Developing an Energy Efficiency Standard for Social Housing: consultation

6. Proposed energy efficiency standard for social housing

This chapter looks at:

• The draft Energy Efficiency Standard
• The alternatives that have been considered
• The possible role of exceptions to the Standard

6.1 The aim of the proposed standard is to improve the energy efficiency of, and minimise carbon emissions from, existing social rented housing. This is important both to help landlords provide warmer, more energy efficient homes for their tenants, and to contribute to the Climate Change targets of 2020 and 2050.

Proposed energy efficiency standard. Using the modelling work and through consultation with our working groups the proposed energy efficiency standard for social rented housing is to establish a minimum EPC Rating ( which we propose should be the Environmental Impact score ) which every social rented dwelling will be required to meet by 2020. The standard will be different for different dwelling types. This would enable the Scottish Government to measure reductions in emissions from the 1990 baseline.

6.2 Both the Environmental Impact ( EI) and the Energy Efficiency ( EE) ratings are generated as part of the EPC process. The proposed standard is based on the Environmental Impact Rating (i.e. carbon dioxide emissions) which is generated as part of the EPC assessment. It is proposed that a minimum Environmental Impact Rating would be established for broad categories of similar house types based on the modelling. For example, a top floor flat on the gas grid would be expected to achieve an EI rating of "X", whereas a mid-terraced house heated by electricity would be expected to achieve a rating of "Y".

6.3 In most scenarios both scores are improved in tandem, therefore achieving a higher EI rating should lead to a more energy efficient home. However as the EE rating is based on the cost of fuel, in a minority of cases where high emissions reductions can be achieved, the cost of the fuel is actually higher. This could be the case for technologies such as biomass.

6.4 Therefore to act as a safeguard, it is proposed that should a minimum Environmental Impact ( EI) rating be used for the energy efficiency standard, the dwelling's current energy efficiency rating should not decrease as measures are installed.

Benefits of the proposed energy efficiency standard

6.5 As described above, we have drafted detailed case studies modelling the impact of a range of measures, providing assessment of appropriate improvements to the energy performance of that dwelling type. Landlords would have flexibility to assess their stock and implement energy improvements that they consider are most appropriate, which are not necessarily the same improvements identified in the case studies, in order to meet the required EI Rating identified for that dwelling type. Depending on the case study type, the efficiency of services and the fuel type, the indicated emissions reduction will vary, taking account of these variables.

6.6 A summary of the key aspects of the proposed standard is set out below:

• It's fair in that all landlords will be expected to make an equivalent contribution, relevant to their stock.
• It would allow the Scottish Government to measure reduction in emissions since 1990.
• Landlords will have full flexibility in the measures they install.
• As the target will be a minimum EPC rating, landlords can take into account any improvements that have already been made.
• All tenants would benefit from a minimum level of energy efficiency.
• The information required is generated when an EPC is produced.
• It only considers space and water heating and lighting, so concentrates on areas where landlords can make a difference.
• Landlords would need to have a good understanding of their stock, though some may have been working towards a 100% survey of their stock as part of the SHQS.

Question 12: Taking into account the reasons above, do you agree that establishing a minimum Environmental Impact Rating for the main dwelling types is the most practicable format for the standard? Yes/No.

If not, please explain why.

Question 13: If you think that the standard should be a minimum Environmental Impact rating, do you think that there should also be a safeguard that the dwelling's current Energy Efficiency rating should not reduce?

Question 14: In assessing your stock against the proposal for a new standard for social housing, do you foresee any significant challenges in obtaining individual property details across your stock? Yes /No

If yes, please explain why.

