In recent efforts to reach the legally binding target to reduce Scotland's emissions of all greenhouse gases to net-zero by 2045, the Scottish Government has allocated £100 million over five years to the Social Housing Net Zero Heat Fund 2021.
The monies are to be invested in projects involving the installation of zero emissions heating systems and energy efficiency measures across existing social housing stock. The targets related to fuel poverty (that by 2040 no more than 5% of households are fuel poor and no more that 1% in extreme fuel poverty) also underpin the fund.
The fund divides itself across two types of project known as 'themes'. To qualify for funding, the applicant's project must fall into one of the following:
- Theme 1 which covers zero emissions heating systems for social housing (e.g., air/ground/water source heat pumps and biomass boilers); or
- Theme 2, "Fabric First" energy efficiency only projects, which involves the materials used to construct the social housing units themselves (e.g., environmentally friendly loft insulation, heating controls, storage heaters).
Over the coming year (2021/22) registered social landlords, local authorities and energy service companies will be able to apply for the first tranche of the fund, amounting to £20 million, provided they meet certain eligibility criteria.
There are two main criteria to be met by applicants:
- They must be able to provide a location for their project, a concept and a defined end user.
- Thereafter the following mandatory conditions must be satisfied:
- the ability to meet at least one of the funding invitation priority themes
- the potential to deliver a significant reduction of greenhouse gas emissions and energy consumption
- the ability to secure other sources of funding/finance that make a minimum of 50% contribution towards the cost of final delivery costs of the project
- the potential to have a positive and significant social impact on Scotland
- the ability to deliver zero emissions heating systems and energy efficiency measures that can provide savings for social housing tenants
- the provision of a clearly set out case for the requirement of and value added from grant support
Applications will be judged on a five-point scale ranging from unacceptable to excellent.
Beyond the mandatory criteria, applicants should note the key theme of feasibility throughout the guidance. They should be able to provide examples of previous and planned work in the field of reducing greenhouse gas emissions and energy consumption
Further, the technology in question must be suitable with the guidance setting out the expectation of feasibility work or a business case to accompany an application.
Another important metric is an applicant's ability to demonstrate effective tenant engagement and any positive social impact of their project. This follows recent surveys where data showed a considerable number of social housing tenants suffering as a result of fuel poverty as well as being disengaged and lacking awareness of the Scottish Government's green targets.
Projects falling within the definition of Theme 1 must have completed installation and commissioning by 30 November 2022, while those submitted under Theme 2 must be installed by 31 January 2022.
The application submission dates – 'checkpoints' – are spread quarterly across the coming year with the first just passed on 31 August. The next key date for prospective applicants, therefore, is 30 November 2021 – this is the last date for application submission for Checkpoint 2.
The guidance provides that applicants will be informed of the outcome of their submission within four weeks of their checkpoint.
At Brodies, we are well placed to advise any prospective or current applicants on any issues or questions on the process. If you require advice on the fund or on any social housing-related matter, please contact Jackie McGuire, Fiona McLeod or Johanna Boyd.