Heat in Buildings strategy - quality assurance: policy statement

3. Overview

Energy efficiency and microgeneration technologies, including zero-emission heating, are important investments that can result in financial savings, better comfort, and lower carbon emissions, all of which benefit consumers and society as a whole.

Over the past few years, consumers have had to rely on the UK-wide Green Deal Oversight and Registration Body (GD ORB) to find approved suppliers for energy efficiency work. Given the well documented issues^[1] with the quality assurance and consumer protections in place for this scheme, there is a fundamental need for change. For microgeneration technologies, our draft Heat in Buildings Strategy consultation revealed general support for the Microgeneration Certification Scheme; however, there was acknowledgement that improvements could still be made to this scheme.

Quality assurance is critical for achieving our climate change and fuel poverty goals; without it, there is no assurance that the products and systems being installed are appropriate for consumers and buildings, that they are installed to a high standard and that they will achieve the carbon and cost performance that is expected. If necessary, we are willing to go above and beyond the standard UK quality assurance requirements.

In this statement we set out our plans for oversight of quality assurance including quality marks and what this means for consumers, the skills and standards requirements of suppliers, how we will go about dealing with scams and our plans to engage the public on quality assurance more generally including how consumers can clearly and simply access a trusted directory of approved suppliers.

The principles and actions outlined here set-out what the Scottish Government sees as the requirements for a robust and effective quality assurance framework. We recognise, however, that there are no 'one size fits all' solutions and that different approaches to decarbonising buildings will require different quality assurance considerations. We introduce requirements to use TrustMark and maintain our requirement for Microgeneration Certification Scheme (MCS) approvals which will initially apply to our new Home Energy Scotland loans and cash back scheme launched later in 2022. Other support schemes from the Scottish Government will use this statement as a basis for their particular requirements and we will clarify as schemes are developed whether they will adhere to these requirements, use a modified version or whether a different approach to quality assurance is appropriate.

While there are no regulatory requirements to comply with the proposed TrustMark scheme for Scotland or the existing Microgeneration Certification Scheme, we want to see the high standards set out in this statement embedded across the sector to ensure that consumers are supported to the highest standards and the quality of work meets the high expectations required.

Delivering high-quality work comes at a cost to installers, homeowners, and Scottish Government finances, and we strive to keep those costs to a minimum. Depending on the specific needs for each home project, meeting the required standards may incur an additional expense. However, we feel that the value of ensuring the work is completed to high standards and that consumers are protected from rogue operators outweighs this, particularly given the avoidance of potentially high costs of remedial work should there be insufficient quality assurance. The Business and Regulatory Impact Assessment, which will be published to accompany this statement, looks at the balance of costs and expected benefits in more detail.

The actions set out in our Heat in Buildings Strategy have the potential to make a significant economic contribution within Scotland and represent a sizeable opportunity for Scottish businesses. As mentioned in our Strategy, we aim to provide a clear set of signals, including the contents of this Statement, to the market to help to give clarity and confidence to suppliers to invest in the transition to net zero. We have also committed to developing a Supply Chain Delivery Plan.

We will begin implementing the actions listed as a priority as soon as possible and we will also take steps to ensure that consumer groups, industry and other key stakeholders are involved in this policy statement's implementation.

The quality assurance work set-out in this statement must be seen alongside our plans for a new dedicated National Public Energy Agency which will coordinate and scale up delivery of the heat decarbonisation agenda from 2025 onwards. To inform this work we conducted an initial Call for Evidence in February 2022 to inform the on-going design and development of the new Agency, gathering in views on the potential functions of the new body, including Quality Assurance. In recognition of the need and urgency to act now, we are putting in place a virtual Agency by September 2022, which will act as a stepping stone towards the dedicated body.

The role of the Agency in relation to Quality Assurance may extend to, for example: taking an active role in communicating to the public how they can access the required quality standards for energy efficiency and zero emissions heat; and how they can protect themselves, as consumers, from fraud and mis-selling practices alongside partners such as Trading Standards Scotland. The virtual Agency will also lead on a review of the existing delivery, advice and support landscape in Scotland for heat and energy efficiency retrofit. The purpose of this will be to scope out what will be needed moving forward to achieve transformational change and to meet our target for heat decarbonisation of a million homes and equivalent to 50,000 non-domestic properties, by 2030 with quality assurance forming a key part of this.

Defining quality assurance

Quality assurance, in this context, is an overarching term which incorporates all the different elements that make up a framework for ensuring high quality and standards in the implementation of energy efficiency and small-scale renewables work.

The various elements of this include skills, standards, consumer codes and charters, all of which need to be met and adhered to through an approval mechanism or more specifically a quality assurance scheme which measures and enforces compliance and provides adequate redress should things go wrong. Suppliers, including installers, that comply with these quality assurance elements achieve a quality mark that consumers can look out for when choosing who will carry out the work they require.

In considering quality assurance more widely, it is important to emphasise that in general most consumer powers, including legislating for consumer rights and consumer enforcement remain reserved to the UK Government. However, we expect Consumer Scotland will have a leadership role in providing consumer advocacy work in Scotland through powers devolved to the Scottish Parliament in the Scotland Act 2016.

For the domestic energy efficiency and renewable retrofit sector the relationship between skills, standards, consumer codes and charters and quality marks can be summarised in the diagram below.

BSI retrofit standards

In June 2019, the British Standards Institution (BSI) published a new retrofit standard for energy efficiency known as the Publicly Available Specification (PAS) 2035. This was in response to a recommendation for raising retrofit standards following the UK government's review^[2] of the Green Deal scheme in 2016.

