Green Heat Finance Taskforce: report part 1 - November 2023

7. Next Steps

This Part 1 Taskforce Report aims to stimulate discussion around how best to develop the range of financing options that we see as being important in delivering the significant transformation of heating in buildings that will be necessary to achieve the Scottish Government’s Net Zero targets. It offers analysis of the current situation and commentary on the measures which could help increase the demand for retrofitting, along with providing recommendations to support scaling of financial products to service the increase in demand for energy efficiency and ZDEH systems that will be required over the second half of the decade and beyond.

Our hope is that, by stimulating discussion around energy efficiency and ZDEH measures, and, in particular, how to scale the financing of these, this report can help raise understanding of the changes that will be necessary for all buildings over the next 20 years. We also hope it will help start to build an awareness of the role of different public and private organisations, as well as that of individuals.

This Taskforce will continue working towards publishing a Part 2 Report in 2024. The main focus of our Part 2 Report will be place-based mechanisms and larger scale financing options for energy efficiency and ZDEH systems. Our Part 2 Report will cover retrofitting finance options for social housing, area-based mechanisms, including district heating, neighbourhood financing mechanisms, the potential of municipal bonds, quasi equity-based funding, aggregation financing, as well as heat as a service models.

Our Part 2 Report will also explore the potential interactions between issues discussed in this report, for example, the potential for co-investment (blended finance) models to contribute to social housing retrofit programmes. In doing so, it will also reflect on all the conclusions emerging from the Taskforce’s work, and we will offer our views on priorities and next steps arising from the recommendations we make, with a view to help focus early action where it has the greatest opportunity to generate a positive impact.

Finally, an important aim of this Taskforce is to continue our ongoing engagement with stakeholders in the market, as well as maintaining existing relationships across organisations and building new partnerships. These will all be important in creating the environment for products and services to be successfully piloted, scaled-up and delivered over the coming months and years.

The Taskforce recognises that others will have expertise and views on the issues covered in this report and we would welcome opportunities to explore these with you. Should you have any comments, questions or wish to discuss points covered in this report further, then please contact: greenheatfinancetaskforce@gov.scot

Any views received will provide the Taskforce with the opportunity to reflect further on these issues in advance of our Part 2 Report. This might include highlighting any tools that could help develop the products we have discussed, or examples of effective mechanisms being trialled, which we could consider in a Scottish context.