Low Carbon Scotland - meeting the emissions reduction targets 2010-2022: report

4. Homes and Communities

4.1 Since emissions from domestic electricity use are part of the traded sector, emissions from the residential sector as measured in the Net Scottish Emissions Account result almost exclusively from combustion of fuel for heating and cooking. Even without electricity, the residential sector contributed 14% of total emissions in 2008. The main way of reducing these direct emissions from homes is through preventing heat loss, increasing the efficiency of heating systems, using energy intelligently, and by substituting renewable fuel sources for fossil fuels such as gas and coal.

4.2 The Energy Efficiency Action Plan ⁵⁹ describes the Government's action to improve the energy efficiency of the residential sector and encourage energy efficient behaviour. This chapter summarises UK and Scottish measures and their impact on Scottish emissions. Households are set to benefit financially from many of these measures, which ultimately pay back their costs through reducing energy bills.

Trends in domestic emissions and energy use

• Direct (non-electricity) residential emissions in 2008 were 7.6 MtCO ₂e, higher than in 2006 and 2007 but still 0.2 MtCO ₂e lower than in 1990. Emissions in this sector are volatile as they depend heavily on weather conditions, but there has been a general downwards trend since 2000.
• An ambitious implementation of all the proposals in this chapter, including renewable heat, could result in emissions of 5.0 MtCO ₂e.

Milestones in 2020

4.3 A range of energy efficiency measures, including low carbon equipment and solid wall insulation, will need to be installed in many of Scotland's homes by 2020. Milestones include:

• every home to have loft and cavity wall insulation, where this is cost-effective and technically feasible, plus simple measures such as draught-proofing and pipe lagging;
• every home heated with gas central heating to have a highly efficient boiler with appropriate controls; and
• at least 100,000 homes to have adopted some form of individual or community renewable heat technology for space and/or water heating.

The Energy Efficiency Action Plan

4.4 Emissions attributable to housing derive almost entirely from the use of energy for heating, lighting, cooking and electrical appliances. In October 2010 Scottish Ministers published the Energy Efficiency Action Plan, which includes details of their policies for reducing energy use and emissions from homes. This section summarises briefly the broad policies at UK and Scottish level.

UK policies

4.5 There is already a wide range of policies and programmes at UK, Scottish and local level that provide support, incentives, finance and funding to improve energy efficiency in existing housing.

4.6 Funding for domestic energy efficiency improvements is dominated by the supplier obligation, which requires gas and electricity suppliers to achieve emissions reduction through installing energy saving measures in people's homes, with a focus on low income/'priority group' households. The supplier obligation is a reserved policy and its most recent incarnation is the Carbon Emissions Reduction Target ( CERT), which will continue in its current form until the end of 2012. More recently, the smaller scale Community Energy Saving Package ( CESP) pilot programme has begun. Under this scheme suppliers provide a range of energy efficiency measures to properties in low income neighbourhoods as part of area-based, whole house approaches. This scheme will also run until 2012.

4.7 The supplier obligation has tended to under-deliver in terms of measures provided in Scotland's homes. This is because of a range of factors such as the characteristics of Scotland's housing stock and its rurality leading to higher costs required to reach some households. The Scottish Government is working with energy companies as part of the CERT Strategy Group to maximise the level of investment in Scotland and is also monitoring the investment closely to ensure that Scotland receives its fair share. The area-based insulation and energy efficiency programmes described in paragraphs 4.11 and 4.12 are designed to interact with CERT to maximise investment levels. Similarly, the Scottish Government is working with the UK Government on the development of the Energy Company Obligation, which will replace CERT in 2012, to ensure that Scottish-specific circumstances are considered in its design.

4.8 The previous UK Government committed to installing "smart" meters for gas and electricity in every home by 2020. This type of meter is able to display real-time information about energy use and costs, thereby encouraging better household energy management. The UK Government and Ofgem published a Smart Metering Implementation Programme Prospectus ⁶⁰ on 27 July 2010 which sets out proposals and asks for views on a range of issues including rollout. It is expected the first UK installation will take place in 2012 and that energy suppliers will be responsible for installing meters.

