Publication - Factsheet

Social Housing Net Zero Heat Fund: overview

More information on the 2020 funding invitation, including priority themes and eligibility criteria.

Published:
21 Aug 2020
Social Housing Net Zero Heat Fund: overview

Low Carbon Infrastructure Transition Programme (LCITP)

Launched in March 2015, the LCITP is led by the Scottish Government in partnership with Scottish Enterprise, Highlands & Islands Enterprise, Scottish Futures Trust and Zero Waste Scotland.

A range of support mechanisms including project development, expert advice and financial support is available through the LCITP to support the delivery of large scale private, public and community sector low-carbon energy generation and energy efficiency projects across Scotland.

The programme aims to stimulate commercial interest, investment and maximise Scotland’s vast potential in the low carbon sector whilst contributing to the positive progress in reducing Scotland’s greenhouse gas emissions. The programme also aims to continue to support Scotland’s economic recovery following the COVID-19 pandemic. To date, LCITP has supported the successful deployment of over 20 demonstration projects and the development of over 30 early stage projects.

Funding invitation 2020: scope

Heating our buildings is responsible for a significant proportion of Scotland’s emissions. As such, work to make our homes more energy efficient and to transition heating systems using renewable or low carbon sources is critical.

This LCITP fund will target total investment of £20 million, provided through a blended model of capital grant funding with loan funding available as partial match.

This fair and open funding invitation has been designed to accelerate the delivery of energy efficient, low carbon heat provision to social housing projects across Scotland and to support projects that can effectively contribute towards the achievement of the Scottish Government’s ambitions for Scotland to achieve net zero emissions by 2045.

The fund will aim to support projects that can accelerate the deployment of low carbon heat in existing social housing, particularly through the installation and/or use of heat pumps. Registered Social Landlords (RSLs), Local Authorities and Energy Service Companies (ESCOs) are eligible to apply.

Applicants will be required to provide information on previous or planned energy efficiency work undertaken. Furthermore, projects will be required to demonstrate a reduction in energy bills for their tenants.

Funding invitation priority themes

Theme 1 – low carbon heat for urban social housing

Theme 1 focuses on low carbon heat solutions in urban social housing including large tower blocks. The following technologies are eligible for funding:

  • air source heat pumps
  • ground source heat pumps
  • water source heat pumps
  • connection to existing heat networks

Theme 2 – low carbon heat for rural and social housing

Theme 2 focuses on low carbon heat solutions in rural and island locations. The following technologies are eligible for funding:

  • air source heat pump
  • ground source heat pump
  • water source heat pumps
  • small scale biomass boilers
  • connection to existing heat networks

Theme 3 – integrated low carbon heat systems for social housing across Scotland

Theme 3 focuses on supporting the development of projects that can deliver innovative technologies and integrated low carbon heat systems that deliver reliable, affordable heat to social housing in all parts of Scotland. The following technologies are eligible for funding:

  • air source heat pumps
  • ground source heat pumps
  • water source heat pumps
  • biomass boilers
  • connection to existing heat networks

The following technologies can be considered in conjunction with low carbon heat solutions:

  • solar panels
  • battery storage
  • thermal storage

Intervention rates

The maximum grant funding intervention rate will be between 45% and 50% depending on the size of the organisation and the location of the project. Projects will be required to provide 50% match funding, of which 30% SG loan funding can be applied for and a minimum of 20% must be from their own capital or agreed private financing.

Eligible capital costs are:

  • financial costs incurred for the purchase of physical assets
  • costs of project build, installation and construction
  • costs of project commissioning
  • non-reclaimable VAT for eligible capital costs

Eligibility criteria

Applications are welcome from low carbon heat provision to social housing projects that will be delivered in Scotland, with a project location, proof of technology concept and an end user for output identified and secured at time of submitting an application. Applications from registered social landlords, local authorities and ESCOs will be considered.

The LCITP is an outcomes and results-driven infrastructure investment programme, as such projects are required to meet the following mandatory criteria:

  • the ability to meet at least one of the funding invitation priority themes
  • the potential to deliver a significant reduction of greenhouse gas emissions (MtCO₂e) 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 low carbon heat that can provide savings for social housing tenants
  • the provision of a clear set out case for the requirement of and value added from LCITP support

Projects will be required to complete installation and commissioning by 30 November 2021.

Application process

Please email lcitp@gov.scot to discuss your project and request an application pack.

Applications can be submitted between 1 September 2020 and 18 December 2020.

Applications will be assessed within 4 weeks of receipt and applicants informed of the outcome.