Equity loan scheme - call for evidence: consultation

The equity loan pilot has delivered energy efficient and zero emission heating solutions to eligible homeowners since its inception in 2017. We now wish to consider the potential to develop the pilot as part of the suite of support schemes for the decarbonisation of Scottish homes.

Chapter 3 Net – Zero Policy Context

3.1 From the experience and feedback received to date, the Equity Loan has demonstrated the potential to deliver against the policy priorities as set out in the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019, including the targets of net zero greenhouse gas emissions by 2045, with interim targets of a 75% reduction by 2030 and 90% by 2040, through providing a financial mechanism to enable the installation of eligible renewable technologies and energy efficiency measures in households where access to other forms of financial support are challenging.

3.2 The target of no more than 5% of homes in fuel poverty by 2040 as set out in the Fuel Poverty (Target, Definition and Strategy) (Scotland) Act 2019 is also supported as some Equity Loan customers may not have been eligible for commercial loans and therefore would not have been able to improve the fabric of their homes and reduce their heat demands without this equity loan offering.

3.3 The Scottish Government's Housing to 2040 strategy commits to introduce legislation in the next Parliament for phased introduction from 2025-2030, to implement a new Housing Standard which will align with work to tackle emissions from homes, representing a shift towards greater partnership between Government and home owners and still rooted in the responsibilities home owners have for the repair and maintenance of their properties.

3.4 Aligning with both Climate Change and Fuel Poverty Legislation, the draft Heat in Buildings Strategy commits to reducing emissions from the way we heat our buildings over the next decade and to reach net zero by 2045. By 2025, where it is within our legal competence, a framework of regulations setting clear standards for property owners across all tenures and buildings types, building upon existing standards already in place and requiring action on energy efficiency and zero emission heating will be brought forward. These targets are far reaching, necessitating the involvement of all property owners. The continuation and expansion of the Equity Loan has potential to support these policy objectives the Equity Loan product is currently providing an important route for homeowners who have minimal liquid assets to install energy efficiency measures and low/zero emission technologies as part of our suite of support measures to deliver the outcomes set out in the Heat in Buildings Strategy.

3.5 The draft Strategy estimates that the total cost of converting all Scotland's homes and non-domestic building stock to net zero emissions by 2045 will be in the region of £33 billion. Whilst public funding will be part of the solution, investment from individuals through mechanisms, such as the Equity Loan, will be an essential financial tool which will support the decarbonisation of homes .


4. What is your view on the contribution a nationwide Equity Loan Scheme focused on both energy efficiency and decarbonised heat solutions can make towards supporting our climate change and fuel poverty targets? Please explain your answer.

5. Please provide your views on the proposal to expand the Equity Loan Pilot to a full nationwide support scheme, please explain your position.

6. Do you have a view on which energy efficiency measures and zero emission heating solutions should be included in the list of eligible measures? Please explain your position.


Email: heatinhomesequityloan@gov.scot

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