4.9 As well as reducing emissions through reducing the energy used by households, the remaining emissions can be reduced still further by using heat produced from renewable or low carbon sources such as woodfuel or heat pumps. The Renewable Heat Incentive ( RHI) is due to be introduced during 2011 and is described in Chapter 3: Energy Supply.

Scottish policies

Existing housing

4.10 The Scottish Government promotes up-take of energy efficiency measures through support for the regional Energy Saving Scotland Advice Centres, which also assist in the delivery of a range of Scottish Government Home Energy Schemes.

4.11 Area-based insulation and energy efficiency programmes are one approach to helping to maximise take-up of measures and achieve economies of scale by delivery in targeted areas. The Scottish Government is supporting area-based schemes offering free or low cost insulation measures to 500,000 households to help them save money, tackle fuel poverty and combat climate change. This includes a new universal-access area-based scheme that is supporting 27 projects delivered by local councils across Scotland.

4.12 As well as reducing emissions, energy efficiency measures can also mitigate fuel poverty. The Government's Energy Assistance Package ( EAP) focuses on energy efficiency improvements for the fuel poor to reduce the amount they need to spend on fuel. The EAP can provide energy efficiency advice, basic insulation measures that are wholly or partially funded by energy suppliers, as well as more expensive measures such as replacement boilers and central heating systems, and advanced measures such as solid wall insulation and air source heat pumps for hard-to-treat homes. Taken together, in 2009-10, the Scottish Government's Home Energy Schemes provided 11,502 heating systems and 26,110 insulation measures.

4.13 Through its Energy Saving Scotland Advice Centres the Scottish Government funded a boiler scrappage scheme in 2010-11 to incentivise the early replacement of the least efficient (G-rated) boilers, and the Energy Saving Scotland Home Loan Pilot, giving interest-free loans for energy efficiency works.

New housing

4.14 More than half a million new dwellings could be constructed between now and 2050, making up 20% of all homes in 2050. These homes need to be as energy efficient and low carbon as practicable.

4.15 New energy standards for new homes came into force in October 2010. These revisions deliver a 30% reduction in CO ₂ emissions from new dwellings when compared to 2007 standards, and around 70% compared to the standards that existed in 1990. Revisions include:

• a 10-20% improvement in the minimum energy performance of the building fabric;
• improved efficiencies for space heating and hot water;
• an expanded role for Low Carbon Equipment (such as heat pumps and solar hot water) to contribute towards the delivery of CO ₂ savings;
• a reduction in the level of uncontrolled air infiltration coupled with the introduction of random air-tightness testing; and

• a greater percentage of low energy lighting.

4.16 The Scottish Government recognises the need to provide more effective means of demonstrating that compliance with regulations is being achieved. In support of this the 2010 building regulations introduce both noise testing and air-tightness testing for new buildings. A consultation on improving compliance with building regulations was carried out in 2009 ⁶¹ and work to progress this agenda is ongoing, including further consideration of tools such as post-completion testing and certification schemes.

4.17 As shown in Table 3, current UK and Scottish policies are expected to result in a total of 0.7 MtCO ₂e of abatement in 2020.

UK proposals

The Green Deal

4.18 The UK Government has committed to supporting home energy efficiency improvements by developing a Green Deal. Under this market-driven scheme households will receive energy efficiency measures from participating providers and will pay back the costs over time through the savings they make on their energy bills. The scheme will be linked to the household meter rather than the householder so that the person who benefits from the savings will pay for the measure. It could bring an unprecedented amount of private investment to Scotland for energy efficiency measures. The Green Deal will be underpinned by the new Energy Company Obligation post-2012 to replace the current CERT scheme, and is expected to focus on fuel poverty and hard-to-treat houses.

4.19 The Scottish Government is working closely with the UK Government on the UK Energy Bill. The Bill encompasses legislation that will allow the Green Deal to be rolled out throughout the UK and allow long term repayment to be made through a charge on a home's energy meter. It will also include proposals for the Energy Company Obligation. The Scottish Government is working with the UK Government on the Bill to reach an agreement on proposals which would allow the Green Deal to be delivered in Scotland in a manner that reflects Scottish circumstances and maximise the benefits available to Scottish households, meeting the aims of the Energy Efficiency Action Plan.

