The Scottish Government's Heat in Buildings Strategy, published alongside its Business and Regulatory Impact Assessment in November 2021, states that the current Home Energy Scotland loan and cashback arrangements will be replaced in 2022/23. The replacement is a grant scheme to support energy efficiency and zero emissions heat improvements1.
The document sets out the change in the context of a wider programme of at least £1.8 billion investment over the course of the Parliament, described as an increased funding commitment1. It also confirms plans to bring forward proposals to require installation of low or zero emissions heating systems in existing buildings from 2025, with a backstop date of 20451.
"In 2022/23, the current arrangements will be replaced with a grant scheme to support energy efficiency and zero emissions heat improvements"
The scale of the change is set out in the same assessment. Around 81% of Scottish homes use mains gas, 5% use heating oil and a further 2% use LPG or solid mineral fuels, which together account for an estimated 88% of the residential fuel mix1. Only around 11% of households currently have a renewable or very low emissions heating system1. Around 3,000 renewable heating systems are installed in Scottish homes each year, and the strategy states that zero emissions heat installations must scale up to at least 124,000 systems between 2021 and 2026, peaking at over 200,000 new systems per annum in the late-2020s1.
| Measure | Figure |
|---|---|
| Homes using mains gas | 81% |
| Homes using heating oil | 5% |
| Homes using LPG or solid mineral fuels | 2% |
| Homes with renewable or very low emissions heating | around 11% |
| Renewable heating systems installed per year | around 3,000 |
| Zero emissions systems needed, 2021 to 2026 | at least 124,000 |
The assessment estimates the total cost of converting Scotland's building stock to zero emissions by 2045 at around £33 billion1. It also records that around 50% of homes, or over 1 million households, will need to convert to zero emissions heating systems by 20301. Emissions from the buildings sector fell from 10.41 MtCO2e in 2013 to 9.38 MtCO2e in 2019, but the sector's share of total emissions rose slightly from 18.1% to 19.6% over the same period1.
Why it matters for households
For a household considering work such as insulation, glazing or a heat pump, the practical change is in the shape of the public support: the loan and cashback route closes and a grant route takes its place in 2022/231. A grant does not have to be repaid, which changes the upfront arithmetic compared with a loan, though the assessment does not set out grant rates, eligibility or caps, and these have not been reported in the document. Households on the current Home Energy Scotland Grant and Loan Scheme will be affected by the transition, and the closed loan and cashback scheme is the arrangement being replaced.
The wider context is a statutory push away from fossil fuel heating. The assessment notes a target for net zero emissions by 2045 and interim reductions of 75% and 90% by 2030 and 20401. For a home's energy independence, the direction is towards heating that does not rely on mains gas, heating oil or LPG, with the assessment stating that none of these high carbon fuels is compatible with the net zero ambition1. The assessment also links poor energy efficiency to fuel poverty, noting that 40% of households in EPC F or G properties were in fuel poverty in 2019, compared with 20% in B or C rated properties1. Fuel poverty targets require that by 2040 no more than 5% of households are in fuel poverty and no more than 1% in extreme fuel poverty1.
What happens next
The assessment states that the grant scheme replaces the current arrangements in 2022/231. It also records a commitment to bring forward proposals to require low or zero emissions heating systems in existing buildings from 2025, with a backstop date of 2045, and a Heat in Buildings Supply Chain Delivery Plan to be developed by Summer 20221. The assessment does not give a start date within 2022/23, nor the grant rates or eligibility rules; these have not been reported in the document.