Green Heat Finance Taskforce minutes: March 2022

Attendees and apologies

Attendees

• Sara Thiam, Scottish Council for Development and Industry (Meeting Chair)
• Patrick Harvie MSP, Minister for Zero Carbon Buildings, Active Travel and Tenant’s Rights
• Kirsty Hamilton, Independent 
• Sandy Macdonald, Scottish Financial Enterprise 
• Ingrid Holmes, Green Finance Institute 
• Eddie McAvinchey, Scottish National Investment Bank 
• Ian Cochran, Edinburgh University Business School/Institute for Climate Economics 
• Helen Melone, Scottish Renewables 
• Rufus Grantham, Bankers Without Boundaries 
• Simon McWhirter, UK Green Building Council Scotland 

Secretariat

• Lorraine King, Scottish Government, Heat in Buildings Division
• Ragne Low, Scottish Government, Heat in Buildings Division
• Carole Stewart, Scottish Government, Heat in Buildings Division
• Toby Tucker, Scottish Futures Trust, Net Zero Team
• Michelle Rayneard, Scottish Government, Heat in Buildings Division

Items and actions

Welcome and apologies

The Chair welcomed all members to the meeting. Apologies were received from Lewis Shand Smith and Andy Kerr.

Summary note and actions points from previous meeting, including member notification of any conflicts of interest

The note of the previous meeting was approved by all members present. No conflicts of interest were declared. The Chair reminded members that they were welcome to raise any potential conflicts of interest as the meeting progressed.

Scottish building sectoral data

The Secretariat presented slides to the group on Scottish building data. The group held a discussion which is summarised below:

• installation and equipment costs were discussed as well as the possibility that equipment costs may reduce over time provided supply chain capacity can be built  
• the group acknowledged that a range of costs is inevitable
• the scale of the challenge means we need to get more efficient at delivering retrofit
• consideration should be given to the difference between EPC and net zero due to consistency issues
• fabric first measures followed by zero emission heat installation may not materially change energy costs
• the importance of occupant behavior in reducing energy use is a key factor
• consideration must be given to how to generate returns from investment
• it was noted that Scotland has great potential for air source heat pumps and demand aggregation will help to keep costs down

Action 1: Secretariat to circulate presentation slides to members

Taskforce work plan and engagement strategy

The Secretariat presented an overview of the topics and priorities in the taskforce work programme and for wider stakeholder engagement which is summarised below:

• May 2022 meeting, owner occupiers and private rented sector
• July 2022 meeting, tenements and multiple occupancy/multiple use buildings
• September 2022 meeting, social housing
• November 2022 meeting, non-domestic buildings and small to medium enterprises
• January 2022 meeting, area and place based delivery, including LHEES and Local Authorities

Members committed to support future discussions including with commercial and industrial stakeholders. The importance of considering both individual building owner and place based financial solutions was discussed.

Financial mechanisms for the owner occupier sector

The Secretariat facilitated a discussion on mechanisms identified as having potential to develop for the owner occupier sector. The group held a discussion on key challenges and opportunities in this sector:

• the connection to house prices and the ability to deliver energy investment without impacting affordability is recognised as a key challenge
• a PACE (property assessed clean energy) model was discussed, where the lending is linked to the property, not the individual who owns the building
• the need to look at what the motivations are of the users who will access these financial solutions was highlighted
• the importance of taking cognisance of the lessons learned from the Green Deal and Green Heat Grant was recognised
• the group highlighted the importance of creating demand for financial mechanisms, there are mechanisms out in the marketplace now for energy efficiency works but there is low take up
• members also pointed out that any financial solutions implemented must be cognisant of the need for a just transition

Action 2 : Secretariat to provide a summary paper of lessons learned from the Green Deal and the Green Heat Grant.

Any other business and date of next meeting

The Chair thanked members for their participation. The next virtual meeting to be held on 4 May 2022.