Scottish proposals

Housing policy paper - Homes Fit for the 21st Century

4.20 The Scottish Government published the housing policy paper, Homes Fit for the 21st Century ⁶² , in February 2011. Against a challenging background of sustained and substantial cuts to public spending, the paper sets out a radical agenda and vision for housing over the next decade. Recognising the contribution of improved design and energy efficiency of housing to our emissions reduction and energy efficiency targets, it commits to the promotion of energy efficiency across all tenures, working with partners to boost the green industries in Scotland, and ensuring that UK-wide and Scottish Government funding schemes are effectively targeted. The paper announces that a Strategy for Sustainable Housing in Scotland will be developed in 2012. This will bring together our policies - on climate change, energy efficiency, fuel poverty and planning and the built environment - that contribute to the development of sustainable housing and communities.

Fuel poverty and insulation programmes

4.21 National and area-based schemes, or other approaches, will be required to maximise the take-up of basic insulation measures and tackle fuel poverty, drawing in funding from UK Government schemes and other sources. Scottish Government energy efficiency programmes such as the Home Insulation Scheme ( HIS) and EAP are designed to interact strongly with UK policies such as CERT to seek to ensure that Scotland receives its fair share of investment, and recent data indicates that progress is being made on this front. Given pressure on public finances, this will continue to be a priority and the Scottish Government will seek to maximise funding from UK, European and other funding sources.

4.22 The Scottish Government will use its influence to seek to ensure that reserved policies such as Green Deal and the Energy Company Obligation are set up from the start in a way that will deliver for Scotland in both the domestic and non-domestic sectors. We will support such UK policies with our own programmes where required, and we are making a good start by continuing the successful EAP and Universal Home Insulation Scheme ( UHIS) programmes †. UHIS will offer help to 200,000 households in 2011-12, and EAP will help an estimated 70,000 fuel poor households. We will look to maximise the impact of all our programmes in this area to ensure that they join up as effectively as possible, building on the success of the Home Energy Scotland hotline.

4.23 Consumers could save an estimated £2.6 billion on their energy bills between 2011 and 2022 as a result of energy efficiency measures in existing homes, compared to the "business as usual" scenario. At current fuel prices, Scottish households would save on average £192 per year if all proposals were implemented. Many of these measures are long-lived, meaning that savings would continue to accrue after 2022.

4.24 We will need to consider the implications of the major reforms to energy efficiency policies post-2012 that the UK Government is developing to ensure that our programmes to alleviate fuel poverty and promote home insulation continue to maximise the uptake of all potential sources of funding. Our analysis assumes that the Energy Company Obligation will be put in place beyond the current Spending Review period and this may require further adjustments to our programmes in future.

New-build domestic energy standards for 2013

4.25 Domestic building standards will be reviewed again for 2013, with the intention of improving them further, looking at the Sullivan report recommendation for a 60% reduction in emissions compared to 2007. Improvements of this magnitude are likely to require significant changes to building practices. The review will examine the most efficient and effective way of reducing emissions and energy use, through passive techniques and improved building fabric, and also through more efficient services, use of renewables and low carbon technology. The Scottish Government is currently undertaking research into the cost of implementing the Sullivan Report ⁶³ recommendation for 2013 as well as the manner in which future building standards targets should be set, to better recognise and encourage inherently energy efficient design. This work also forms a platform for subsequent review programmed for 2016 (the Sullivan Report recommending net zero carbon buildings by 2016-17, if practical).

4.26 These techniques were well demonstrated by homes at Scotland's Housing Expo ⁶⁴ held in Inverness in August 2010 which considered masterplanning, lifestyle, passive energy techniques and new building technology jointly to demonstrate a way forward on low carbon building design. These homes were designed to tight cost limits, some with predicted annual heating costs of less than £100, including one type with costs as low as £47. The recent design competition for the Whitecross Scottish Sustainable Communities Initiative project ⁶⁵ is another demonstration of this integrated approach. The focus of the competition was on realisable, sustainable designs. The Scottish Government is reviewing the achievements of the Expo and the Whitecross competition to establish what it can do in partnership with others to provide further practical support to the development of low-carbon building design and construction skills.