This standard covers the entire energy efficiency retrofit process in homes, from initial assessment and design to installation and evaluation and incorporates the updated PAS 2030: 2019 installer standard. Together they are known as PAS 2035/30: 2019.

These standards incorporate a number of well-defined roles for retrofit work including: retrofit coordinator, assessor, designer, installer and evaluator. The standards also cover the competency requirements for these roles.

BSI has also developed a retrofit standard for non-domestic buildings (published as PAS 2038:2021).

We have already committed to adopting PAS 2035/30 for our delivery programmes in our Heat in Buildings Strategy and this statement builds on that commitment. We recognise, however, that concerns have been raised about the applicability of some aspects of the PAS 2035/30 standards in Scotland and this statement commits to the set-up of a technical group to work with BSI and feed into the further development of these or other retrofit standards as appropriate.

Defining energy efficiency and microgeneration measures

The BSI PAS 2035/30 standards covers 41 different energy efficiency measures (EEMs) including internal and external wall insulation, cavity wall insulation, loft insulation, how water cylinder insulation, draft proofing, electric storage heaters and mechanical ventilation and heat recovery.

Microgeneration is covered by the Microgeneration Certification Scheme and refers to micro-renewable technologies used for zero/low carbon generation of heat (up to 45kW) and electricity (up to 50kW). This includes heat pumps, biomass, solar photovoltaics (PV) and wind turbines.

For microgeneration, industry standards have been available for some time and continue to evolve. These standards are provided by the Microgeneration

Certification Scheme (MCS) and although separate from the BSI PAS 2035/30 standards they are referenced within them.

Approvals and quality marks

Until 2019, only the PAS 2030 installer standards were available, with approvals for these handled through the UK government's Green Deal Oversight and Registration Body (GD ORB). Installers meeting the standards and other conditions set by the GD ORB could then use the Green Deal Approved quality mark.

However, this changed following a review of the Green Deal with the new standards (both PAS 2035 and PAS 2030) subsequently integrated into the UK-government endorsed TrustMark quality assurance scheme with Green Deal Approved installers transitioning over. A key driver for TrustMark registration is the GB wide Energy Company Obligation (ECO) scheme which requires suppliers to be TrustMark approved in order to access the funding. Current Scottish Government funded domestic energy efficiency schemes require Green Deal Approved suppliers, but this requirement must be updated as the GD ORB is now effectively obsolete following moves to TrustMark.

The situation with microgeneration is different with both the standards and the approvals being provided through the Microgeneration Certification Scheme (MCS), however businesses including installers, Retrofit Assessors and Retrofit Coordinators must be registered with TrustMark to access ECO and other taxpayer funded, UK government led energy efficiency schemes. Work and financial protection also needs to be lodged into the TrustMark Data Warehouse to allow oversight of retrofit activities.

Both the TrustMark and MCS approval process include requirements for suppliers to sign up and comply with consumer codes and a consumer charter. TrustMark and MCS have a complaints process and specify forms of redress for consumers should things go wrong and we expect these processes to be developed and strengthened over time, The consumer oversight body described later in the document will input into this process. Once a supplier is approved they are able to use the TrustMark and/or the MCS quality mark for their business.

Non-domestic

For Small and Medium Sized Enterprises (SMEs), a level of quality assurance is provided through the support on offer from Business Energy Scotland (BES) administered by Energy Saving Trust (see box below). BES Implementation Advisors help support SMEs to identify and scope measures that would be suitable for their business and help support SMEs to implement their recommendations. BES provide a level of quality assurance by directing SMEs to approved lists managed by relevant trade associations and provide feedback on quotes received for work. However, in order to remain impartial advisors are not be able to provide specific evaluation of quotes for work.

Business Energy Scotland

The Scottish Government's Business Energy Scotland (BES) service provides advice and support to SMEs on energy efficiency and low and zero carbon heating throughout Scotland. This service follows on from the previously available Energy Efficiency Business Support service.

BES provides a substantial free advice and support package to Scottish SMEs to help improve energy efficiency and decarbonise heating in their premises. The two main offers of support are an initial 'energy opportunities' assessment to identify where and how savings can be made and a comprehensive report including a potential site visit to highlight possible improvements and sources of funding.

SMEs contacting the service are allocated an advisor to help them work through the options available to them. Depending on the type of business and their willingness and potential to take action on reducing their cost and carbon emissions they are either offered initial advice and further self-help support resources and tools or where there is good potential for savings the service of a BES Development Officer. They will make either a desk-based or - where appropriate - detailed site assessment of the options available to the SME. They will then work with the SME to support them to access finance, installers and to complete the installation.

Using a mix of specialist one-to-one telephone support and a range of online tools and resources, the service offers free and impartial advice and support to SMEs to reduce their energy use and costs as well as cutting carbon. The service also encourages business to finance the installation of sustainable energy measures through applications to the Scottish Government's SME loan and cashback scheme, which offers up to £100k to support implementation of carbon-saving measures such as renewable heating and insulation, with up to £20k cashback available in some instances.

SMEs can visit Business Energy Scotland to find out more.

For larger businesses above the SME scale, information, support and guidance is provided through the Energy Saving Opportunity Scheme (ESOS) which is a mandatory energy assessment scheme for organisations in the UK that meet the qualification criteria. The Environment Agency is the UK scheme administrator with the Scottish Environment Protection Agency (SEPA) being the regulator for organisations whose registered office is in Scotland. Further information can be found on the ESOS guidance webpage.