Improving energy efficiency in owner occupied homes: consultation

Part 2: Helping homeowners to meet the energy efficiency standard

If homeowners are to be legally obliged to improve the energy efficiency of their properties, we need to consider and put in place help and support for them to do this. There is already a range of help available, described below, and we propose to build on this. We are now seeking your views on how to do that, and what additional help homeowners will need.

2.1 Knowing what measures are suitable for a particular home

In the Route Map and in previous consultations, we discussed the need for a robust assessment process that would give information to a homeowner about the measures and actions they could take for their individual property. And, if meeting the standard is to be compulsory, there needs to be a way of showing what is and isn't possible for a property, for cases where an exemption or partial exemption is to be considered.

We propose that, at point of sale (and potentially point of major renovation) – if the property does not already have a valid EPC certificate which shows that the standard is already met – then a homeowner would be required to have a property assessment carried out, as described below.

2.1.1 Overview of assessment proposals

In October 2018, the Scottish Government established a Short Life Working Group (SLWG) on Assessment. Composed of industry experts, it has produced a number of interim proposals around the assessment process.

These propose two levels of assessment – a Standard Assessment or a Full Assessment. Under section 64 of the Climate Change (Scotland) Act 2009^[13], a Standard Assessment will be mandatory at the trigger points outlined within this consultation.

Subject to legal scrutiny, the Standard Assessment will build upon the current EPC assessment process to help the homeowner to reach the regulatory standard. It will provide more functionality to allow EPC assessors to tailor recommendations for a specific property. The Standard Assessment will allow the assessor to select or insert more appropriate technical values (such as u-values or insulation thicknesses) and select the most appropriate recommendations for the property.

A proposed voluntary level of assessment, called the Full Assessment, will also be available, and will include and build upon the Standard Assessment by capturing additional data relating to occupancy and local climate. This aims to provide the property owner with a more relevant illustration of how the recommendations from the Standard Assessment will affect their specific circumstances.

Further information on the assessment process and the Interim Proposals of the Assessment Short Life Working Group can be found in Annex C. The SLWG will be continuing their work, building on their interim proposals to create a set of final proposals. The SLWG is seeking your views on their interim proposals, and will use your feedback from questions 23 to 27 below to inform this work.

Questions on the Assessment SLWG interim proposals:

23. The SLWG on Assessment propose that any new assessment regime should exist on two levels, comprising both a mandatory asset-based assessment and an optional occupancy-based assessment.
What are your views on this approach? Do you agree that an occupancy assessment should be optional? Are there specific inputs that should be included in both? Please explain your answer.

24. The SLWG on Assessment propose that the output of the assessment should be a report with tailored recommendations that set a clear pathway to both regulatory compliance (i.e. EPC band C) and zero carbon. There are conflicts between meeting the EPC rating and zero carbon. What are your views on how this can be handled/mitigated? Please explain your answer.

25. The new assessment proposals from the SLWG on Assessment include more of an advisory role for the assessor. What are your views on the additional skills and training required to deliver this role? Are existing Domestic Energy Assessors best placed to provide the tailored recommendations? What risks and conflicts do you foresee and how would you propose to mitigate them? Please explain your answer.

26. The SLWG on Assessment propose that the tailored recommendations to improve energy efficiency and achieve zero carbon should consider the legal designation of buildings, obvious defects or condition issues, and local costings. Do you foresee any liability issues in this approach and if so, what suggestions do you have to mitigate them? Do you believe the inclusion of local costings to be practical and what are your thoughts on what level should be considered 'local'? Should the local cost of energy also be considered? Please explain your answer.

27. The SLWG on Assessment propose that the assessment should provide a theoretical indication of whether recommendations are technically feasible. Please provide your views on who should determine actual technical feasibility? Should this be a qualified installer or someone else? Please explain your answer.

2.1.2 Advice is available from Home Energy Scotland

At the core of our offer to homeowners (and all other households) is Home Energy Scotland (HES), which provides free and impartial advice on energy efficiency, energy saving and home renewables measures.

HES also provides advice to households on funding and support available for energy efficiency and home renewables and makes onward referrals to Scottish Government fuel poverty programmes, Local Authority Area Based Schemes, income maximisation support and, for vulnerable customers, referrals for tariff switching advice. HES Energy Carers visit the most vulnerable people in the community in their own homes to ensure they get the support they need.

We propose to continue providing an advice service, available to all.

2.2 Finding Suppliers and Ensuring Quality

In order for householders to act on the recommendations of the assessment it is important that they will have access to suppliers and installers who can provide a high quality service. Previous consultations on Energy Efficient Scotland^[14] have identified a consensus that the availability and expertise of trusted suppliers and installers is essential for the programme to succeed. Consumer protection, quality assurance and skilled trades throughout the supply chain will be critical.

As a result, we set up an independent, industry-led Short Life Working Group (SLWG) focusing on the quality, skills and consumer protection requirements of the Programme.

In March 2019, the SLWG published recommendations^[15] on five key elements of the Energy Efficient Scotland programme;

• Quality assurance
• Building a workforce
• Consumer Protection
• Procurement
• Non-domestic sector

Overall, the SLWG felt that there was a need for robust quality assurance criteria under Energy Efficient Scotland, which would require close inspection and the imposition of sanctions on suppliers who failed to meet the criteria. They also felt that the Programme should be based around the skills and competencies of the operatives undertaking the work and that protection of consumers should underpin every element of the Programme. In addition, the SLWG suggested a new designer role should be considered to ensure that a whole building approach is taken and that only the most appropriate improvements are applied.

