Response to the Scotland’s draft Climate Change Plan – 2026-2040

We support the draft Climate Change Plan’s recognition that “a just transition to net zero will mean that we must decarbonise the heat in our residential and public buildings while also reducing fuel poverty”. We also welcome the acknowledgement that many households, families and businesses across Scotland continue to face significant financial pressures, exacerbated by high fuel prices. It is also positive to see recognition that the transition to clean heat presents substantial economic opportunities for Scotland, and that achieving ambitions for retrofitting and heat decarbonisation will require significant growth in the skilled workforce.

Ensuring the transition is genuinely just will require people to have a clear sense of what support will be available to them and when. Many of the actions included in the Plan build on programmes the Scottish Government is already delivering, and it is positive to see a commitment to maintain existing advice services and wider support. These programmes are recognised as leading programmes in the UK and highly successful in supporting people to take action in their homes.  

At present, however, the Plan offers limited detail on what additional support will be available as delivery scales up. Providing greater clarity would help households understand what the transition will mean for them, especially as heating systems reach the end of their life, and would give the supply chain the confidence required to train, recruit and invest.

It is encouraging that the more detailed pathway for scaling up delivery is expected to be set out in the forthcoming Heat in Buildings Strategy and Delivery Plan, due at the end of 2026. Providing this clarity will be important for giving households and the supply chain the confidence they need. We look forward to seeing this further detail as it will play a key role in supporting a fair and well managed‑ transition.

A skilled and adequately resourced workforce will be essential to delivering a net zero future. Significant workforce growth will be required across the heat and energy efficiency sectors if climate change targets are to be met. In this context, we think that the following will be important to ensure that Scotland has the skills and capacity needed:

• Support streamlined upskilling and retraining. Modern apprenticeships can take up to four years to complete, creating a time lag in delivering skilled workers. The Scottish Government should support faster training routes – such as conversion courses for people entering from other sectors – to help meet immediate demand. Alongside this, there is an opportunity to develop new apprenticeship pathways tailored to the needs of Scotland’s low carbon heating industry, building on models such as the Low Carbon Heating Technician apprenticeship recently introduced in England, which focuses specifically on the installation and maintenance of low carbon heating systems and can be completed in three years.
• Provide financial support for people reskilling. Introduce financial assistance for individuals undertaking training or changing careers into the retrofit sector. This would help remove income barriers during the training period and encourage more people to enter the sector. This could include financial support for adults over 25 who wish to undertake an apprenticeship. Addressing this gap would open up apprenticeship routes to a wider pool of experienced workers seeking to transition into low carbon roles.
• Make it easier for young people to start careers in retrofit. The Scottish Government should work with partners such as the Scottish College Network, Skills Development Scotland and representatives from across the low-carbon heat and retrofit industry – such as heat-pump manufacturers, contractors and installers – to expand modern apprenticeship pathways in renewables. This will help young people gain the skills they need to access secure, long-term jobs in the retrofit sector.
• Raise awareness and improve the sector’s appeal. The Scottish Government should launch targeted campaigns to raise awareness of retrofit careers, particularly among underrepresented groups such as women and ethnic minorities. A lack of visibility is currently limiting workforce growth.
• Promote retrofit careers in schools. Collaborate with careers services to raise awareness of retrofit as a career option among school pupils. Early engagement will help young people make informed choices and enter the sector through supported pathways.
• Support SME installers to grow with local markets. The Scottish Government should continue to provide tailored support to help local SME installers expand in response to growing demand – especially in rural areas. Programmes like the Scottish Government’s Green Heat Installer Programme (GHIEP), which is delivered by Energy Saving Trust, already play an important role in this space and should be built upon.
• Support small businesses to take on apprentices. The Scottish Government should provide targeted financial assistance to help small and micro businesses cover the costs of employing apprentices. Many small and medium side firms – particularly in rural areas – are currently unable to afford the costs of taking on new apprentices. Supporting these businesses to take on apprentices would help grow the skilled workforce in the medium term and ensure that retrofit jobs are distributed across Scotland’s communities.