Overall abatement from policies and proposals for Homes and Communities

• As shown in Table 3 and Table 4, an ambitious implementation of all the proposals set out above could result in an abatement in 2020 of 0.4 MtCO ₂e, giving a total abatement of 1.1 MtCO ₂e from all proposals and policies in the residential sector compared to the baseline.s

• Residential emissions would be 5.0 MtCO ₂e in 2020, 36% lower than in 1990.

Supporting and enabling measures

Behaviour change

4.27 A step change in the material energy efficiency of homes will not in itself reduce emissions from housing to a level consistent with emissions targets. Significant reductions also require a change in the way householders use energy. Advanced heating controls must be used intelligently to ensure that well-insulated rooms are not heated when unoccupied and that the rooms being used do not become overheated to the point where the occupiers open the window to let the heat out.

4.28 The Energy Efficiency Action Plan sets out in general terms the Scottish Government's approach to encouraging low carbon behaviour. Scottish Ministers published their Public Engagement Strategy in December 2010 which describes the main actions that individuals can take to make a significant reduction in their energy use and emissions.

4.29 The Scottish Government currently funds the Energy Saving Scotland Advice Centre ( ESSAC) network as its principal channel for providing advice and information to individuals and small businesses on energy efficiency, water efficiency, microgeneration and renewables. ESSACs are also responsible for delivery of SG programmes including HIS and EAP, the boiler scrappage scheme, home loans and renewables grants. It is expected that they will also be used to deliver independent advice on the Green Deal when it becomes operational in 2012.

4.30 Beyond simple changes to habits, a change in the attitudes and expectations of individuals could also provide a social motivation for improving property. The Energy Efficiency Action Plan sets out that, "we want to reach a position where potential tenants and purchasers demand an energy efficient home as a matter of course".

4.31 Much work is also going into raising awareness of the financial benefits of installing energy efficiency measures. This supports the Government's principle that those who are able to pay should invest or borrow to undertake improvements, as in most cases they will benefit financially over the long term.

Local Housing Strategies

4.32 Guidance is being prepared jointly by the Scottish Government and COSLA to provide advice to local authorities on how to address climate change in their Local Housing Strategies. This will help them meet the duties they have as public bodies under the Climate Change (Scotland) Act 2009; set out the financial and other resources available to assist them; and identify sources of technical information and advice. Local Housing Strategies are the key strategic planning document for housing and related issues and as such have an important role to play in setting out how emissions and energy consumption from housing will be reduced and establishing climate change as a mainstream issue for housing.

Rented housing

4.33 The Scottish Government has been working with private landlords to encourage them to take up the wide range of incentive schemes for energy efficiency measures. Alongside schemes directed specifically at improving energy efficiency, such as the Landlord's Energy Saving Allowance, which allows private landlords to claim a tax allowance of up to £1,500 per property for fitting energy efficiency measures, there are also schemes which incorporate energy efficiency as an ancillary consideration.

4.34 In the social rented sector, all landlords have to meet the Scottish Housing Quality Standard ( SHQS) by 2015. One of the five elements of the SHQS is that houses are energy efficient, though landlords will need to go beyond those requirements if the 2020 target is to be met. The Scottish Government will work with stakeholders to develop a new regulated standard beyond 2015 so as to achieve further reductions in emissions. The new standard and supporting guidance will be issued in 2012 to enable landlords to plan effectively for implementation by 2020 and the financial sustainability of social landlords will be a key consideration. The Scottish Government will publish guidance shortly to help landlords target their implementation of SHQS investment activity effectively. This guidance, developed after consultations with landlords and the Scottish Housing Regulator, will provide opportunities for landlords to save up to £1 billion from their budgeted costs. In addition, the new regulated standard beyond SHQS will be developed with regard to available funding from Scottish Government, UK and energy company sources as well as, potentially, drawing on European funding sources such as JESSICA ⁶⁶ .

Traditional and hard to treat buildings

4.35 Many of the Government's current programmes focus on delivering high take-up of the most cost-effective energy efficiency measures, such as loft and cavity wall insulation. There is recognition, however, that many Scottish homes present additional challenges for installing energy efficiency measures, particularly those of historic and traditional construction or in rural areas off the gas grid. For example, households in the areas targeted by our area-based insulation schemes can access interest-free loans for more expensive energy efficiency measures, which may assist owners of these hard-to-treat properties. Going forward, the Scottish Government will seek to ensure that UK Government policies, such as the Energy Company Obligation, are designed in a way that recognises the distinct nature of our housing stock.

