Social Housing Net Zero Heat Fund - development funding invitation

Development funding call

Scope

Reducing emissions from our homes and buildings is one of the most important things we can do to help end Scotland’s contribution to climate change. Achieving emissions reductions in buildings will require, by 2030, over 1 million homes to convert to using zero or low emissions heating systems. As set out in the Heat in Buildings Strategy we must rapidly scale up deployment of zero emissions heating systems, particularly in Social Housing stock which makes up around 24% of all homes in Scotland.

The Social Housing Net Zero Heat Development fund will provide funding of at least £500k in financial year 2022/23 for small/medium Social Housing providers (Registered Social Landlords, Local Authorities and ESCOs) to undertake development work to deliver an investment grade multi-year Business Plan, which reviews the organisations existing housing stock and clearly sets out how they will reach net zero emissions across existing dwellings. Other forms of development activities can be considered such as specialist advice and/or professional fees including the preparation of feasibility studies, cost analysis and technical surveys as well as some costs towards relevant tenant engagement. The application must demonstrate how the development funding activities will allow the organisation to plan for its obligations to reach net zero emissions across its housing portfolio.

This Development Funding call will cover the period 21 Feb 2022 to 30 May 2022.

All development work should be fully completed by 31 October 2022 with possible extension depending on the scale of the work undertaken.

Policy context

Reducing emissions from our homes and buildings is one of the most important things we can do to help end Scotland’s contribution to climate change. The type of heating used in over 2 million homes and 100,000 non-domestic buildings must be changed by 2045 and we estimate that around 50% of homes, or over 1 million households will need to convert to low or zero emissions heating systems by 2030.

The expansion of the Social Housing Net Zero Heat Fund to include development funding will support small/medium Social Housing landlords across Scotland to establish the best way forward for their organisation to meet the ambitious targets set out above and develop future projects to deploy zero emissions heat, improve energy efficiency and reduce fuel poverty.

We will work with the sector to assess impact of funding to date and ensure that our funding effectively supports further acceleration of the decarbonisation of social housing stock.

Funding priority

This funding is a catalyst for social housing providers to develop plans to retrofit their existing stock to meet zero emission targets and will be aimed at small/medium social housing providers. Successful applicants will be encouraged to use plans and findings to apply for Social Housing Net Zero Heat Capital funding.

Intervention rates

Intervention rates will be on a sliding scale of between 50% to 100% match funding from the Scottish Government depending on applicants' specific circumstances. The applicant should state clearly in the application form the amount of match funding they are applying for and the reason for this request.

The maximum grant size will be capped at £100k.

Eligibility criteria

Applications are welcome from small/medium registered social landlords, local authorities and ESCOs who want to carry out development work in relation to their existing housing stock. This fair and open funding invitation has been designed to support the Social Housing sector to carry out a deep dive analysis of existing stock, with a view to utilising the information gathered to support and strengthen a future Capital funding application to the Social Housing Net Zero Fund.

Development funding is a separate award and does not guarantee that any future application to the Social Housing Net Zero Fund will be successful.

Eligible costs are:

• business plan preparation
• project manager costs
• technical surveys of existing stock
• costs of project commissioning
• tenant engagement

We will not fund employee salary costs or project delivery costs such as installation of heating systems, this funding is for development works only.

Application process

Funding is set at, at least £500k. It will remain open to applications until 30 May . Applications will be considered in the order they are received, as such we recommend submitting your application as early as possible.

Applicants will be informed of the outcome of their application within 4 weeks.