Net zero heating and energy efficiency standards - phase 1 and 2: qualitative research

4. Results

This section outlines the key findings from the twenty focus groups. The results have been broken down into four sections:

• Awareness of, and attitudes towards, net zero – the section presents the participants' views on:
  • Net zero concept
  • Heat pumps and alternative heating technologies
  • Homeowners' journey to net zero
• Scenario specific learnings – the section presents the participants' attitudes towards:
  • Scenario 1 – change of occupancy
  • Scenario 2 – backstop dates
  • Scenario 3 – Boiler breakdown
• Phasing – the section summarises the different potential phasing approaches to implement the proposed regulations.
• Support needed – the section outlines the support required to meet the proposed regulations.

Many views were unanimous among participants regardless of their income, property type and other demographic characteristics. Where there are differences, these are discussed within each section.

4.1. Awareness of, and attitudes toward net zero

4.1.1. Net zero concept

All participants within the focus groups had heard of the concept of net zero, as it is a term that they often hear in the media or mentioned by brands. However, many didn't understand precisely what it means for them at an individual level and how it can be reached in practice.

"Yeah, I'm aware of it, and I think I've got a rough understanding of what it means. Would probably struggle to describe it accurately, but I think I roughly know what it means" [Phase 2, Group 6, male, 18-45, Grampian, maisonette]

"How and when that's being implemented is a million-dollar question" (Answer to the moderator's question: "how do we feel about the government's [net zero] commitment by 2045?") [Phase 1, Group 7, female, Highlands & Islands, semi-detached house]

Participants said that reaching net zero is an aspirational goal and there was a lot of positivity and goodwill in the focus groups around creating and meeting the net zero targets. Almost all understood that net zero is important to help combat climate change and again, almost all have accepted the fact that things do need to change to combat climate change and that legislation is important:

"I think it is a good thing that they are being that ambitious. […] If it is going to cost more money- it is something that in the future I am willing to pay more towards because it is the elongation of life on this planet. I think it is a positive thing, but we just need more info on how it is going to happen" [Phase 2, Group 4, female, 18-45, Edinburgh, in the process of getting a mortgage]

In addition, many were made more aware of net zero due to COP26 being held in Glasgow in 2021:

"I think obviously what is going on in the world- the long-term impact is going to be very severe in terms of the environment- so, I think it definitely enhanced my education last year when we had the conference in terms of the potential impact for our kids in the future- in terms of the impact it could have on from different aspects of our environment which can impact us in many ways. I think we do need to take it seriously as a society. So yeah, it is definitely high on the agenda now- more so than ever." [Phase 1, Group 10, male, 46-75, landlord]

4.1.2. Concerns about how the targets will be achieved

Even though participants were generally positive towards tackling climate change and reaching net zero, there are concerns about how, and if, the targets will be achieved:

• There was scepticism and mistrust among the participants that targets are rarely achieved by the government and that the government is not leading by example, for example some social housing properties are still using expensive storage heaters. Participants had questions around how the net zero target will be any different to previous targets that the government did not meet or met late, and they said they need to be able to see real tangible action.

  "I know people that are in social housing now that still have storage heaters, so it's kind of like, I feel sorry for them, because ... you shouldn't have the most expensive heating in social housing. So, I would want to know how much effort is going to be put into achieving net zero. Because that's great, and it's a great objective to have, but how feasible is it?" [Phase 2, Group 2, female, 18-45, Glasgow, flat]

  "I don't have a lot of faith really in what they say, they say a lot of things, and then that government changes, and it's all that previous government's fault. It's been that way forever" [Phase 2, Group 2, female, 46-75, Glasgow, detached house]

  In addition, there was scepticism around how effective renewable energy is and if we can actually use the renewable energy produced in the UK to reduce the impact of climate change:

  "I think there's a lot of things that people have been told "yeah, go for this and this will be better" and the grid can't even, companies are getting money paid to them switching off the wind turbines because the grid can't handle it. So, it's like, you know all this kind of stuff you're thinking the infrastructure's not there to absorb the energy that's getting produced. And you know, they're getting paid money to actually switch off the turbines" [Phase 1, Group 1, male, 46-75, Elderslie, bungalow]

• For participants, achieving net zero doesn't feel like an individual problem, although most participants accepted that they must play some part in this. There was anxiety around how the net zero targets will impact people financially and there was a view that this should be tackled by the government, big businesses and industry, not individual homeowners who can't afford to make changes. This attitude was particularly prevalent in the financially vulnerable groups, with many feeling that it shouldn't be them that has to make changes, but it was a view widely shared by participants across different socioeconomic groups.

  "You hear a lot of people speaking about it and they are putting a lot to individuals rather than going for industry and bigger corporations to stop what they are doing to stop putting things into the environment. It is fair enough - you need to target individuals as well - but to me you have got to deal with the bigger problem first which I think is industry - maybe transport - but definitely industry and larger corporations…" [Phase 1, Group 3, male, 46-75, Glasgow, flat]

• Questions were raised around how feasible meeting the net zero target is and what level of investment is required to make this happen, for example, changes to infrastructure, upheaval to properties and the feasibility of implementation across different properties e.g. flats.