We also consulted on the SLWG recommendations through the Energy Efficient Scotland: consultation on further development of the programme^[16]. Respondents were asked if they agreed with the recommendations, with around two thirds of correspondents stating they did and many expressing the view that they were thorough and comprehensive.

The consultation also asked questions on ensuring participation of suppliers across all parts of Scotland, as well as on the role of the Scottish Government in ensuring quality criteria are met.

Further analysis of the consultation responses can be seen in the "EES: consultation on further development of the programme: Analysis of responses to the public consultation exercise"^[17].

Since we last consulted, we have made significant progress in relation to skills for the EES Programme, with the minimum skill requirements of suppliers now identified in conjunction with industry. A more comprehensive update on the quality assurance work will be produced next year. We will use your feedback from this consultation and the previous one to inform this work.

Questions:

28. In your view, what are the most important considerations for homeowners who are required to meet the legally-binding standard, in relation to skills, supply chain, consumer protection and quality assurance?

29. What are your views on how the Quality, Skills and Consumer Protection SLWG recommendations specifically have an impact on the owner occupied sector? Please explain.

2.3 Financing the Work

We understand that how to fund the work needed to meet the legally-binding standard will be a key question for homeowners. The overall investment needed to bring all owner occupied homes up to EPC band C is estimated to be in the region of £6 billion. Given that these are private assets, funding this will require a mix of grants, low-cost loans and private investment by the homeowner.

The Scottish Government has been providing financial support to households for a number of years, supporting those living in fuel poverty with grant funding, and providing loan finance to others to make energy efficiency improvements to their properties that reduce their greenhouse gas emissions and save money on their fuel bills.

We propose to continue to focus our grant funding support on those who are most vulnerable and are in fuel poverty. We are committed to meeting the new fuel poverty targets and eliminating fuel poverty as a driver of energy efficiency.

We also plan to continue to make loans available to those who may not be eligible for grants, to help with the upfront cost of works and allow homeowners to unlock the potential energy savings that can come from making energy efficiency improvements, as well as supporting them to meet the legally-binding standard.

We also wish to encourage the private finance sector to expand its range of products for homeowners. A small number of financial institutions already offer financial products that support homeowners to improve the energy efficiency of their homes. This is a relatively new and developing market. We are exploring ways in which we can encourage and support more financial institutions to develop products that will give customers a range of finance options that support them to improve the energy efficiency of their homes.

As an example, the Scottish Government is a member of the Energy Efficient Mortgage Initiative, a pan-European project focussed on bringing together public administrations, banks and finance institutions to support the design and delivery of an energy efficient mortgage that will help householders to meet the cost of energy efficiency measures.

Our current Scottish Government funding programmes which are available to homeowners are described below.

2.3.1 Home Energy Scotland Loan

As well as providing free, impartial advice through HES, the Scottish Government provides interest-free loans helping to spread the cost of making energy efficiency improvements and installing home renewables.

Loan funding of up to £38,500 per home is available to homeowners in Scotland. This covers a range of energy efficiency improvements, including up to £17,500 for home renewables systems or connections to an approved district heating scheme powered by a renewable energy source. The repayment period varies based on the amount borrowed. Those taking out higher value loans will be able to pay them back over 10 years. Since 2017, the HES loan has supported householders to install more than 2,400 energy efficiency improvement measures.

2.3.2 Equity Loans

In 2017, we launched a pilot project offering homeowners in eight local authority areas across Scotland the facility to take out an equity loan to help pay for energy efficiency improvements and specified maintenance activities. The equity loan enables householders to borrow money against the value of their property with the loan being paid back when the property is sold or the last applicant for the loan is deceased. The pilot project will run until March 2020 and we will review the outcomes as part of considering how our loan offers can best support the delivery of Energy Efficient Scotland.

2.3.3 Fuel Poverty support - Warmer Homes Scotland

The Scottish Government provides support to homeowners and private sector tenants living in or at risk of fuel poverty – who have lived in the property for at least 12 months and receive qualifying benefits – to make their home warmer and more affordable to heat by installing a range of energy efficiency measures. This support can be accessed through Home Energy Scotland. To date Warmer Homes Scotland has helped over 17,000 households since it began in September 2015.

2.3.4 Fuel Poverty support - Area Based Schemes

The Scottish Government provides funding for local Councils to deliver energy efficiency schemes to help homeowners and private tenants in areas with high levels of fuel poverty. This includes a wide range of projects, but the main focus is to provide solid wall and cavity wall insulation for `hard to treat' properties (e.g. tenements, 'non-traditional build houses etc.). Typically there is little or no cost for these measures to the householder. Households are only eligible for ABS funding if they are affected by fuel poverty – for example if they are on certain benefits - or on a low income and at risk of cold. Households can also benefit if providing a measure to their property would help other fuel poor households in their block or row (`infill' properties). Since 2013, our Area Based Schemes have helped over 87,000 households.

Questions:

30. In your opinion, is this the right range of Scottish Government financial support schemes? Are there any gaps, regarding either types of financial product or groups of people who may be excluded from being able to access products? Please explain your views.

31. Do you agree or disagree that grant funding from the public purse should be focused on households who are vulnerable or in fuel poverty? Please explain if you disagree.

32. In your opinion, what sources of non-government, private sector support are people most likely to want to access? (eg from banks, building societies, credit unions, mortgage providers)