Publication - Impact assessment

The Energy Efficiency (Private Rented Property) (Scotland) regulations 2020: BRIA

Business and regulatory impact assessment (BRIA) for the Energy Efficiency (Domestic Private Rented Property) (Scotland) regulations 2020.

47 page PDF

573.6 kB

47 page PDF

573.6 kB

Contents
The Energy Efficiency (Private Rented Property) (Scotland) regulations 2020: BRIA
Footnotes

47 page PDF

573.6 kB

Footnotes

1. The National Outcomes form part of the National Performance Framework, available at https://nationalperformance.gov.scot/

2. Scottish Greenhouse Gas Emissions 2017, available at https://www.gov.scot/publications/scottish-greenhouse-gas-emissions-2017/

3. Climate Change Plan The Third Report on Proposals and Policies 2018-2032, available at: https://www.gov.scot/publications/scottish-governments-climate-change-plan-third-report-proposals-policies-2018/

4. http://www.gov.scot/Publications/2010/10/07142301/0

5. Scottish Energy Strategy: The Future of Energy in Scotland, available at: https://www2.gov.scot/Resource/0052/00529523.pdf

6. Fuel Poverty (Target, Definition and Strategy) (Scotland) Bill and Fuel Poverty Strategy: http://www.legislation.gov.uk/asp/2019/10/enacted

7. https://www.lboro.ac.uk/research/crsp/mis/

8. https://www.gov.scot/publications/latest-estimates-fuel-poverty-extreme-fuel-poverty-under-proposed-new-definition-following-stage-2-fuel-poverty-targets-definition-strategy-scotland-bill/pages/1/

9. Energy Efficient Scotland: route map, available at: https://www.gov.scot/publications/energy-efficient-scotland-route-map/

10. Scottish Household Survey, 2018 : https://www.gov.scot/publications/scottish-household-survey-key-findings-2018/

11. http://www.gov.scot/Publications/2013/05/5877

12. Scottish House Condition Survey: Annual Report 2017. Table 20. Available at https://www.gov.scot/publications/scottish-house-condition-survey-2017-key-findings/

13. Figures are based on SAP 2009 to give a longer time series; therefore they will be slightly different to the 2017 figures in Table 2, which are based on SAP 2012.

14. Dwellings built after 1982 are presumed insulated when built due to building regulations, and therefore do not require retrofitting. The proportions in the graph are therefore expressed in relation to all pre-1982 cavity wall dwellings.

15. For example, buyers may be the party who directly pays for a tax on goods and services, but the economic impact depends on the price elasticity (sensitivity) of buyers relative to sellers for each particular good or service.

16. Although it should be noted that the proposed minimum EPC ratings for the private rented sector are below those for the social sector, at least in the current phase of regulation.

17. In the economics literature, this is referred to as a negative externality, which is a type of market failure which arises when there are costs to society which are not reflected in the price of a market transaction.

18. Figure 4, Scottish House Condition Survey, 2017.

19. Marmot Review Team (2011). "The Health Impacts of Cold Homes and Fuel Poverty". Available at: http://www.instituteofhealthequity.org/projects/the-health-impacts-of-cold-homes-and-fuel-poverty

20. Hills (2012). "Getting the measures of fuel poverty, Final Report of the Fuel Poverty Review". Available at: https://www.gov.uk/government/publications/final-report-of-the-fuel-poverty-review

21. Cochrane Systematic Review (2013). Available at: http://onlinelibrary.wiley.com/doi/10.1002/14651858.CD008657.pub2/abstract

22. "Evidence Review of the Potential Wider Impacts of Climate change Mitigation Options: Built Environment Sector", available at http://www.gov.scot/Publications/2017/01/3358

23. "Public health benefits of strategies to reduce greenhouse-gas emissions: household energy", available at http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(09)61713-X/abstract

24. Energy efficiency and condition standards in private rented housing: A Scotland's Energy Efficiency Programme Consultation

25. Energy efficiency and condition standards in private rented housing: consultation analysis

26. https://www.gov.scot/publications/energy-efficient-scotland-route-map/

27. The Energy Efficiency (Private Rented Property) (Scotland) Regulations 2019

28. https://beta.gov.scot/groups/reeps-working-group/

29. "Developing the regulation of energy efficiency of private sector housing (REEPS): modelling improvements to the target stock", undertaken by Ipsos MORI Scotland and Alembic Research.

30. The version of SAP used was SAP 2012 version 9.92, which also forms the basis of the proposed minimum EPCs proposed in this consultation.

31. The 2017 SHCS was the latest available date at the time at writing. Note that It is assumed that, within a particular EPC band, the percentage share of each housing archetype in 2017 is the same as in the dataset used in the independent research.

32. This assumption is in line with the UK Government approach; see the "Final Stage Impact Assessment for the Private Rented Sector Regulations", which draws on a 2009 report by Ecofys, "The hidden costs and benefits of domestic energy efficiency and carbon saving measures".

33. See the section on "Effect of in-use factors", from para 5.51 onwards, in the independent research.

34. Annex 6 of the Green Book, Appraisal and Evaluation in Central Government.

35. Table 3.18 in the Scottish Household Survey 2018: Annual Report.

36. Length of time at current address will somewhat underestimate tenure length, because it is recorded at the time the household is interviewed for the Scottish Household Survey, rather than when their tenure has completed. Nevertheless, it should give a reasonable indication of tenure length, especially in the private rented sector where length of time at current address is typically quite short.

37. For example, minimum boiler efficiencies for replacements are set through building regulations – Standard 6.3 in the Domestic Technical Handbook.

38. https://beta.gov.scot/policies/home-energy-and-fuel-poverty/energy-efficiency-in-social-housing/

39. New build will not have any significant impact on the number of dwellings with an EPC below D. While building regulations do not prescribe a minimum EPC, the level of energy efficiency requirements prescribed in the standards means that the number of new dwellings with an EPC below D is likely to be negligible.

40. These results are reported relative to the year in which dwellings are upgraded. Because it is assumed that costs and benefits will grow in line with inflation, in real terms average costs and benefits measured in today's prices will be unaffected by when the dwellings are upgraded. However, given that it is expected that dwellings will be upgraded in different years, net present values will be slightly lower than presented in the table if they were to be expressed relative to a 2020-21 base, due to discounting.

41. Annual emissions abatement is similarly presented on the basis that all the stock is upgraded in the base year. Given that dwellings are expected to be upgraded over time, the abatement represents the annual savings when all the dwellings have been upgraded. Note also that abatement is calculated using SAP 2012 emission factors. Annual abatement in the future will therefore be different to the extent that these emissions factors change over time.

42. As discussed above, for dwellings with an initial EPC of F or G, the costs could be somewhat higher if landlords choose to upgrade in stages, rather than choosing the least-cost package of raising their dwellings directly to a D.

43. The independent research did not model the impact of imposing a cost cap. The costs and benefits will therefore be somewhat lower than presented above. However, the difference will not be large, given that only 7% of the dwellings will be affected, and these dwellings will have to install measures within the cost cap, which means the overall impact on estimated costs and benefits will be significantly less than 7%.


Contact

Email: denise.buchanan@gov.scot