Proposed ratings

6.7 The tables below set out the proposed scores to be met by the main dwelling types:

Standard for gas heated homes for 2020

Broad Type	Minimum EPC ( EI) rating for the standard	Minimum EPC (energy efficiency) rating
Top floor flats heated by gas	C (70)	C (75)
Mid floor flat heated by gas	C (80)	C (80)
Ground floor flat heated by gas	D (65)	C (70)
Mid-terraced house heated by gas	C (70)	C (75)
End terrace / Semi-detached heated by gas	D (65)	C (70)
Four in a block - Lower heated by gas	D (60)	D (65)
Four in a block - Upper -heated by gas	D (60)	D (65)
Detached / bungalow heated by gas	D (55)	D (60)

Standard for electrically heated homes for 2020

Broad Type	Minimum EPC ( EI) rating for the standard	Minimum EPC (energy efficiency) rating
Top floor flats heated by electricity	D (60)	D (65)
Mid floor flat heated by electricity	C (70)	C (70)
Ground floor flat heated by electricity	E (50)	D (60)
Mid-terraced house heated by electricity	D (55)	D (60)
End terrace / Semi-detached heated by electricity	E (50)	D (60)
Four in a block - Lower heated by electricity	E (50)	D (60)
Four in a block - Upper -heated by electricity	D (55)	D (60)
Detached / bungalow heated by electricity	E (50)	D (55)

NB It is proposed that the energy efficiency standard is based on the EI rating. The Energy Efficiency rating is also included in the tables above to give an idea of what a standard based on that rating may look like and to help inform responses to the consultation.

6.8 As noted in paragraph 3.8, the proposed minimum energy efficiency rating for electrically heated detached homes and bungalows is lower than the SHQS. There are not significant numbers of such house types within the social rented stock, and it is likely that some of them will be exempted from the SHQS. Landlords will still be expected to meet all other relevant elements of the SHQS for these properties and will now have a more realistic level of energy efficiency to reach (as well as also having to attain the proposed EI rating). This will help to ensure that the energy efficiency of all social rented properties is improved, which may not necessarily be the case with the SHQS as landlords can apply for exemptions for certain properties.

Question 15: Do you think that the ratings above are suitably challenging? Yes/No

If not, please give explanations why not and suggest more suitable ratings.

Question 16: Do you think the suggested energy efficiency rating for electrically heated detached homes and bungalows undermines the SHQS? Yes/No. Please explain your choice.

'Other' fuel sources

6.9 The table above only refers to homes heated by gas or electricity. It is clear that dwellings heated by oil, liquid petroleum gas or solid fuel will be unable to reach high levels of energy efficiency without a change in fuel source. The Scottish Government is therefore considering whether all homes heated by such fuel sources should be converted to a renewable heating system or electricity or gas by 2030. For the 2020 milestone, we propose that such homes be insulated as effectively as possible and progress measured as explained in paragraph 6.14 below.

Question 17: What are your views on whether all social rented dwellings should be heated by gas, electricity or renewable heat sources by 2030?

Alternatives to the proposed energy efficiency standard

6.10 The two main other options that were considered by the working groups were:

6.10.1 Establish a set of measures that all homes would be required to meet. However, this was rejected for the following reasons:

• Does not consider actual energy usage and actual carbon emissions.
• Landlords are restricted in how they meet the standard.
• Would require substantial detailed development of the technical specification of a standard and equivalent guidance for each dwelling type.
• Would require exemptions/abeyances, which would mean some homes aren't energy efficient.

6.10.2 Set a minimum percentage reduction in emissions for each of the different dwelling types. This approach has been proposed for unusual dwellings (see below) but was considered to be too complicated to apply and to regulate for the vast majority of homes. This method would require that landlords had complete details for every dwelling in their stock from which they would calculate their own baseline for each dwelling from which a required set reduction would be made. The resultant standard would be highly complex to regulate. It was felt that EPC ratings were widely recognised and understood by landlords and tenants and would be a preferred method for the vast majority of dwellings.

Question 18: Do you think that either of the options above should be reconsidered? Yes/No.

If yes, please explain which option you prefer and why.

Aggregation

6.11 The working group considered whether the energy efficiency standard should be aggregated across a social landlord's entire stock or set at an individual dwelling level. The latter was preferred as it would help to improve all stock and provide a minimum level of energy efficiency to all social rented tenants.

Question 19: Do you agree that the standard should apply to all individual homes and not be aggregated across a landlord's stock? Is this practicable?