Please see our response to question 2.

In addition, one of the most important ways to support employers across the private, public and third sectors is to provide policy certainty. Businesses need confidence about the scale of future demand, the measures that will be required, when the work will be needed and where.  Regulation will also be important to provide certainty for businesses. At present, uncertainty about future demand is holding back supply chain investment.

We agree that some of the Plan’s impacts will have greater implications for different parts of Scotland and support the Plan’s recognition of these regional impacts. As noted in our response to question 5, decarbonising homes in a way that is fair and leaves no one behind requires that all households – regardless of building type, tenure or location – can access the both the support (including financial support) and the skilled workforce needed to retrofit their homes.

Continue to deliver impartial, tailored advice

If homes and buildings are to be decarbonised in a way that is fair and leaves no one behind, it will be important that people know what steps they can take to improve their homes and what support is available to help them. Without clear, trusted information and advice, some households will find it harder to take action and risk being left behind.

To make informed decisions about improving the energy performance of their homes people need access to trusted advice. The Scottish Government’s Home Energy Scotland advice service plays a central role in meeting this need, offering free impartial advice to consumers on fuel poverty, energy and carbon-saving advice which is tailored to their individual circumstances. Its advice aims to facilitate informed choices by removing technical jargon, making home improvements simple to understand, changing the buying and usage behaviours of householders and referring them to financial support schemes that best meet their needs. As demand for energy efficiency and clean heating grows, it will be important to continue building on Home Energy Scotland’s capacity to give households the confidence to make changes to their homes.

In this context we very much welcome the commitment in the draft Climate Change Plan to “continue to deliver a programme of support schemes and advice services which are designed to support a wide range of groups to decarbonise heat in our buildings”.

Continue to ensure all households can access the advice they need

If homes and buildings are to be decarbonised in a way that is fair and leaves no one behind, it is also vital that advice services are designed and delivered in a way that ensures all households – particularly those least likely to seek support themselves – can access the information and advice they need. Many people who could benefit from advice do not actively seek it.

Home Energy Scotland’s existing model already demonstrates strong practice in this area. Home Energy Scotland works in partnership with organisations who are already supporting these individuals to ensure that those most in need are referred into advice services and receive the help they might otherwise miss out on. Home Energy Scotland works with trusted partner organisations including health and social care organisations, local authorities, charities, food banks etc to build referral pathways for vulnerable householders. During 2023-24, 331 trusted partner organisations referred more than 9,400 people to Home Energy Scotland. These organisations can make seamless referrals using an online referral portal which works in real time to put householder’s details directly into Home Energy Scotland’s database for advisors to follow up.

To further ensure that advice and support reach those who need it most, Home Energy Scotland has a team of Energycarers, specialist advisors who support the most vulnerable wand those with complex cases through home visits. This support enables vulnerable people to engage with funding programmes and receive home improvements who might otherwise not complete the process.

It will be important to keep these kinds of approaches in place. Continuing to work with trusted organisations, making referrals easy and providing specialist, hands-on support through Energycarers will help ensure that people who don’t usually seek support can still get the advice they need.

Public engagement

If homes and buildings are to be decarbonised in a way that is fair and leaves no one behind, widespread public engagement will be required. Research continues to show that many people remain uncertain about what is required of them, do not feel part of the net zero transition, or hold misconceptions about low carbon technologies. Continued, sustained public engagement —coupled with strong signposting to impartial sources such as Home Energy Scotland — will be critical to ensuring that all households feel informed, supported and confident about the changes ahead. There may also be value in ensuring that public engagment activity is aligned, where appropriate, with any wider UK-level campaigns emerging through the Warm Homes Plan.