4.36 As announced in the Energy Efficiency Action Plan, Historic Scotland is undertaking pilot projects to improve energy efficiency in a range of historic and traditionally built houses and tenements with intention of providing technical guidance about how properties could be improved.

Building standards for existing buildings

4.37 The 2010 energy standards apply when owners elect to carry out new work on their existing property. These standards are applicable irrespective of tenure and ensure that the existing stock becomes more energy efficient when such work occurs.

4.38 Improved energy efficiency requirements have applied since October 2010 to extensions, conservatories, conversions and alterations, as well as replacement boilers, windows, and doors. There is an option for owners extending their property either to upgrade the energy performance of the building fabric of their existing home or to further improve the fabric of the extension. How these standards apply to existing homes will be reviewed for 2013.

Energy Performance of Buildings Directive

4.39 Assessment of the energy performance of housing also takes place through the production of Energy Performance Certificates ( EPC), which are required for any new dwelling and upon sale or rental of existing dwellings. The EPC includes advice on low cost measures that could improve the energy efficiency of the building, which the owner can choose to implement. When a building is sold, the EPC must be accompanied by an energy report which provides further information and advice.

Regulation

4.40 Since 1 April 2009, the tolerable standard (which all houses must meet) has included a requirement for satisfactory thermal insulation. This means that all houses which are capable of having loft insulation must have it. Where this is not the case, local authorities have powers to require owners to take action to bring properties up to the tolerable standard.

4.41 The Climate Change (Scotland) Act requires Ministers to introduce regulations that will require the assessment of the energy performance of houses and, where necessary, recommend improvements that must be made to properties. The Government is exploring options for regulation and Scottish Ministers will publish a report by the end of March 2011 setting out their approach. The Scottish Government will support and encourage people to take up energy efficiency measures, with incentives where possible and appropriate. However, regulatory measures may be necessary to require action where advice and support have been unsuccessful.

Community and small-scale renewables

4.42 Small-scale renewables and micro-generation have a part to play in reducing reliance on electricity generation from fossil fuels. Through its Energy Saving Scotland Home Renewables Scheme, the Scottish Government has supported over 3,800 grants to householders to install microgeneration technologies. At the UK level, the framework for funding such installations began a new phase in April 2010 with the introduction of Feed-in Tariffs ( FIT) by the UK Government, whereby owners of micro-generation equipment receive payments for the energy they generate. This is considered (under state aid rules) to remove the need for grant support for the installation of microgeneration. The Scottish Government will seek to maximise FIT investment in Scotland which could stimulate up to 75,000 new installations by 2020. The Scottish Government is currently considering options with the Energy Saving Trust ( EST) for funding domestic renewables in 2011-12. This will include reviewing the Home Renewables scheme and considering options for future support in this area.

4.43 In recent years the Scottish Government has made various schemes available to communities for the installation of small-scale renewable energy generation, such as the Communities and Renewable Energy Scheme ( CARES), delivered by Community Energy Scotland. As a result of CARES, over 600 groups are benefiting from £13.5 million of funding for technical assistance and for the capital costs of projects. The Government remains committed to driving local ownership of energy and in doing so, securing wider community benefits. Building on the success of CARES, in September the Scottish Government published a feasibility study to look into early stage financing for renewables projects, carried out by the Scottish Agricultural College in conjunction with Community Energy Scotland ⁶⁷ . The study considered the initial business case for a loan fund for communities and landowners to cover pre-planning costs. Following consideration of the report's findings, from April 2011 a new Community and Renewable Energy Loan Fund will be established to provide loans for the high risk pre-planning stage of developing a renewables project.

4.44 The Scottish Government is working with the Scottish Federation of Housing Associations to scope out the potential for a programme of retrofitting renewables on their members' housing stock. The Government is also investigating the most efficient way of supporting this activity including attracting appropriate loan funding.

4.45 In compliance with section 70 of the Climate Change (Scotland) Act 2009, the Scottish Government introduced secondary legislation to extend permitted development rights for micro-generation technology for domestic buildings ⁶⁸ , which came into force in March 2010. The Scottish Government has consulted on extending this legislation further ⁶⁹ and published an analysis of consultation responses ⁷⁰ , and is currently also addressing microgeneration in non-domestic properties following the conclusion of a further consultation ⁷¹ .

