Heat in Buildings Bill consultation: Fairer Scotland impact assessment

Stage 3 – Assessment and Improvement

Pros and cons of these options?

38.1 The proposals for the Heat in Buildings Bill have been written with the intention of having a positive impact in decarbonising heat and reducing emissions from buildings while considering our legal obligations in tackling fuel poverty as well as other socio-economically disadvantaged groups. The options set out below will help to mitigate inequalities of outcome that may nonetheless arise.

Adjustments to proposals to address inequalities associated with particular groups - Particular communities of interest or communities of place who are more at risk of inequalities of outcome?

39.1 We have identified the following mitigation measures to combat the negative impacts identified:

• The Scottish Government currently provides free and impartial advice, support and in some cases finance, through Home Energy Scotland (HES), Local Energy Scotland (LES), the Green Public Sector Estate Decarbonisation and Business Energy Scotland (BES).
• The HES advice service provides in-depth advice to householders and landlords on low and zero emissions heating technologies, other domestic renewables, and more complex energy efficiency improvements. It acts as a referral scheme for the Scottish Government funded financial support schemes. These include our Area Based Schemes (ABS) and our flagship fuel poverty scheme, Warmer Homes Scotland, which provides installation of grant funded heating and energy efficiency measures. It is also a gateway to domestic grants and loans programmes for heat and energy efficiency improvements, including the PRS Landlord Loan scheme and HES Grant and Loan Scheme.
• LES manages the Community and Renewable Energy Scheme (CARES), which helps communities to engage with and benefit from the energy transition to net zero emissions. It provides advice and support – including funding – to communities across Scotland, looking to develop renewable energy, heat decarbonisation and energy efficiency projects.
• People will have different levels of knowledge and understanding about clean heating and energy efficiency options, and will value good and impartial advice. We intend to make sure that this remains available; we will do this by listening to what people want and need, working with installers and continuing to develop and build on the support that we already provide – especially in the early years following our regulations.
• Our advice and support programmes will continue to support energy efficiency measures, and for those households requiring additional support these services will continue to provide help on tariff switching, energy behaviours and make onward referrals to ensure that all households, including those with socio-economic disadvantage receive the support for which they are eligible.
• Public funding and support will continue to play a big part in helping people make the changes needed by the proposals in this document – but it can't and won't meet all of the costs, and we will need private finance and investment to play a big part. That is why our Green Heat Finance Task Force is looking at new ways to help people and organisations make their properties warmer, greener and more efficient, and to overcome the upfront costs
• We know that in order to mitigate potential health impacts, robust standards for energy efficiency installations are required. We are proposing to include powers in the Heat in Buildings Bill to set a minimum standard of energy efficiency. While the details of how this will operate in practice will be laid out in a future consultation
• Place or area based delivery can also help achieve the right outcomes and reduce the costs involved. Our long running Area Based Schemes, delivered by Local Authorities, are good example of this, and can attract larger scale institutional investors and regenerate entire neighbourhoods. We will work with Local Government to explore ways to build on our Area Based Schemes and achieve these goals.
• Scotland's local authorities will use Local Heat and Energy Efficiency Strategies (LHEES) and Delivery Plans to set out the long term plan for decarbonising heat in buildings and improving their energy efficiency across an entire local authority area. Local Government also has a key role in initiatives like Area Based Schemes, leading heat network development, and efforts to improve the heat and energy efficiency in our social housing. We will work with Local Government to determine its role as part of the regulations which will come from this Bill, and what powers and resource might be needed.
• LHEES could also help people receive appropriate support and advice, with support and advice tailored to local areas and communities across Scotland. Local authorities should publish their first LHEES by the end of 2023 and on a five yearly basis after that – meaning that these plans can help target support and advice as our new regulations are introduced.
• We also recognise that the costs of delivering energy efficiency measures are higher in rural and island areas. A rural uplift included in the new HES grant of £1,500 applies to both the heat pump and energy efficiency grants. This is on top of funding for heat pumps up to £7,500 and for energy efficiency improvements – up to 75% of the combined cost of the improvements and up to the maximum grant amount of £7,500. This uplift increases the heat pump grant flat rate and the maximum limit of the energy efficiency grant to £9,000. An additional £7,500 of funding is available as an optional interest free loan for both heat pumps and energy efficiency measures.
• In 2019, the Scottish Government published a National Islands Plan. Included within this plan's objectives are commitments to reduce levels of fuel poverty and to contribute to climate change mitigation and adaptation and promote clean, affordable and secure energy. Work is ongoing in relation to these commitments.
• We will take steps to ensure that everyone, including owner occupiers, tenants, private and social landlords, SMEs and communities, has the opportunity to help shape the decisions we take at a national and local level on how we heat our homes and buildings in the future. We will consult extensively with stakeholders and citizens as on these proposals and will follow up with another impact assessment that builds on the findings of this impact assessment.

39.2 We continue to build the evidence base on the interactions between our fuel poverty, child poverty and climate commitments, and are applying that knowledge to our policy design and to our programmes, mitigating any risk of unintended consequences, and tracking progress and learning by doing in order to adjust immediately where unintended consequences nevertheless arise.