Continue to ensure that there is a financial offering for all
To meet Scotland’s carbon budgets and ensure a fair transition, it is essential that financial support for clean heating and energy efficiency measures – including grants and subsidised finance – continues over the coming years. For heat pumps, financial support should remain in place until cost parity is achieved between owning and running a fossil fuel boiler and a heat pump. At current prices, the upfront costs of heat pumps are higher than fossil fuel boilers and, without adequate financial support – such as the grants and zero interest loans already available through the Home Energy Scotland Grant and Loan Scheme – many households will struggle to afford the switch.

As the market evolves, banks and other lenders may increasingly offer loans or other green finance products to support this transition. However, not all households will be eligible for such finance. Maintaining some form of publicly backed support will therefore remain important to ensure these households are not left behind. For fuel poor households, fully funded measures will be essential and as such the support already offered through Warmer Homes Scotland should continue.

Maintaining financial offerings is critical not only to support uptake and meet installation targets, but also to ensure fairness and avoid penalising those unable to access private finance.

We think that the following policies will be important in the years ahead:

• Continue to provide fully funded measures for fuel-poor households to ensure equitable access to clean heating and energy efficiency
• Maintain public financial support for clean heating until cost parity is achieved between installing and running fossil fuel boilers and heat pumps
• Facilitate the development of private finance options to complement public support and expand consumer choice
• Provide a clear roadmap for the evolution of financial support over time, offering certainty to households and the supply chain.

Recognising overheating as part of the heat transition

If homes and buildings are to be decarbonised in a way that is fair and leaves no one behind, it will be important that they are safe, comfortable and affordable to live in as Scotland’s climate changes. We therefore welcome the Scottish Government’s commitment, as part of the new Heat in Buildings Strategy and Deliver Plan, to consider adaptation issues. In particular, we welcome the proposed work to explore how passive cooling measures, such as ventilation and shading, could be applied to buildings when improving their fabric efficiency, how adaptation can be integrated into public engagement on energy efficiency and to understand the need for and role of clean heating systems that are capable of providing both heating and cooling.

As Scotland’s climate continues to change and rising temperatures increase the risk of overheating in homes, it will also be important to ensure that cooling is considered as part of the clean heat transition – both to protect health and wellbeing and to avoid unnecessary increases in energy use, emissions and household costs.

Policy should prioritise passive cooling measures such as effective shading and natural ventilation. These approaches can often reduce or eliminate the need for mechanical cooling, helping households stay comfortable without driving up energy demand or costs. However, without clear guidance, there is a risk that households will default to energy-intensive solutions like standalone air conditioning units – when simpler, lower cost options would suffice. There is also a risk that households will adopt fragmented and inefficient solutions – for example, installing a heat pump for heating and later adding a standalone air conditioning unit which would increase both energy demand and household costs more than would have been the case if cooling needs had been considered from the outset.

For some households, the ability to cool as well as heat may actually be a driver for adopting heat pump technology – particularly air to air or bidirectional systems. Recognising this potential could help broaden the appeal of clean heating solutions and support uptake, especially in homes where overheating risk is already a concern. This again underlines the importance of ensuring households have access to clear guidance and advice on what solutions may be best for their home or personal circumstances.

To date, public funding and incentives have so far focused primarily on heating. However, as overheating risks increase, there may be a case for revisiting subsidy design to ensure that it supports systems that offer both heating and cooling in certain circumstances. While cooling may not yet be a widespread need in Scotland, we agree that it is sensible to begin considering how and when cooling should be factored into future policy and funding frameworks – ensuring that Scotland is prepared for emerging climate realities rather than having to respond reactively.

To help households make informed and energy efficient choices, future programmes, regulations and advice services should anticipate the potential need for cooling. This must include support for passive cooling measures, to ensure that any shift toward cooling does not result in unnecessary energy use, emissions, or costs.

Ensure there is sufficient financial support for all building types

If homes and buildings are to be decarbonised in a way that is fair and leaves no one behind, it will be important that financial support is available for all building types. Flats face specific challenges to retrofit, including co-ordinating groups of owners, the technical complexity of the retrofit required and varying incomes and ability to pay within groups of owners.