4.46 In addition, under section 72 of the Climate Change (Scotland) Act 2009 local development plans must require all new buildings to operate low and zero carbon generating technologies. Scottish Planning Policy recommends that development plan policies for development involving low and zero carbon generating technologies should accord with the standards, guidance and methodologies provided in building regulations.

Sustainable places

4.47 A low carbon housing strategy must go beyond considering buildings as individual units and look at them in their wider setting. For example, a zero-carbon house in a remote setting where occupants must use a car for their daily needs will probably not result in an overall reduction in emissions. Limited improvements to the efficiency of tenement buildings may be more beneficial than isolated low carbon houses if they are situated in dense urban areas where people are more likely to walk or cycle around their neighbourhood. Scottish Planning Policy seeks patterns of development which reduce travel demand and energy consumption, and are easier to access by public transport and active travel. In addition, Chapter 6 describes a proposal for developing "community hubs" for remote working in small rural settlements to reduce the need for people to travel to towns and cities.

4.48 Section 72 of the Climate Change (Scotland) Act amended planning legislation to require planning authorities to include policies in their local development plans to "ensure that all new buildings avoid a specified and rising proportion of the projected greenhouse gas emissions from their use". By 1 April 2011 Scottish Ministers are to lay before Parliament the first annual report on the operation of the requirements of section 72, which should include an assessment of whether they have contributed effectively to the reduction of greenhouse gas emissions from developments.

4.49 The supporting and enabling measures described above are summarised in Table 5.

Climate Challenge Fund

4.50 The £27.4 million Climate Challenge Fund (2008-11) was established to empower communities across Scotland to come forward with their own solutions to make a significant reduction in carbon emissions. This challenge to date has been taken up by 261 communities who led projects involving a range of actions, from using less energy, walking and cycling more, to local sustainable food. The CCF scheme evaluation is scheduled for publication in June 2011 and along with detailed feedback from communities and others, including project final reports, many positive ideas should be available for sharing to enhance the future performance of communities looking to reduce their carbon emissions.

Costs and benefits

4.51 The up-front cost of implementing housing energy efficiency measures post- CERT at the scale envisaged is estimated to be around £2.9 billion to 2022 ⁷² . Most of these costs will be met by consumers, either through the supplier obligation, Green Deal or self-financed measures, with targeted action from Scottish Government to support uptake.

4.52 There are significant benefits alongside these costs. Consumers would save an estimated £2.6 billion on their energy bills between 2011 and 2022 as a result of energy efficiency measures in existing homes, compared to the "business as usual" scenario. At current fuel prices, Scottish households would save on average £192 per year if all proposals were implemented. Many of these measures are long-lived, meaning that savings would continue to accrue after 2022. The CCC estimated that insulation and other energy efficiency measures could lift around 150,000 households out of fuel poverty, even after increases in electricity and gas prices, improving the health and wellbeing of many people.

4.53 The cost of rolling out smart metering to households will be met by consumers through their energy bills. The Impact Assessment ⁷³ for this programme showed that the financial benefits of better energy management far outweigh the costs in all scenarios.

4.54 The 2010 energy standards for new homes will cost an estimated £1.4 billion between 2011 and 2022, with the price being met by the buyers. New building standards in 2013 are likely to increase this cost further. However, the costs to householders of heating new homes will be far less than for homes built under previous standards.

4.55 Although not covered in detail here, efficient use of electricity will reduce the amount of renewable generation needed to meet Scotland's 80% target. In broad terms, this means there will less need to build wind turbines in less windy areas where less of a return is made on the investment, or further out at sea where it is more expensive to build them. In the long run this will help keep electricity costs down, another key benefit of energy efficiency.

The need for greater powers

4.56 The main responsibilities in energy policy and regulation of energy suppliers are reserved to Westminster. The transfer of greater regulatory powers to Scotland would ensure that energy policy and regulations were better aligned to deliver the annual emissions targets.