  "In Edinburgh, it is a lot of tenement flats and there are conservation areas - say you want to upgrade a building, but you are not allowed to put double glazing in, but it has got to be sash windows- which is just not going to benefit anyone. So, there are restrictions in place and regulations that restrict it. It is ambitious and there are other ways…. Maybe in suburbs, heat pumps can be put in houses, but I don't really know how tenement flats are going to do that" [Phase 2, Group 4, male, 18-45, Edinburgh, currently renting – planning to buy in the next 6 months]

• There was a strong desire from all groups to see tangible evidence of cost savings as well as contribution to net zero:

  "All these wind turbines they're supposedly working off, but our energy bills are still crazy. Like unless we see it reflected in our bills then it's hard to see that is actually happening" [Phase 2, Group 3, male, 28-45, Renfrewshire, semi-detached house]

• Participants identified that education is key for people to understand why these changes are necessary and, for some participants, this education needs to start with young minds in schools:

  "I'm a teacher of science in high school, and it would be good if the government would maybe provide us with more resources, you know, to do that. Furnish us with materials and information, things like that […] like almost sort of a mandatory course. Like we do deliver something about global warming, climate change. I'm a chemist, so I obviously talk about global pollution and things like that. However, it's not a mandatory part of the course. And I think that that would be a good thing. Obviously, to get young people involved in it. ….. It should be mandatory." [Phase 2, Group 3, female, 46-75, Inverclyde, terraced house]

4.1.3. Heat pumps and alternative heating technologies

In order to gain an understanding of participants' views on some of the changes needed, they were asked whether they were aware of heat pumps and what they do. Overall, awareness and knowledge of heat pumps was minimal with most not knowing even the very basics, such as, what they are, what they do, what they look like, and where they go.

Where participants had some knowledge of heat pumps, there were concerns that they would not work in the Scottish climate, or in certain property types such as flats. Other participants said that what they had heard was mainly negative. Perceptions of heat pumps amongst participants included:

• 'They have a high cost to install'. Most participants were unaware of the costs of installation and were shocked when told a ballpark figure (£9-11k). Currently, they feel that the technology is unaffordable for them:

  "I think with that it all comes down to the cost. The cost is quite vast compared to a boiler to getting a heat source pump put in. The help that you get from the government and the programmes and that- they are not that much." [Phase 1, Group 3, male, 46-75, Glasgow, detached house]

• 'There was a need for additional work to be completed for the heat pump to work efficiently which adds further cost'. Participants were generally unaware that heat pumps cannot just be connected in place of their boiler:

  "There's a lot of considerations you need to look at, even thinking about installing air source, the type of property, your insulation which is key to that if that technology is going to work, because if you're not sufficiently insulated it's not going to work for you, I'd heard all the horror stories as well, components failing, parts having to be replaced for thousands of pounds, for a relatively new system, lack of expertise, especially in the earlier years." [Phase 1, Group 7, male, 18-45, Western Isle, detached house]

• 'They are ineffective or less effective than conventional heating and hot water systems'. Participants had heard mixed reviews on how well heat pumps work. There was a concern that, if the technology is good and works, they would be hearing more about them being used. Participants expect to see all new builds installing them first and they need to see more information about how they work to give them confidence that they can actually heat their homes:

  "My uncle's got one, a heat pump, he got the boiler taken out and got a heat pump, it's been a few months now, but it seems to be not generating enough or not in the terms that he wants. Slightly less than a boiler." Steve [Phase 1, Group 4, male, 46-75, Edinburgh, semi-detached house]

Before participants could develop a more informed opinion on the regulations there were a series of clarifications they required about zero-emissions heating:

• how does it work?
• how much will it cost?
• how long will the new heating system last?
• will it be cheaper upfront?
• will it be cheaper in the long run?
• will I be able to get replacement parts/a repair done on this device?
• are there enough installers who are trained in these new systems? This was particularly a concern for those living in rural communities who already struggle with these things on 'standard' heating systems.

4.1.4. Homeowners' journey to net zero

In the second phase of research, to provide some additional context, the participants were shown an illustration of some of the steps a homeowner can follow to prepare their homes to become energy efficient and switch to a zero-emissions heating system in the future. The journey presented is the following:

Step 1: Increasing awareness of energy use/costs and understanding the need to take action towards achieving net zero, eg, smart meter installation, low carbon fuel usage, controlling /zoning heating, usage of more energy-efficient appliances.

Step 2: No/low cost/easy fix upgrades to reduce heat loss in the home, eg draught proofing, hot water cylinder insulation etc.

Step 3: More significant heating insulation measures, eg installation of double glazed windows, cavity wall insulation, roof and loft insulation etc.

Step 4: Renewable technologies, eg heat pump installation, solar panels installation.

The research showed that breaking down this complicated task into smaller, more manageable phases helps to raise awareness of what needs to be considered and informs those who are less knowledgeable or less proactive in making changes. Being able to plan and have a feeling of control over the process was comforting for most participants.

"It is scary, but I think it's helpful. It informs people who are perhaps not aware, or for people who couldn't give a monkey's. People that have never heard of energy efficiency, there are people like that. So yes, you need to make people more aware" [Phase 2, Group 2, female, 46-75, Glasgow, detached house]

For participants further down the journey, the earlier stages did not feel so scary or immediately onerous and costly. These participants said it is reassuring that they are further along the journey and have made many of these changes already. On the contrary, first-time buyers were generally at an early stage in the journey since either they cannot afford to make the changes, or they do not have a sufficient incentive as most said that they will not live in their current property for very long, so they will not see the return on any investment.

Even though the journey was positively perceived, it raised some questions and concerns:

• Cost: there was anxiety around the cost of investment in these new technologies and the role the government can play in supporting homeowners in their efforts.
• Feasibility: there was scepticism around renewable technologies in general with many homeowners questioning the feasibility of using these technologies in their everyday lives/homes: Do they really save you money? Does the huge investment really pay off?
• Future-proofing: homeowners were concerned about how relevant these technologies will be in the long run and how quickly they will become outdated or redundant: Is it really worth investing? When is the best time to invest to get the maximum pay off?

The participants were all seeking reassurance and clear evidence that will outline the benefits of moving through the stages and reaching stage 4. It was suggested that case studies can bring this journey to life, showcasing people in similar circumstances to the participants that have successfully reached later stages than them.

"Clear evidence that it works. What's it going to do? Install it somewhere, run it for a year, and then see the bills, let's see how that worked" [Phase 2, Group 2, female, 46-75, Glasgow, detached house]

4.1.5. Differences by groups

Those more active on this journey or that have already started taking more significant steps were more aware of EPC ratings in general. Some spontaneously questioned whether there would be tax incentives for reaching a higher EPC rating.

Amongst the older participants, there was a general lack of knowledge and more skepticism around change and new technologies. Many said they feel too old to live through another round of cost and disruption and to make this significant investment in new technologies from their pensions.

