respondents shared the view that a programme combining both area- and sector- based delivery would be needed.

The balance between local and national responsibilities

28. In relation to the overall balance between national and local target setting, respondents commented on the need for a national scheme, with national targets, to be delivered locally with local flexibility in order to meet local needs.

29. Respondents felt that a good governance structure is needed to oversee any framework of responsibilities between national and local government. Many respondents suggest that there should be an independent national body with responsibility for strategic oversight and delivery of SEEP.

Monitoring and review

30. Respondents stressed the need for effective and on-going monitoring of SEEP to inform and improve its delivery. Several respondents commented on the need for real, rather than modelled data, to be used as part of a monitoring framework to ensure that the Programme is effectively monitored and evaluated. Respondents suggested outcomes and wider benefits should be monitored as well as outputs, and commented that there should be clear reporting criteria.