4.57 Regarding energy efficiency, the Scottish Government has called upon the UK Government to:

• legislate to ensure that Scotland receives its fair share of investment in energy efficiency measures through the supplier obligation;
• give powers to the Scottish Government to enable it to direct and co-ordinate this activity through a body of its choice which has a clear understanding of Scotland's needs;
• recognise the variation in Scotland's climate and housing types that has caused the supplier obligation to under-deliver in Scotland, and ensure that proposals for the Green Deal reflect Scottish circumstances and maximise the benefits available to Scottish households; and

• as part of that, provide a greater level of incentive under the supplier obligation for loft insulation top-ups.

4.58 These changes would help to guarantee that new energy efficiency investment includes Scotland's rural and island communities and to ensure the accurate, disaggregated and regular reporting of energy efficiency-related activity in Scotland.

Table 3: Policies for reducing emissions from Homes and Communities

Policy package and description	EU, UK or Scottish policy?	Expected abatement (ktCO 2e) in 2020	Further information available from
Smart Metering and Better Billing 'Smart' meters are to be installed in every home by 2020 to encourage better household energy management.	UK	75	Department of Energy and Climate Change website: http://www.decc.gov.uk/en/content/ cms/what_we_do/consumers/smart_meters/
Domestic Energy Efficiency		160
The Carbon Emissions Reduction Target ( CERT) obligates gas and electricity suppliers to achieve emission savings by installing energy saving measures in people's homes, with a focus on low income/'priority group' households.	UK		Energy Saving Trust website: http://www.energysavingtrust.org.uk/ Easy-ways-to-stop-wasting-energy/ Energy-saving-grants-and-offers/ Carbon-cuts-get-serious-with- CERT
The Community Energy Saving Programme ( CESP) Energy is a UK pilot programme under which suppliers provide a range of energy efficiency measures to domestic consumers in low income areas.	UK		Department of Energy and Climate Change website: http://www.decc.gov.uk/en/ content/cms/what_we_do/ consumers/saving_energy/cesp/cesp.aspx
The Energy Assistance Package ( EAP) is a four stage package of advice and upgrades for the least energy efficient/most fuel poor homes, supported by Scottish Government investment and accessing funding from CERT.	Scottish		Scottish Government website: http://www.scotland.gov.uk/Topics/Built-Environment/Housing/warmhomes/eap
The Home Insulation Scheme ( HIS) is a Scottish area-based scheme promoting and installing insulation and other energy saving measures, supported by Scottish Government and CERT funding. The Universal Home Insulation Scheme has similar aims is delivered by local councils and provides measures free of charge to households.	Scottish		Scottish Government website: http://www.scotland.gov.uk/Topics/Built-Environment/Housing/warmhomes/uhis
New Domestic Buildings		132
New-build domestic energy standards for 2007 and for 2010 Homes built to 2007 standards have emissions 18-25% lower than those built to 2002 standards. Homes built to 2010 standards will have emissions 30% lower than those built to 2007 standards.	Scottish		Scottish Government website: http://www.scotland.gov.uk/Topics/ Built-Environment/Building/Building-standards
Renewable Heat Incentive New UK policy offering payments to those who install and obtain heat from renewable sources.	UK	318	Department of Energy and Climate Change website: http://www.decc.gov.uk/en/content/ cms/what_we_do/uk_supply/energy_mix/ renewable/policy/renewable_heat/incentive/incentive.aspx
TOTAL ABATEMENT FROM HOMES AND COMMUNITIES POLICIES		685

Table 4: Proposals for reducing emissions from Homes and Communities

	Maximum abatement potential (ktCO 2e) in 2020	Total financial cost (2011-22, £m, cash terms)	Cost-effective-ness (£/tCO 2e abated)	Earliest start date	Options for implementation
Fuel poverty and insulation programmes National and area-based schemes or other approaches to maximise take-up of insulation measures and tackle fuel poverty, drawing-in funding from UK Government and other sources. Will take into account arrangements for post-2012 supplier obligations and Green Deal. Assumes continuing Energy Company Obligation in place beyond current Spending Review period.	321	2,832	Not available	2011-12	Scottish Government approaches will seek to maximise funding from all sources, and will consider the implications of major changes to policy introduced by the UK Government including revised Energy Company Obligation and the Green Deal.
New-build domestic energy standards for 2013 Domestic building standards will be reviewed again for 2013, with the intention of improving them further to achieve a 60% reduction in emissions compared to 2007.	92	Not yet quantified	Not available	2013	Policy would be implemented through the existing system of building regulations. Likely to result in increased development cost for new homes.
TOTAL ABATEMENT POTENTIAL FROM HOMES AND COMMUNITIES PROPOSALS	413