"I suppose I could get solar panels, but I don't think I've got enough life left in me to be doing that one" [Phase 2, Group 2, female, 46-75, Glasgow, detached house]

The financially vulnerable groups emphasised how unequal it is that the more vulnerable homeowners like themselves have to take on the financial burden of moving through these stages. They said that they are asked to take on huge financial responsibility to reach higher stages of the journey whereas those in social housing or council properties are not^[5]:

"It's only fair if we're all in it together. It's not a great divide if, you're a homeowner and you can afford it. Because a lot of homeowners can't. I can't afford that thing at the bottom no matter if I am a homeowner or not" [Phase 2, Group 2, female, 46-75, Glasgow, detached house]

First-time/new buyers focused on the financial burden of those who have gone through the home buying journey recently or for the first time. These participants said that they are hesitant to invest in renewable technologies as the benefit is unclear and they don't expect to live in their current property for a very long time.

"It's like renewable technologies and you are going to have solar panels on your roof- how much is that actually going to save you a month? You know, with inflation and everything, just seeing what the actual impact on you and everybody else is…" [Phase 2, Group 4, female, 18-45, Edinburgh, in the process of getting a mortgage]

4.2. Scenario specific learnings

Three possible scenarios of how new regulations could come into force were presented to each group:

• scenario 1 – change of occupancy
• scenario 2 – backstop dates
• scenario 3 – heating system breakdown

This section outlines the key points raised by participants when discussing the different scenarios.

4.2.1. Scenario 1 – change of occupancy

In the first scenario, any home changing ownership would be required to meet a minimum energy efficiency standard and have a zero-emissions heating system installed. This would mean that, when a home is sold, the buyer of the property would be required to carry out the necessary energy efficiency improvements and zero-emissions heating installation within two years of the property being sold.

The overall reaction to this scenario was fairly negative, with participants viewing it as unfair and difficult to achieve. There were three main points that participants mentioned for this scenario: fairness, timeframe and financing:

4.2.1.1. Fairness

The first reaction from participants was that putting the onus on the buyer is unfair. Many, particularly younger participants, said that the seller would be more likely to be able to afford to make the changes since they already own a property. Participants raised the question of whether there could be exemptions for certain types of people where this would have the biggest impact:

"Could you have exempt groups or – I think first time buyers should definitely be exempt from regulations like that but let's just say it could be means tested, there are people buying homes to rent out, I would have no difficulty.…if people buying homes to rent out have to invest this kind of money… because they are going to be earning money from it anyway. And there are other people who are selling to buy an improved property but have the means to do it. So, I can see that there's opportunities to this as long as we take out the most vulnerable in the community." [Phase 1, Group 7, male, 46-75, Western Isle, detached croft house]

Even though there was a sense that buyers are being penalised in this scenario because the regulation raises the bar for property ownership, many recognised that putting the burden on the seller is challenging as well as people may be forced to sell for financial reasons.

Even though the scenario was mostly seen as unfair, there were participants that approached it from a positive point of view. They said that it is potentially a more 'natural' way of rolling out change since the updated properties become more valuable. Most also recognise that this buying-selling scenario is cyclical and fair overall as buyers become sellers of the future.

"At the end of the day, it's the seller that's going to be a buyer anyway so it doesn't matter what way, because they're going to have to do it where they're going. It will take years to revolve round so that everyone had got it done" [Phase 2, Group 2, female, 46-75, Glasgow, flat]

"I don't know if it has to be set in stone. It could be either. It could be part of the negotiation of the sale- because somebody, you know, it could prompt people to buy a property because it had been done and because people had done it. It could be either" [Phase 2, Group 4, female, 46-75, Edinburgh, currently owning a flat and looking to buy a property with a garden in the next 6 months]

In addition, these participants assumed that the investment cost could be subsumed within the cost of (re)mortgage or within the Land and Buildings Transaction Tax. They also saw potential if the sellers offset the cost of investment by using an increased selling price – in this case, the scenario feels fair for the sellers too if they choose to invest in this technology.

"A zero-emissions heating installation, it would be like stamp duty really. You pay the stamp duty. You have to pay for the – if it's not already installed. I guess" [Phase 2, Group 3, female, 46-75, Glasgow, terraced house]

Some participants commented that the regulations could be introduced based on the value of a property to be fair for everyone:

"The value of the property perhaps. So, like someone that pays a 100 grand mortgage to someone who pays a 400 grand mortgage – I'm not saying that everyone's like – but if everybody could afford 400 thousand pound homes then we'd be in 400 thousand pound homes" [Phase 2, Group 3, male, 18-45, Renfrewshire, terraced house]

4.2.1.2. Timeframe

The scenario posed a 2-year timeframe for buyers to undertake the work. This was considered difficult to achieve by many. As with the unfairness point, expecting financially vulnerable people and first-time buyers to have that money available within two years was considered highly unlikely as the purchase of the property would most likely take up all their savings.

"I think from my perspective my son would never have been able to squeeze any more money after he bought his house- absolutely not fair- he wouldn't have been able to. He would have to continue to rent." [Phase 1, Group 8, female, 46-75, Scottish borders, semi-detached house]

Another concern with the 2-year timeframe mentioned by those living in rural areas (Highlands and Islands) was that it might be difficult to get the work completed within two years. With shortages of workmen and parts on remote islands, some participants perceived it to be unfair to put a two-year timeframe on this. Five years was suggested as a better length of time (with a caveat that people buying properties to sell within five years would have these changes made before selling again).