Possible role of exceptions

6.12 Currently, where it is not possible for certain aspects of particular stock to achieve the SHQS, allowances have been made for exemptions. This process has been agreed by the Scottish Government with the assistance of a panel of social landlord representatives nominated by COSLA and the SFHA.

6.13 As already mentioned, the more homes that are excepted from an energy efficiency standard, then the greater the reduction in emissions will need to be to meet Climate Change targets. There would also be a risk of tenants in such homes being treated unfairly by comparison with others in homes that meet the standard.

6.14 As the case studies are designed to cover the main dwelling types, it is envisaged that there would be no requirement for any exceptions in the new standard. However, as noted above the modelling work and case studies don't cover all social rented housing; there are some more unusual types of dwelling in the sector. Even within common house types there are individual dwellings where circumstances differ. The ongoing peer review process is considering how best to handle the approximately 10% of the stock which isn't covered by the work done to date. However, one suggestion is that a methodology is set out for landlords to follow. This would require them to use the 1990 base assumptions to record a baseline for their individual dwelling and calculate a set percentage reduction to identify a required improvement. This method could be used for all unusual dwelling types, including types where the 1990 baseline is significantly below the generic baseline for a similar dwelling type. The percentage reduction would be set by Scottish Government to recognise the different dwelling circumstances and be in line with the burden on other dwelling types. This is set out in more detail in the example box below.

Example of the Proposed Methodology for dealing with Hard-to-Treats.

Example: no-fines concrete, semi-detached, gas heated dwelling, constructed in 1978.

1. The landlord enters survey details from the individual property into RdSAP using the same assumptions for the building services elements as for the generic dwelling type (as discussed in 4.20). The relevant generic building type for this example will be 1976-1983 built gas heated semi-detached house.

2. The landlord calculates the baseline Environmental Impact rating. For this example dwelling the baseline EI rating is F (28) with approximate CO ₂ emissions of 103 kg/m2/year. This is lower than the generic building type which is E rated.

3. The Scottish Government will set the required percentage reduction and the landlord will calculate what the reduction in emissions should be for that individual dwelling. For example, the dwelling must achieve a minimum 42% reduction in CO ₂ emissions, reducing the emissions to approximately 60 kg/m2/year.

4. The landlord considers the range of appropriate cost effective options by which the dwelling can meet the required reduction in energy and emissions. These are likely to include:

• 100% low energy lighting;
• A condensing boiler;
• Time and temperature zone controls;
• Roof insulation; and
• Double glazing.

5. The landlord chooses the best combination of measures and undertakes the required work

6.15 This approach will only be permissible for certain house types and certain circumstances, which will be defined in the final version of the standard. We have asked earlier for people's views on which house types should be defined as hard or expensive to treat and we are also asking the peer reviewers to consider ways to deal with such properties. Responses to the consultation and the conclusions of the peer reviewers will be used to finalise the relevant house types and the proposed percentage improvement to be achieved.

Question 20: Do you agree that the approach to unusual dwellings outlined above could offer a reasonable way forward for applying a standard to these dwellings?

Question 20(a): Do you agree that the percentage reduction should correspond to Climate Change targets and be set at 42%? Yes/No. If not, at what level do you think the reduction should be set that will be achievable but provide a meaningful contribution to the improved energy efficiency of social rented housing?

6.16 There are also other potential obstacles landlords would face in bringing properties up to the standard, in particular:

• tenants refusing to consent to improvements in their homes; and
• other owners/landlords in a mixed tenure block refusing to consent to external or communal improvements.

6.17 The design of any future standards for energy efficiency for private sector housing may have an impact on this second issue. The Sustainable Housing Strategy consultation raises this issue in Chapter 2.

6.18 However, as the social sector is likely to be working towards this new standard before any regulation might be brought in to private sector housing, and any such regulation would not affect tenants of social housing, there may need to be a continued role for abeyances for specific instances. Where a landlord is unable to get the consent of the tenant (for improvements to a particular home) or another owner (for communal improvements), then these would be treated on a case-by-case basis and landlords would potentially be given more time to meet the proposed rating.

Question 21: Do you think that there should be exceptions to the proposed energy efficiency standard? If so, how should they be treated?