Given that more than 36% of people in Scotland live in flats, decarbonising these homes has an important role to play in meeting climate change targets. Last year, we published a report considering how to accelerate retrofit of flats in across the UK, learning lessons from countries across Europe. The report set out a range of recommendations tailored to each UK nation. For Scotland, one recommendation was to address the gap in financial support for groups of owners in flats, noting that current schemes do not include provisions for collective applications. We highlighted to need to enable groups of owners to access financial support and ensure that funding mechanisms are designed to support shared retrofit projects.

Further recommendations can be found in the report and we would be happy to provide further information or discuss this work in more detail with you if that would be helpful.

We also note the importance of the Scottish Law Commission’s proposals for compulsory owners’ associations and the Scottish Parliamentary Working Group’s recommendations on reserve funds and five yearly inspections. These measures, together with financial support that includes provisions for collective applications, would make it significantly easier for groups of owners to plan, fund and deliver retrofit collectively.

Support for the supply chain

If homes and buildings are to be decarbonised in a way that is fair and leaves no one behind, it will be important that households can access high-quality installation services wherever they live. Significant workforce growth will be required if climate change targets are to be met. Our response to question 2 outlines the policies that we think are required to support growth of the supply chain.

Making both the running costs and upfront costs of clean heating systems (such as heat pumps) affordable is essential to ensuring that all households are able to benefit from low-carbon heat.

Running costs

The energy bill savings for homes switching to a heat pump are largely dependent on what type of heating system is being replaced. In general, heat pumps should be cheaper to run than other fuel types, such as coal or oil, as they are much more efficient.

However, the situation is less positive for homes using gas to heat their homes as the price of electricity in Great Britain has typically been three to five times more expensive per unit than gas. The running costs of heat pumps can therefore be a disincentive for households switching from a gas boiler, as it makes the energy bill savings too low to justify the upfront investment. The CCC have also found that without policy intervention, the running cost of heat pumps will not reach parity with a gas boiler until 2035.

This underlines the need for policy measures to reduce the cost of electricity to ensure that heat pumps offer a better financial case.

Social and environmental policy levies currently make up an estimated 16% of electricity bills. To help address running costs and support the transition to low-carbon heating, the UK Government should set out a clear approach for removing these legacy policy costs from electricity bills. Any reforms must ensure that households without the ability to switch away from gas are not unfairly penalised.

There is also the potential to reduce heat pump running costs further by combining them with other low carbon technologies (such as solar PV and battery storage) and a smart tariff. However, it is important to note that smart meters are essential to enabling this. We will shortly publish research on the potential savings from different technology combinations and smart tariffs, and would welcome the opportunity to share this with officials when available.

Upfront costs

As noted in our response to question 5, it will also essential that financial support to overcome the upfront costs of clean heating and energy efficiency measures – including grants and subsidised finance – remains in place. For heat pumps, financial support should remain in place until cost parity is achieved between owning and running a fossil fuel boiler and a heat pump. At current prices, the upfront costs of heat pumps are higher than fossil fuel boilers and, without adequate financial support – such as the grants and zero interest loans already available through the Home Energy Scotland Grant and Loan Scheme – many households will struggle to afford the switch.

While banks and other lenders may increasingly offer loans or other green finance products to support this transition, not all households will be eligible for such finance. The Scottish Government should therefore continue to provide subsidised finance and grants to ensure that everyone – including those excluded from mainstream credit markets – can access the support they need. For fuel poor households, fully funded measures will be essential and as such the support already offered through Warmer Homes Scotland should continue.

Consideration should also be given to extending existing support programmes to include air to air heat pumps, which have lower upfront costs than other heat pump types. These systems are already eligible for funding elsewhere in the UK through the Boiler Upgrade Scheme, and supporting them in Scotland could help more households switch to a low carbon heating system.