4.2.1.3. Financing

Financing was an issue raised by all participants. Participants queried how they would be expected to afford to make these changes and what funding would be available to support them since there is a significant cost to bear after buying a property. Financing was an issue raised for all scenarios and so it is discussed in more detail in section 4.4.1, but specific quotes mentioned when talking about this scenario include:

"If the government would cover the whole thing, 'this is what we are going to do, this is what we are going to do for homeowners to make their houses greener, we're going to give you an incentive of 75% of what you put in, and they you'll make up a small amount'. But it's never like that, it's always they put in the small amount, and we put in the big amount which again is not the fairest." [Phase 1, Group 1, male, 46-75, Glasgow, flat]

Other participants suggested ways that could make it more achievable:

"It would work if there was some kind of consensus on it, like if it was part of the mortgage, I would be willing to pay as a responsibility as part of my mortgage if it was incentivised, because we all have to take some kind of responsibility." [Phase 1, Group 1, female, 18-45, Glasgow, flat]

"What about an equity loan on the property? If it was on the buyer's side, the buyer could take an equity loan from the government… there would be a massive waiting list if it (loans, cashback, vouchers etc) was to come into place, but if you took the equity loan then it would be simpler." [Phase 1, Group 5, male, 18-45, Edinburgh, flat]

One issue linked to cost raised specifically for this scenario was the potential impact on the housing market. There was a mix of views with some anticipating a positive impact whilst others thought it would have a negative impact. One view was that people won't want to buy properties where the investment needed is too significant and this could lead to market stagnation and some homes falling into a state of disrepair or becoming unsellable. Participants said that this would push more people into new build properties which many thought were in short supply and could thereby impact the price of these homes. This was likened to having EPC certificates and those that have a poorer EPC rating being more difficult to sell:

"If you're selling a house, [you need a] Energy Performance Certificate, even selling the existing houses without all these new regulations, there is a hurdle. People are not buying and selling because it is a certificate showing [a rating]… so the buyer is saying why should I buy yours I'll buy hers. This will be totally disastrous." [Phase 1, Group 1, male, 46-75, Glasgow, detached house]

On the contrary, those who thought it could have a positive impact on the market said that it could potentially bring down the cost of properties where investment is needed, thereby making it cheaper for buyers (notwithstanding the costs required to bring properties up to the required standard).

"I think it is quite good actually, because the property market now where people are going 10-15% over the asking price… I think it might maybe calm down the property market to stop people doing it so much… whether people would stop and take into account whether they were going to have to pay 9-11 grand on this new heat pump. I think it'd actually be good to be honest with you because it'd stop property market values going sky high." [Phase 1, Group 5, male, 18-45, Edinburgh, flat]

4.2.1.4. Vulnerable groups

First-time buyers/potential buyers found this scenario to be very unfair and they were most vocally against it. They said the proposed regulation would impact many young people's ability to buy a property considering the significant investment that is needed after buying. These participants said that more information is required as to exactly how the regulation would work in practice and financial support/ additional borrowing and other guidance are expected to help first-time buyers/potential buyers in their effort to comply with the proposed regulation.

"Well I guess from my perspective- I am going to be a first-time buyer and thinking about the tax you have to pay and all that stuff you just have to have in your pocket and then thinking I am going to have to carry out all of these… Why isn't it the seller that has to do all of these?" [Phase 2, Group 4, female, 18-45, Edinburgh, in the process of getting a mortgage]

The first-time buyers/potential buyers particularly suggested that the seller should be the one responsible for making the changes to the property before selling. In this case, the context of who is selling and who is buying is considered important as well: is it a developer, a house builder, an individual?

"I think it just depends on every single context of who is buying and who is selling. Is it a massive landlord who is just buying tons of properties? How much do they have in the bank to do it compared to a first-time buyer? It is completely contextual" [Phase 2, Group 4, female, 18-45, Edinburgh, in the process of getting a mortgage]

On the other end of the property market, older homeowners/pensioners said that they would find it challenging to access loans or have savings in place to make the changes. Older homeowners who have already paid off their mortgages were also mentioned as a vulnerable group: "why is it fair they have this burden when they have spent a lifetime investing in their properties?".

"There's one, two, three older people here …you're working on a pension. And you want to keep what you've got, if you've got any savings, not for stuff like that" [Phase 2, Group 2, female, 46-75, Glasgow, detached house]

"People in their late 40's, early 50's wanting to downsize – they probably had a mortgage and paid it off – now they're either going to have to take on a new mortgage or hope that they've got enough equity to go onto this" [Phase 2, Group 2, female, 46-75, Glasgow, flat]

An area of fairness raised was how fair this scenario is for those living in flats. There was a concern that this would make it more expensive for flat owners and make the process more complex for them as well:

"It would have to be agreed through a meeting. I think if you'd want to be fair [you would have] to have a contract and an agreement, shared out between everybody but [that would take time] because you have to go through every individual household." [Phase 1, Group 1, male, 46-75, Glasgow, flat]

"How does it work in a flat? Do you have to ask someone to put it against their building and then in their garden? How would that work I've got no idea." [Phase 1, Group 9, female 18-45, East Lothian, flat]

4.2.2. Scenario 2 – backstop dates

In this scenario, the regulations would set the following deadlines for property owners to carry out certain energy efficiency improvements and zero emissions heating system installations.

a) By the end of 2033, all properties should meet a certain level of energy efficiency, including a good level of insulation and draught-proofing.

b) By the end of 2045, all properties should be using a zero-emission heating system.

Overall, participants found this scenario to be the most equitable and fair as it gives homeowners the space and time to make the necessary changes. Participants said that it is a scenario that feels more 'on their terms' and within their control and sets a clear target to work towards.

"Sounds like plenty of time to plan and say how to get there. It sounds less threatening. It sounds less to an immediate change of ownership one [scenario 1]" [Phase 2, Group 7, male, 18-45, Highlands & Islands, semi-detached house]

The first point in this scenario (2033 - certain levels of energy efficiency must be met) was seen as more acceptable than scenario 1. Participants said it was more flexible and achievable as they would be more in control of when to make the changes and not forced to make them at a specific point, such as, following the purchase of a property. The timescale also felt comfortable for the majority of participants.

