What does the Heat in Buildings Bill mean for the supply chain?

In March, the Scottish Government closed the consultation on its Heat in Buildings Bill. The Bill will have significant impacts on Scotland’s existing supply chain, which needs to expand quickly to deliver the installations required.

Below, we explain what the Bill will mean for the supply chain.

Heat in Buildings Bill  

The Bill proposes that use of polluting heating systems, such as gas boilers, will be prohibited after 2045. The replacement systems will need to be electric, such as heat pumps.  

Therefore, it is crucial that installers, manufacturers and the wider supply chain have time to prepare, invest, and upskill their workforce to meet the demand for electric heating and fabric measures. 

To improve energy efficiency, the Heat in Buildings Bill proposes a new law requiring homes to meet a ‘reasonable minimum energy efficiency standard’ by 2033. The consultation also points out that privately rented homes tend to have particularly poor levels of energy efficiency, so private landlords will need to meet this standard by 2028. 

Changeworks has urged the Scottish Government to urgently progress the Bill. Just as importantly, the Government also needs to provide clear and timely communication on quality standards and implementation dates to enable the supply chain to prepare itself for the transition. 

Call for Scottish Government investment 

The Scottish Government should invest in the development of the supply chain, skills, and the development of the electric grid to ensure that decarbonising Scotland’s homes by 2045 is feasible.  

We recommend that investment from the Scottish Government should be prioritised to support development and drive the supply chain in the Highlands and rural Scotland in particular, as the current supply chain is not capable of meeting present demands for installations. 

Property purchase trigger 

To manage the phaseout of polluting heating systems, anyone purchasing a home or business premises will need to move to ‘clean’ heating (Zero Direct Emissions Heating) within a fixed period following completion of the sale.  

Changeworks has urged that a grace period will be necessary to allow the supply chain to grow appropriately. We recommend this grace period should be two years to balance feasibility with achieving carbon reduction targets at pace.  

This property purchase ‘trigger point’ encourages a staggered approach to installations, which will relieve pressure on installers in the years approaching 2045. 

Changeworks has recommended that other ‘trigger points’ should be included in the Bill to disincentivise property owners from waiting until 2040 onwards to meet the Heat in Buildings Standard.  

We recommend the planned replacement of a gas boiler and any major renovation that requires a permit also be trigger points for the installation of clean heating.  

Additional trigger points would prevent homeowners from delaying action and relieve pressure on the supply chain in the decade leading up to 2045. 

Heat networks 

The Heat in Buildings Bill proposes that local authorities and Scottish Ministers will have new powers to require developers to connect new buildings to a heat network, wherever possible. This will likely have significant implications for the supply chain.  

The model is already driving heat network expansion in London; Energy firm Vattenfall is partnering with developers to oversee the development of two separate heat networks. Vattenfall anticipates that the larger of the two networks will provide clean heat to 75,000 homes by the 2030s.  

In Scotland, Vattenfall have partnered with Midlothian council to deliver heating from a waste heat source to newbuild homes. Other firms delivering heat networks to buildings in Scotland include Vital Energi and Sharc Energy Systems. 

The UK Government has published guidance for heat network developers and those involved in the heat network supply chain. 

The Scottish Government should support the development of heat networks by encouraging and resourcing local authorities to move forward with implementing their delivery plans once they have completed their Local Heat and Energy Efficiency Strategy (LHEES).  

Changeworks urges local authorities not to delay their LHEES delivery plans, which will be paramount to the implementation of the Heat in Buildings Standard.  

Just as importantly, timeframes and certainty are needed for the supply chain to respond to and deliver Scottish Government targets. Similarly, certainty should be provided to homeowners about options and pathways available to achieve the Heat in Buildings Standard. 

Changeworks’ work with the supply chain 

Changeworks is working with the retrofit supply chain to build and maintain a network of installers to support the decarbonisation of Scotland’s homes. We are working with key stakeholders to ensure that decarbonisation is scaled up, including skills providers and manufacturers. 

We recently launched a new whole house retrofit service that will support homeowners to make their home more energy efficient. EcoCosi from Changeworks is a comprehensive service that provides tailored solutions, advice, and end to end support to households through the process of retrofitting their home.