Energy Efficiency Standard for Social Housing: guidance for social landlords

5.0 Benefits, costs and funding

Benefits of delivering the EESSH

5.1 For tenants, the EESSH will mean that in the main no social property will be lower than a 'C' or 'D' energy efficiency rating, meaning that tenants should benefit from a warmer home, which could mean lower fuel consumption, lower energy bills and less tenants in fuel poverty. Attaining the EESSH, in addition to regulations specifying minimum energy efficiency of new boilers, is projected to provide benefits to social tenants of around £127m each year due to improved energy efficiency. This is equivalent to an average of around £210 per year per household.

5.2 For climate change carbon abatement, attainment of the EESSH is projected to reduce carbon output by 760kT per annum from the social rented sector.

Estimated costs for social landlords of compliance with the EESSH

5.3 The Scottish Government worked with case study landlords to produce estimates of EESSH compliance rates and associated additional costs. On the basis of compliance with the SHQS, 64% of social housing would already meet the relevant EESSH rating at 01 April 2015. The table below reports the results.

Table 3. EESSH Scottish level costs and compliance

Funding

5.4 It is anticipated that landlords will make use of the available funding from public and regulated energy company programmes. A full list of available funding sources can be found on the EESSH website.

5.5 Social landlords are eligible for the Carbon Saving and the Carbon Saving Communities elements of ECO. The Scottish Government's Home Energy Efficiency Programmes for Scotland ( HEEPS) funding will help landlords in circumstances where owners in mixed tenure stock are reluctant to agree to the installation of common measures. Social landlords will also be able to use a proportion of this funding for enabling costs such as home visits, transport and scaffolding.

5.6 A variety of other funding sources are available. Some of them, such as the Renewable Heat Incentive ( RHI), will be of particular importance for funding the more expensive further measures, including renewable options such as air source heat pumps and biomass boilers. The RHI pays participants of the scheme a fixed tariff for every unit of renewable heat generated, with tariffs set so that the cost of upgrading to these technologies will be repaid over the lifetime of the upgrade. The availability of funding for energy-efficiency measures is supported not only by Scottish Government and UK Government commitments to their respective climate change targets, but also by the EU Energy Efficiency Directive (2012/27/ EU), which establishes a common framework of measures for the promotion of energy efficiency to ensure the achievement of the EU's 2020 energy-efficiency target. This includes a legal obligation to establish energy-efficiency obligations schemes or policy measures in all Member States.