"I think this is better than the last one [scenario 1] because the onus is on the property owner, if he wants a better house or I don't know something. I think it should be their responsibility to make sure the house is energy efficient and ready and by those dates it could be doable." [Phase 1, Group 2, female, 18-45, Glasgow, semi-detached house]

The second point (2045 – zero-emissions heating system) was divisive, with some participants reporting that 2045 is too far in the future and more action is needed before then, whilst others said that it is achievable and it gives plenty of time for change. Some of the older participants questioned whether it's worth them doing it and spending the money when they may not be living in the property by that point anyway.

"If it is a genuine crisis, it's far too far away and I would probably [say]……. it should just be more transformational." [Phase 1, Group 7, male, 46-75, Western Isle, detached croft house]

"I think it is a bit of a while away- if you are maybe thinking I don't know if I am making it to 2045 you might think aye, I'm not going to bother myself." [Phase 1, Group 5, male, 18-45, Edinburgh, maisonette]

The phased approach to this scenario was well received because it breaks down the targets and makes them more achievable and possible to plan and save for.

"It seems to be a lot more reasonable than the previous one! Maybe it is just the length of time sort of thing. But yeah, certain level of energy efficiency…, I think that seems a lot fairer." [Phase 1, Group 8, female, 46-75, Scottish borders, terraced house]

There were, however, questions and concerns about what might happen in practice:

1. Will this drive up the costs of materials, for example, for insulation?

Participants were concerned that having a date by which these improvements need to be done by everyone, will increase the costs of doing the work as installers, manufacturers and retailers will put up their prices to capitalise on demand.

2. Will there be support available for those that cannot afford to make these changes?

The overall cost of making the changes was seen as restrictive by many and there was an expectation that there would be financial support available for them to do so.

"The first part I don't have a problem with at all- but 2045? The way prices are going up now… Later on in 2045 I just don't see that, as the guy before said [those on low incomes] there is no way that they are going to be able to afford to take these things in. Even households with a lot of kids, pets- all that is quite expensive now already- so trying to buy something like that at a later stage as well is going to be a fair financial problem for you." [Phase 1, Group 6, male, 46-75, Grampian, flat]

There were questions from participants about how regulations would be enforced but they didn't have many views themselves on how enforcement should be done. Some reference was made to the fire alarm law change brought in in February 2022^[6]. Every home in Scotland must now have interlinked fire alarms and, in some cases, home insurance is invalid if properties are not compliant.

"If somebody is in a house already, they've no intention to sell, then who is making sure that their home meets that criteria?" [Phase 1, Group 7, female, 46-75, Western Isle detached]

"…Or you have a fire, and your insurance doesn't pay out, that's a more realistic way [of ensuring compliance]." [Phase 1, Group 9, female, 18-45, East Lothian, flat]

Owners of old or listed buildings often thought that they had done as much as they could within their property and so said there would need to be exemptions for those properties that cannot do any more.

"I think just coming from an old tenement it is quite hard because …. how much can you change buildings- if you can't change windows or you can't do that…it feels challenging – the state of some of the tenements [would make it difficult and expensive to upgrade to what is required]." [Phase 1, Group 5, female, 18-45, Edinburgh, flat]

4.2.2.1. Vulnerable groups

Financially vulnerable: Most participants expect financially vulnerable groups to be protected/exempt or receive some kind of allowance eg single people/single occupancy; those on universal credit etc. However, most participants believed that the vulnerable groups will be financially supported to achieve the targets.

4.2.3. Scenario 3 – Boiler breakdown

The third scenario is for the regulations to apply at the point of boiler breakdown. In this scenario, the regulations would state that, when an existing boiler breaks down beyond repair, the property owners would be required to replace it with a zero-emissions heating system, like an air source heat pump. They would not be permitted to install another gas boiler.

This was considered the most extreme scenario and the least fair option out of the three, as it forces homeowners to make a change outside their control at a point of crisis – many participants didn't like the idea of the government dictating what they can and can't do to their own property as well. Taking away the choice was seen as unfair in the event of an emergency replacement as new systems would not be at the forefront of their mind thereby adding additional stress to the situation. This concern was based on the following two issues^[7]:

• New technology: there were concerns about the participants' lack of awareness of zero-emissions heating and having to install it when the participants felt that it is still untested. Trying to understand a new technology at a point where they just need to get a working heating system did not feel fair:

  "What if you've got elderly in the house or people that are unwell, you know you need confidence that it's going to work and it's not going to break down. I mean I don't know much about it in a lot of respects." [Phase 1, Group 9, female, 18-45, East Lothian, flat]

• Cost: they were critical of additional costs of both the installation and any associated works that need to be undertaken at the same time. This was likely to be exacerbated in this scenario as people may not have been able to plan and save for this happening if they were not expecting their heating system to break down.

  "That has given me palpations right now! I know that I am going to be in that situation. I have not much in savings, but I am going to have to go into that savings to take that, or I am going to have to go to my building society. I've paid my mortgage off. I'm going to have to go in and say "I'm now 70, but my boiler has knackered and I'm going to have to put one of these in… Can you give me however much it is to pay for that against my house?" [Phase 1, Group 3, female, 46-75, Paisley, semi-detached]

Participants also raised questions around 'what is the point of beyond repair' and commented that this may cause people to continue to use boilers that may not be safe. If many homeowners cannot afford the high replacement cost, there may end up being a black market for boilers where they are sold even though they shouldn't be:

"The other risk to doing something like this is, let's be honest, gas boilers can be dangerous when they start to go wrong, I mean I had no idea mine was as damaged inside as it was until the guy came when he was changing our radiator in the kitchen. Now what's going to happen is people are not going to service their boilers because they are going to be petrified that somebody condemns [it]and then they are going to have to pay 15 grand or whatever it is to put a heat source pump in. Or they are going to get a backstreet boy to bodge it so that it keeps going and the risk to that with gas is really high." [Phase 1, Group 9, female, 18-45, East Lothian, flat]

Most participants, regardless of their income background, believe that there will be a huge disruption to their property and overwhelming costs involved as instead of only replacing, they will have to buy brand new heating systems. Some also questioned the feasibility of making this happen as 'it is not as simple as replacing a like–for–like boiler' and mentioned that there will be limited ability to access if in flats.

