Energy Efficiency Standard for Social Housing post-2020 (EESSH2): consultation analysis

Executive Summary

Background

This summary presents the main findings from the analysis of responses to the consultation on the Energy Efficiency Standard for Social Housing post-2020 (EESSH2). The proposal is to maximise the number of homes in the social rented sector attaining Energy Performance Certificate (EPC) Energy Efficiency (EE) Rating B (hereafter referred as EPC B) by 2032. This would be supported by a formal opportunity for review proposed for 2025 to assess progress and consider the introduction of air quality and environmental impact elements to the 2032 milestone; and a minimum standard that no social housing should fall below EPC D from 2025.

The consultation opened on 2 May 2018 and closed on 27 July 2018. It asked 12 open questions. A total of 66 responses were received, of which 61 were from groups or organisations and five from individual members of the public.

Views on the proposed target to maximise the proportion of social housing meeting EPC B by 2032

Comments at this question were often extensive and there were a number of key themes to emerge from the analysis, including: concerns that meeting the proposed target will be very challenging; particular challenges associated with achieving an EPC B for some property types and for properties in remote rural locations; and concerns that the costs of improvement works would have to be met by rent increases.

Some respondents began their comments with a broad statement of support for various aspects of national policy on energy efficiency. Comments were that meeting the proposed target would be challenging. Some noted that for the target to be achieved, significant investment will be required.

Landlord respondents were among those commenting on bringing types of property up to EPC B, with older and stone-built properties, those in remote locations or off-gas grid seen as offering particular challenges.

Views on the proposal for a lower target of EPC C for detached houses and houses reliant on specific fuel types

Some respondents gave their support and saw the proposed approach as sensible or as reflecting what can realistically be achieved, and as addressing issues associated with rural and island communities. However, there were concerns that the proposal highlights the failings with the current EPC assessment process.

Views on the proposed content of the review: (a) to assess progress towards meeting the new standard

Some respondents made a general statement of support, including for the principle of assessing progress. It was noted that the uncertainty regarding the future of the gas grid will make it difficult for many landlords to make investment decisions before 2025 and so a review at this time makes sense.

(b) to consider the 2032 milestone in the context of technological developments

Some respondents stated their support for the proposal to consider the 2032 milestone in the context of technological changes, with respondents commenting on the impact emerging technologies are likely to have on achieving the milestone.

(c) consider any additional requirements of the 2032 milestone regarding air quality and environmental impact

Some respondents commented on the importance of addressing issues of air quality and environmental impact, for example because of the potential positive impact on health. However, there was a concern that these two issues appear to have been conflated in terms of the target.

Views on the timing of the review: (a) the proposal to review the new standard in 2025

A majority of those commenting noted their agreement with the proposal to review the new standard in 2025. Reasons given were that it would allow the Scottish Government to assess progress to date and would allow for any changes that would help with achieving the 2032 milestone to be made.

(b) the proposal to review the standard earlier if UK Government (UKG) has made announcements on hydrogen and the re-provisioning of the gas network

Some respondents noted their support for this proposal, with further comments emphasising the importance of the UK Government's announcement. This was around the significant effect any changes would have on energy provision and energy efficiency more generally, and on meeting the EESSH2 target in particular.

Views on the proposed minimum standard that no social housing should have an energy efficiency rating of less than EPC D

A majority of respondents noted their agreement with the proposed minimum standard that no social housing should have an energy efficiency rating of less than EPC D. Concerns tended to centre around whether landlords would have to demolish or sell stock that did not meet the standard.

Views on the proposal that the minimum standard of EPC D applies to social housing from April 2025

Some respondents agreed with the proposal for a minimum standard of EPC D applying to social housing from April 2025, with comments that the standard is achievable, and that is important and appropriate for the social rented sector to meet or exceed standards for the private rented sector.

Views on the proposal that landlords provide a short narrative explanation of their performance in their annual returns to the Scottish Housing Regulator (SHR)

A small majority of respondents agreed with the proposal. Housing Association and Local Authority respondents tended to welcome the opportunity to provide the operational context within which they are delivering energy efficiency improvements. It was thought that the return would provide useful information about how their home is performing for tenants and should be publicly available.

Views on the proposal that limited exemptions should apply to the 2025 minimum standard for new lets

Some respondents noted their agreement with the proposal that limited exemptions should apply to the 2025 minimum standard for new lets. Comments in support were that this is a practical approach and allows an additional 5-year period after the first EESSH target to bring properties up to an EPC D.

Some respondents disagreed with the proposal and with the removal of the technical and cost exemptions in particular. Their concerns tended to centre around it being technically challenging to make improvements to some properties.

Views about the proposed approach to recognising new technology in EESSH2

Some respondents supported the approach, including because it will give landlords the leeway to try new technology. The importance of taking advantage of emerging technologies and energy supply models which benefit tenants was also raised.

However, there was a concern that the use of EPC scores could actively discourage the use of new technologies, and in response it was suggested that new technology that is proven to work should be recognised through the Standard Assessment Procedure.

Views on the vision for poor energy efficiency to be removed as a driver for fuel poverty by 2040

Some respondents noted their agreement with the vision for poor energy efficiency to be removed as a driver for fuel poverty. Further comments were that everyone should be able to afford to heat their home and that if EPC B, or even EPC C, is achieved across the stock then homes would be energy efficient.

Views on the vision for social housing to be carbon neutral by 2040

Some respondents noted their support for the vison for social housing to be carbon neutral by 2040. However, a smaller number thought that while the aspiration to be carbon neutral is commendable, it is very challenging, or is not realistic in practice.

Views on the assessment of costs, benefits and funding implications of EESSH2: (a) Costs

Comments were that it is difficult for a landlord to have an accurate figure for the cost of works until they develop a costed strategy for their stock. It was also noted that the variations between landlords may mean that average costs do not apply.

Some respondents thought that Scottish Government or other funding will be needed and that clarity in relation to future funding sources would be helpful.

(b) benefits

Some respondents stated that they agreed with, or welcomed, the benefits set out in the consultation paper.

With regards to fuel bill savings, it was felt that having evidence of the real impact of energy efficiency measures would give landlords and their tenants comfort prior to committing to a significant investment.

(c) funding implications

It was noted that any loan-based funding will result in increased rents. The challenges associated with bringing certain property types up to standard were again noted as were competing calls on landlords' resources.

On funding streams, it was thought that signposting has not worked and that, in reality, landlords have funded recent EESSH compliance work.