The Scottish Government can support communities to participate in planning of local sustainable infrastructure by:

• Drawing on international and UK best practice by undertaking a review of successful sustainable infrastructure projects that have been taken forward with community participation.
• Develop a vision of what Scottish neighbourhoods could look like with sustainable infrastructure and present this in accessible formats to help communities imagine the benefits.
• Provide communities with strucured opportunities for deliberation, including facilitated in person workshops and online forums.
• Map wider stakeholders who can contribute to or benefit from local infrastructure improvements – such as car share providers, cycle retailers, active travel groups and local employers – and involve hem in the engagement programme. Ensure relevant local authority officers and elected members are engaged throughout.
• Proactively identify groups who may have concerns or objections and involve them early to explore their perspectives and identify ways to address potential negative impacts. Where concerns cannot be full resolved, work collaboratively to identify reasonable mitigation measures.
• Provide funding and practical support to enable community groups and volunteers to participate.
• Ensure effective communications are in place to raise awareness of sustainable travel options and encourage participation in local decision making. Ensure simple accessible mechanisms – cush as digital engagement platforms and community events – are available throughout the planning and delivery process.

To help people in Scotland live a more climate-friendly lifestyle Scotland will need to build on its existing package of policies to reduce car use and accelerate the shift to zero emission vehicles. Key actions should include:

• Additional funding mechanisms. As demand for electric vehicles (EV) grows, local authorities will need access to flexible and scalable financing options to expand charging infrastructure. Asset financing or equity loans—offered by public or private lenders—can help unlock investment, provided there is a clear commercial model and reliable revenue from Electric Vehicle Infrastructure (EVI) use. Potential sources include the Public Works Loan Board (PWLB), Crown Commercial Service (CCS) asset finance, and the National Wealth Fund.
• Tailored advice and support. Many people are unsure about switching to electric vehicles—from choosing the right model to understanding charging options and costs. Accessible, personalised advice can help overcome these barriers, particularly for small businesses, rural residents, and those with limited transport alternatives.
• Public awareness campaigns. Coordinated national and local campaigns should promote the environmental, health, and financial benefits of low-carbon transport, and raise awareness of available support schemes. These campaigns must be inclusive and reach diverse communities across Scotland. This should be designed to address concerns and misconceptions about the need to decarbonise our transport sector and the wider net zero transition.
• National scrappage scheme. A Scotland-wide scheme to replace older, high-emission vehicles with electric or ultra-low emission alternatives would help overcome upfront cost barriers and accelerate the removal of the most polluting vehicles.
• Multi-year infrastructure funding. Long-term funding commitments are essential to give local authorities, housing providers, and communities the confidence to plan and deliver EV infrastructure. Targeted support should address challenges in flatted and factored developments, and rural and island areas.
• Local incentives funded by LEZ penalties.Revenue from Low Emission Zone (LEZ) penalties should be reinvested into local incentives for low-carbon transport, such as EV grants, subsidised charging, or car club memberships.
• Community action toolkits.Practical toolkits should be developed to support community-led initiatives on low-carbon transport, helping local authorities and grassroots groups design and deliver solutions tailored to local needs.
• Expansion of LEZ and tightening of standards. LEZ coverage should be gradually expanded with standards progressively strengthened over time.
• Moving people up the sustainable travel hierarchy. Research and investment should focus on effective ways to reduce private vehicle ownership and reliance, whilst increasing use of public transport and active travel. This could include interventions such as traffic calming measures and the development of more cycle paths.
• Support for areas with limited off-street parking. Targeted approaches are needed to address the challenges faced by households without access to off-street parking for EV charging. This could include trialling a range of innovative solutions in different locations and assessing their impact.
• Apprenticeship and training scheme funding. Support is needed to ensure that there are enough qualified mechanics to service electric vehicles, and enough engineers to install and upkeep the infrastructure required to support the transition to EVs.