"I don't know because I don't know how much heat-pumps cost, but I presume they are more expensive than a gas boiler – so I just thought that people who are already in a pretty bad situation you've got no heating or hot water because your boiler has gone- and then you maybe have only got just enough money to get that replaced, how are you going to stump up the extra cash to fit a heat pump when you have got no heating and hot water…" [Phase 2, Group 5, female, 18-45, Edinburgh, flat]

In addition, some participants mentioned that there will be no time to do research and assess costs at the point of breakdown which is both daunting and has the potential to increase total costs as there will be no fair assessment/comparison of options. It also raises questions about what else needs to happen in their property to allow new systems to function well e.g. insulation. Finally, most questioned how this will be enforced and monitored.

"I don't know how you would regulate it either. You could just pay a boiler guy cash to just fit a new boiler…" [Phase 2, Group 4, male, 18-45, Edinburgh, currently renting – planning to buy in the next 6 months]

4.2.3.1. Vulnerable groups

All participants were able to project the impact this scenario would have on more vulnerable groups such as younger families, low-income families, medically dependent etc.

Younger homeowners were more concerned about the financial impact, as most had never put in a new boiler and had limited understanding of this process. Prospective buyers found this more difficult to discuss as this is not something most of them had ever had to deal with and it was difficult for them to project how they thought this could impact them.

Financially vulnerable groups were the only ones that saw this scenario as a viable option. Changing their boiler is a significant outlay they have to plan for, sometimes years in advance, so this feels the least wasteful option when it is a change they will need to make anyway. The biggest concerns for this group are the feasibility and disruption caused in flats and how this might impact communal bills/factor bills in flats.

"I think scenario three, if it breaks down [the boiler] and you really have no other option than to do something, if there's an incentive, I could argue that could help […] Because we're governed by the gas prices. And that's where it comes in. I think maybe it would be worth splitting it, making the gas independent and the electricity independent. If that's the case, then our electricity wouldn't be as bad a cost as it is currently. We are governed by the gas at the minute. So that would be scenario three, providing it was more cost effective then it would be all right. You've got to do something anyway. I mean I would have done it no bother, I would have done the electric boiler. My friend's got it, she put it in her flat because she has all electrics she thought it would be all right, but now her nails are down to the quick" [Phase 2, Group 2, female, 46-75, Glasgow, flat]

4.3. Phasing

In the second phase of research, we explored how the proposed regulations could be brought in through a phased approach rather than all households being required to comply at the same time. Participants were asked for their thoughts on what would be the fairest way of doing this and who should go first. It was a challenging topic causing a lot of debate in the groups with interesting insights around the 'fairest route' forward and who should be the 'first' to be enforced to change.

Two main barriers were identified that would need to be addressed before a fair phasing assessment could be made:

• An individual's ability to access financial support (government grants or loans).
  • Participants suggested that the more vulnerable groups should only be asked to 'go first' if they are financially supported to make these changes.
• The ability to access expertise (new technologies & technicians/engineers) to practically implement these changes.
  • Participants suggested that those living in flats cannot be asked to go first if there are practical issues/barriers to putting in heat pumps.

4.3.1. 'Going first'

'Going first' was perceived to be the riskiest/least desirable option for most homeowners because:

• It is currently prohibitively expensive compared to the current alternatives. Some participants asked if heat pumps will be cheaper over time: "when is the 'tipping point' when they become good value?".
• The technology is new: most know (or assume) there are teething problems with the new technology and that it will take time to test, optimise and adapt fully. Homeowners emphasised that they want to know if heat pumps will work effectively in properties like theirs.

Most felt the government should lead by example by 'going first' in council houses and public buildings and providing the benchmark for others to achieve. There is a clear opportunity for the Scottish Government here to build a case for why making the change is beneficial to homeowners.

Participants also mentioned that alongside the government, the new build properties and properties belonging to landlords (rented accommodation) should lead the way:

• New builds should lead by example by having the most innovative specification installed. According to the participants: 'what is the point of building a new property if it is not up to the highest energy efficiency standards?'
• Properties belonging to landlords since regulations usually impact them first eg. fire alarms.

4.3.2. Who should go next?

The debate around 'who is it fair to follow the leaders' came down to two key elements:

• Environmental impact:
  • biggest 'polluters' causing the highest level of environmental damage should go next or
  • those who are furthest along the journey eg new builds, higher EPC-rated homes should comply first given they are the easiest wins.
• Resilience to pay (the ability of a homeowner to afford to make the changes): participants mentioned that those who are financially able to make the changes should go next.

When individually assessing where they fit on the phasing scale, most participants assigned themselves to the middle of the scale – not the leaders/risk-takers but not necessarily the neediest or vulnerable.

4.3.3. 'Going last'

Those in vulnerable circumstances eg low income, single-parent families, older adults etc. should be the last ones required to comply with the regulations. However, these groups could go first if they are financially supported by the government to do so because improving their EPC and having more efficient houses would benefit them the most.

Figure 1 shows the phasing approach discussed above:

4.3.4. Geography

Geography has a role to play in terms of how the phasing can be practically rolled out, but this was not a key criterion used to assess the level of fairness by the participants. The majority assumed that urban locations would be the easiest and most impactful to phase in first, with more rural /remote locations being the most challenging /having the lowest impact to go last. Most assumed that phasing would be done strategically across different council areas.

The different phasing approaches created in each focus group of research phase 2 are presented in the Appendix.

4.4. Support needed

There is a wide range of factors that will influence Scottish households' ability to adapt to new policies and play a key role in the transition to net zero. They will need to understand the potential impact of climate change and why governments have declared a climate emergency. They will need to understand that it is vital to decarbonise domestic homes and understand and have confidence in the different technologies that will need to be installed to achieve this – a key part of this will be understanding the associated cost implications and impact on energy consumption. Finally, they will also need to understand the implications of the different policy and regulatory instruments that may be introduced.