Table 5: Supporting and enabling measures for reducing emissions from Homes and Communities

Policy package and description	EU, UK or Scottish policy?	Policy or proposal?	Further information available from
Regulation of energy efficiency in existing housing The Climate Change (Scotland) Act introduced wide ranging enabling powers to introduce requirements to assess the energy performance of houses and to require action to be taken based on these assessments. Such regulation may be required to underpin emissions savings from proposals for fuel poverty and insulation programmes.	Scottish	Proposal	Energy Efficiency Action Plan sets out Scottish Government's development of options for regulation: http://www.scotland.gov.uk/ Topics/Business-Industry/ Energy/Action/energy-efficiency-policy/ ActionPlan
Domestic Energy Efficiency
Energy Saving Scotland Advice Centre ( ESSAC) network Scottish Government currently funds the ESSAC network to provide advice and information to individuals and small businesses on energy efficiency, water efficiency, microgeneration and renewables, and they are also responsible for deliver programmes including HIS and EAP.	Scottish	Policy	Energy Saving Trust website: http://www.energysavingtrust.org.uk/ scotland/Scotland-Welcome-page/ Help-and-advice/Energy-Saving-Scotland-advice-centres
Local Housing Strategies Scottish Government will produce joint guidance with COSLA on local authority coverage of climate change in Local Housing Strategies.	Scottish	Policy	Energy Efficiency Action Plan, section C2: http://www.scotland.gov.uk/Topics/ Business-Industry/Energy/Action/ energy-efficiency-policy/ActionPlan
Landlords' Energy Saving Allowance ( LESA) Allows landlords to claim a tax allowance of up to £1,500 per property for energy efficiency measures fitted.	UK	Policy	Her Majesty's Revenue and Customs website: http://www.hmrc.gov.uk/manuals/ pimmanual/pim2072.htm
Energy Performance of Buildings Directive New dwellings and existing dwellings on sale or rental must produce an Energy Performance Certificate ( EPC) which assesses their energy performance. EPCs allow comparison of performance between dwellings and offer advice on cost-effective energy efficiency measures.	EU/ UK	Policy	Scottish Government website: http://www.scotland.gov.uk/ Topics/Built-Environment/ Building/Building-standards/profinfo/epcintro
Tolerable Standard Local authorities have power to make owners in houses below tolerable standards to repair and maintain their properties; requires loft insulation (where possible).	Scottish	Policy	Implementing the Housing (Scotland) Act 2006, Parts 1 and 2: http://www.scotland.gov.uk/ Publications/2009/03/25154751/0
Domestic Energy Efficiency
Reducing emissions from social housing Work planned with social landlords and other stakeholders to consider how best to make emissions reductions from social housing, including, to develop an energy efficiency standard beyond the Scottish Housing Quality Standard.	Scottish	Proposal	Scottish Government website: http://www.scotland.gov.uk/Topics/Built-Environment/Housing/16342/shqs
Loans to landlords Private landlords can access Energy Saving Scotland Small Business loans to install energy efficiency measures.	Scottish	Policy	Energy Saving Trust Scotland website: http://www.energysavingtrust.org.uk/ scotland/Scotland-Welcome-page/ Business-and-Public-Sector-in-Scotland/ Grants-loans-awards/Small-business-loans
Historic Scotland Climate Change Communications Pilot projects to improve energy efficiency in a selection of historic buildings with intention of providing technical guidance about how properties could be improved.	Scottish	Policy	Energy Efficiency Action Plan, section C2: http://www.scotland.gov.uk/ Topics/Business-Industry/Energy/Action/energy-efficiency-policy/ActionPlan
Climate Challenge Fund Fund empowering communities to come up with their own projects for reducing emissions.	Scottish	Policy	Scottish Government website: http://www.scotland.gov.uk/ Topics/Environment/climatechange/ ClimateChallengeFund