In order to understand how to best help participants accept any new regulations, they were asked about the support they would need to help them with the various scenarios. The support required is consistent across all three scenarios and covers two main areas:

• Funding/support for the cost of complying with regulations – the cost of making any changes to their properties is a significant barrier to all, regardless of their current financial situation. The ongoing cost of living crisis has impacted most households in a very significant way. Energy plays a significant role in this crisis and there is uncertainty around whether this situation will improve. Participants feel that to achieve the requirements of the scenarios financial help is not only needed but also expected and should be prioritised. However, this is not enough:
• Education and communication for all – accessible information is needed for the entire retrofit process that the regulations call for. The need to change won't be accepted or understood unless they start to hear more about net zero, what it means for them and what they and others need to do much more widely. They are unlikely to look at this proactively themselves without it being more visible in their everyday lives. They are all looking for clear benefits and savings to encourage behaviour change and overcome the fear factor.

4.4.1. Funding/support for the cost of complying with regulations

One of the biggest concerns around how the targets will be met and how individually the participants will be able to meet the requirements is the cost. All participants wanted to know how this would be funded when they do not have the ability to fund these – there is an understanding that the cost will be very high. Participants perceived that grants and funding are currently declining rather than increasing. There were four main considerations around cost:

1. Understanding what the costs are for complying with regulations - participants said that there is a lot of misinformation and confusion surrounding the costs. In some groups, people mentioned numbers such as £20,000 for a new heating system. People do not know where these numbers are coming from, but they generally remember the higher costs they hear or read about. More education is needed to fill these gaps and reduce misinformation which can be harmful to the overall interest in the changes necessary for net zero.

2. Linked to understanding what the actual costs are, there was a concern that deadlines could significantly increase the costs of any new heating systems or energy efficiency work due to the increase in demand. Participants referred to new fire alarm rules and the impact that had on the cost of fire alarms.

"I was on amazon every day checking the prices [of fire alarms] and they were going up." [Phase 1, Group 5, male, 18-45, Edinburgh, maisonette]

3. Understanding what the (cost) benefit is to them - a key question that needs to be addressed is whether switching to net zero technologies (particularly for heating the home) will cost them money or save them money - will this be cheaper than their current systems? The expectation is that changes will be expensive, and they will be out of pocket and the benefit to them is not clear. Those who are financially vulnerable are looking for reassurance on the practical implication of installing these new systems, mostly focused on the cost-value equation (running costs, cost of parts/maintenance, lifespan, impact on home insurance costs, disruption to existing infrastructure pipes or gardens etc).

4. Ability to afford the changes - participants were concerned about the financial implications of these changes. Everyone is currently feeling the effects of the cost of living crisis. There was a general sense that it's the wrong time/hard time to discuss this topic given the financial pressures on everyone and most feeling 'beaten down'. There was concern over how many (particularly the least well-off) will even be able to afford energy with the increasing prices. The idea of investing in net zero in the future was very challenging for many, and whilst this was felt most strongly by those considered to be financially vulnerable it was a concern for all regardless of affluence or life stage. Participants need reassurance that support will be available to those who need it. For those that had already made some changes, they mentioned having grants available made the changes more affordable and would help to save them money.

"Again, it is still putting it onto the homeowner. It wouldn't be so bad if mortgage companies for example are going to allow people to borrow more. For example, when I bought my house they were only doing 90% mortgages, but I think they are doing 100% mortgages now… Years ago they were doing 110% 120% mortgages and if you are buying a house and need to put in this heat source that is fine if you are getting a 110% mortgage and the extra money is being spent on putting in this new heating. But if you are only getting a 90% mortgage, you have then got to fork out probably more than your deposit to try and put in this heating source. I don't think that is fair for those who are trying to get on the ladder for a start. It will make it very difficult for the first-time homeowner." [Phase 1, Group 6, female, 18-45, Grampian, flat]

"So, I kind of like the idea that as part of the mortgage- ok you lend against your income for the mortgage but maybe a ring-fenced element which is 0% and the lenders would have to agree to this- it's not a grant it would be an interest-free loan for the required changes over the term of the mortgage. If it is, say 30 grand, which is a hell of a lot- but over 20-25 years you are maybe thinking about maybe 3 figures a month- which is still a lot, but if they play that in a scenario which is okay- it is going to cost you £100 extra on your mortgage a month but having a fully insulated home will reduce your costs by £100 a month- again like our house is. It suddenly becomes not so daunting to people and makes sense." [Phase 1, Group 8, male, 18-45, Scottish borders, detached house]

The pressures for landlords were similar to owner-occupiers in terms of cost but there was a difference in that they are looking for a return on their investment. Updating their properties allows them to charge a premium to their tenants and makes the property more attractive on the market but any investment needs to benefit them in the short to medium term as well (many are using their property to fund their retirement), otherwise they expect to have to sell.

"As the landlord, ultimately, we need a return on our investment and I think that is kind of critical in terms of whatever investments we do make, yes. And actually, all around you in terms of the media and in terms of the social consciousness of getting to net zero, I totally get that. I think for us –it would need to be cost-efficient for us to implement. I think the willingness is there, but it has to marry up with a return for us… If it is going to cost thousands of pounds as landlords, we will be reluctant to make that investment. If it is going to be something that we can get some grants for or something that we can implement over a period of time, that is something that we would naturally be more interested in." [Phase 1, Group 10, male, 46-75, landlord]

There was concern among some landlords that older buildings might not be able to meet the regulations and so would need an exemption otherwise they would need to sell them if they were unable to rent them out:

"Well, I'd have to either find out if there is something that I can do to make it conform to the banding that I need to be in… but because it is an older property it might not be viable so therefore, I might just have to sell the property." [Phase 1, Group 10, female, 46-75, landlord]

4.4.2. Information provision

The second overriding theme is the need to have good information and advice provision in place. There were three main areas of information and advice required:

• What is net zero – why is it important for them and how it links to them personally? Before people are willing to make changes, they need to comprehensively understand why it needs to be done. There needs to be a clear link with what impact it has on them. Many participants said that any impact from climate change was too distant and there were other priorities they felt were more important or that seemed to be more relevant to their lives. There was also an appetite to see what other countries, governments and businesses are doing, which will help them to understand the context and also to be able to see that the government isn't just "picking on individuals".

  "The education as well behind it perhaps- you know like really start a big, massive focus on this and start getting everyone really knowledgeable about it- so by the time that comes you've got a whole generation who are really, really aware and behind the initiative and what needs to be done." [Phase 1, Group 8, female, 46-75, Scottish borders, terraced house]

• What are the regulations and what do they mean for them in terms of what they need to do? Participants said that any regulations need to be promoted significantly in advance of enforcement. Regulations need to be very clear and specific about what they mean and how people can comply with them. A lot of the information people hear about focuses on why change needs to happen, but they also require specifics on what changes to make. Any deadlines also need to be made very clear and easy to understand.

  "There needs to be somebody to help homeowners with that, because if you're coming into the market, just becoming a grown-up for example and just buying your first house, where do you begin to figure out what a good level of insulation and what draught-proofing is if you've just got over the mortgage hurdle and things like that. There needs to be guidance and, you know, assistance in giving the information. It's all good and well putting these things into place saying you must do this by this time and you must do this but just crack on and do it without any help or support or advice so there needs to be advice readily available, not a dictatorship of you must do this and you must do that." [Phase 1, Group 7, female, 18-45, Western Isles, semi-detached]

• How does the technology work and will it work/is it suitable for them? Participants said that heat pumps are still a very new technology; they are not something that they have heard much about or that they ever see in practice. Participants mentioned that they would like to be able to see one working, be able to feel how warm a house can get with one and speak to people that have them so that they can really understand the technology better and what it is like to live with. Advice and support are needed to help the audience understand the benefits of the different systems – currently, awareness is low and very few are actively seeking information.

  "…And evidence that it has been proven that they are working, we install them and we don't actually know if it works, so evidence-based stuff so we can see emissions have reduced greatly…this could be something that works in your home." [Phase 1, Group 1, male, 18-45, Glasgow, flat]

The need for advice and information was very similar for landlords:

"I think that people are definitely aware of what it is now compared to a couple of years ago, but a lot of people are not aware of the 'how' – in terms of what to do about it and how to do it. I think whether it is government organisations or… I think there needs to be a lot more education to the masses in terms of what practical steps individuals can take to make an impact. At the moment, it is very sketchy I feel. I think people are aware of the CO₂ emissions, aware of net zero, aware of the impact it can have- but it is about the 'how' -what we as landlords can do to make our properties more efficient and what practical ways…Is there any sort of grants or support mechanisms? I think government and councils need to step in to offer a sort of mechanism to say this is available to do in terms of insulation or in terms of energy saving schemes for your property- it will cost you X instead of the thousands… If it is thousands- I will be honest- most people will be sceptical about making that investment because it is not going to add any value." [Phase 1, Group 10, male, 46-75, landlord]

How advice should be provided

There was a debate about where the information for these changes should come from. Even though there was a lack of trust in the government due to previously failed targets, there was broad agreement that since any new legislation will be government-led, they need to be the main source of information. It was also expected that there will be additional sources of information from independent, non-governmental organisations that feel more trusted by many, eg Martin Lewis-style support.

"[when talking about things she is doing to be more energy efficient] So, things that I've been doing energy-wise- I got a smart meter installed back in March, lowered the boiler temperature of the heating and the water to 50 degrees- so all those Martin Lewis money saving expert tips! [Phase 2, Group 4, female, 18-45, Edinburgh, in the process of getting a mortgage]

Participants were concerned about where they should go to obtain this information. They need to know who they can trust and where they can get impartial information from. When the time comes, they need someone they can trust to advise and support them on what upgrades or changes they should be making, eg what systems they should get for their property and what other changes they should personally make. They wouldn't trust an installer as they feel that they would just want to get work out of them so impartial information specific to their circumstances is required.

"Somebody that's not reading off an auto-cue and that's actually answering your questions and that when you give them your scenario, your situation, it doesn't throw them, and they say oh I don't have an answer on my cards for that. Somebody who is trained in heating… and energy saving and I don't believe you can get that kind of advice over the phone. People need to come and see and actually look and see what can be done and give you advice based on your personal circumstance because from all of our introductions, us alone are all different, and our housing situation is different, and then you put that in your own street and your own village, everybody's situation is different….so you can't possibly answer questions on a leaflet or from a video you know somebody needs to come and see." [Phase 1, Group 7, female, 18-45, Western Isles, semi-detached]

Keeping information and advice simple and breaking it down into manageable steps was key for this audience and relieves anxiety for those who were older in the group or less confident in managing multiple sources of information. Any online support was suggested to be made as easy to use and interactive as possible, with people able to input their own scenarios to help provide personalised support for what they should be doing.

There was increased anxiety among those who are digitally excluded – they recognised that most things have shifted and that you can no longer 'get someone on the end of a phone' (their ideal) so most knew they have to 'get on board' so resort to 'googling' information.

"Somewhere that if you google it and don't understand it that you can go and ask for advice…a phone line or even online someone that could email back to you and get back to you about it." [Phase 1, Group 3, male, 46-75, Glasgow, detached house]

Many said that there is a need to have information more widely discussed eg in schools, through heating engineers, DIY stores and just making it part of everyday conversation.

"I think that you have to start at the bottom and not at the top. I think you have to change people's perceptions of what it is. You need to start educating young rather than going after the older people who are set in their ways - you are not going to change them. You need to start educating young I think." [Phase 1, Group 6, female, 18-45, Grampian, terraced house]

Vulnerable groups

Financially vulnerable groups wanted real-life studies and trials to demonstrate the evidence of new technologies working and saving money. They want to see real examples from people like them and streets and houses like theirs who have already successfully installed the new technologies.

"Educate them with studies. Why Mrs Smith is now getting that system and now we're going to track her bills and now we're going to show it to you" [Phase 2, Group 2, female, 46-75, Glasgow, detached house]