Heat and Energy Efficiency Technical Suitability Assessment (HEETSA): scoping consultation

2. Why HEETSA is needed?

Summary

We believe HEETSA is needed in order to meet our objective to safeguard consumers by developing a technical suitability assessment which ensures building owners understand what are the ‘right’, technically suitable, measures and what would be the ‘wrong’, technically unsuitable, measures when improving their energy efficiency and changing their heating systems.

The market for retrofit assessment (beyond the limitations of the EPC) has grown significantly in the past decade. The Scottish Government now wants to test stakeholder views on the role that government could play in ensuring that these more detailed forms of assessment meet consumer needs as part of the significant increase in installation of measures which we expect to see over the next two decades as we move towards net zero and tackle fuel poverty, driven by proposed mandatory energy efficiency standards for the private rented sector, and government decarbonisation targets in the Heat in Buildings Bill.

Introducing a government-backed scheme would not remove consumer choice in the market, but would provide additional safeguards, for those consumers who wished to have them, of the assurance of government-backed methodologies and practitioners who were required to operate to government specified quality standards. The results of a HEETSA could be used by consumers to support their eligibility for government funding programmes, lenders’ products, or to evidence compliance with / exemption from regulatory standards.

2.1 Current Approach to Retrofit Assessment in Scotland

a) Role of Energy Performance Certificates

EPCs are a long-established and integral part of the property market in Scotland, and indeed across the rest of the UK and the EU. They originated in the EU’s Energy Performance of Buildings Directive, which specified the requirement for member states to ‘lay down the necessary measures to establish a system of certification of the energy performance of buildings… in order to make it possible for owners or tenants of the building or building unit to compare and assess its energy performance’^[11].

As a result of the EU requirement to allow comparison between buildings, EPCs have therefore always had to ensure a large degree of standardisation in the assessment process, to allow building owners, tenants, and prospective purchasers to compare properties constructed in very different ways, time periods, or geographies and climates. That standardisation has allowed a system where large parts of the assessment process contain assumptions about different features of the building’s construction and therefore its energy performance. It means that consumers receive consistent information via a series of ratings which show the building’s current energy performance, and potential energy performance if they were to act on a series of recommendations.

The EPC’s ratings, and the recommendations for improvement, are based upon a visual survey by the assessor, and then largely automatically generated by the assessment software. They do not assess the actual condition of the building, nor do they rely on an invasive survey (e.g. borescope checks as to whether or not a cavity wall has actually been filled with insulation, or the condition of insulation within the cavity). Instead, they seek visual evidence of changes that have been made (i.e. boreholes indicating cavity wall injection, or loft inspection for insulation), or make assumptions that the building met the building regulations in place at the time. The EPC is therefore a relatively basic assessment, which will not account for some building-specific factors that affect a building’s energy performance (such as condition).

The Scottish Government’s Response to its 2023 EPC Reform consultation recognised the limitations of this standardised approach. EPCs are well-embedded and recognised by consumers as part of the Home Report and property listings process, but the details within them are often not well understood. Our reforms aim to improve them through introducing a new rating system which gives more relevant information, and through improving user accessibility and understanding through a redesign of the certificate and how information is presented.

The Scottish Government is confident that these reforms will make EPCs fit-for-purpose in providing basic, standardised information to consumers on the energy efficiency of their property, and the emissions impact of its heating system, as we move forward on the journey to net zero.

For many buildings, the information on the EPC will give current and prospective building owners and tenants the basic evidence they need to understand or demonstrate whether or not their property would comply with proposed mandatory energy efficiency standards or Scottish Government targets for moving to clean heating systems. For example, a rental property which was rated at Band C on the reformed EPC’s Heat Retention Rating would be deemed to have met the proposed PRS MEES; or a house whose Heating System Rating was ‘Clean’ because it was heated by electric storage heaters or a heat pump would already support the Scottish Government target to move to clean heating by 2045.

There will be many buildings, however, where the EPC’s Heat Retention Rating will fall below Band C, or which record the Heating System Rating as ‘Polluting.’ In those circumstances, building owners will want to understand what potential improvements they could make to their building’s performance or what alternative non-polluting heating systems they could install.

The EPC will offer information on what potential improvements could be made, such as to insulate the loft, and will set out the emissions, efficiency and running costs of non-polluting heating systems in an objective manner. That basic information will help consumers to begin to understand the changes that could be made to their building, but we recognise that the EPC can only ever be a ‘first step’ to help signpost potential improvements that could be made to a building’s fabric or to its heating system. This is because the potential improvements suggested will ultimately continue to be generated by standardised assumptions within the EPC calculation methodology, which don’t take account of the building’s unique characteristics and condition, nor the behaviours of its occupants.

We believe that those assumptions, and the order in which particular improvements are suggested on the EPC, will be improved through the enhanced capabilities of the new UK Home Energy Model and through the expert advice we have received on the ‘logic’ by which particular measures are suggested, to ensure they are consistent with the requirements of proposed regulatory standards. But they are, ultimately, not a substitute for detailed, bespoke, professional retrofit advice on what is suitable for the actual building.

The EPC will therefore contain clear information which advises consumers to always seek further professional expertise before moving to install a measure. In many cases, consumers will wish to seek a further, more detailed assessment before contacting potential installers.

During the EPC Reform and Heat in Buildings Bill consultation, and in the independent research report on the scope of HEETSA^[12], we heard significant concerns from stakeholders about the impacts of building owners installing the ‘wrong’ measures. This includes cases seen in the media around the detrimental impact of things like spray foam insulation in some circumstances, and defective external wall insulation. We want to ensure that building owners have access to information that helps them make informed decisions about the installation of measures.

b) Existing Retrofit Assessment Approaches

The market for this additional ‘retrofit assessment’ has grown considerably in Scotland and across the UK over the past decade. A range of new methodologies and qualified experts have emerged to meet the increased demand for more detailed assessment beyond the standardisation of the EPC.

This growth has in some cases been commercially driven by installers seeking to increase uptake of new clean heating products or new insulation measures. In others it has been driven by professional institutes seeking to enhance their assessment offering to the market, such as the RICS: Residential Retrofit Standard, Passivhaus EnerPHit Standard or the AECB Retrofit Standard.

It has also been driven by government in response to independent reviews such as the Each Home Counts review into major failings of the 2010-2015 UK Government’s Green Deal programme, which led to the creation of the Trust Mark scheme to ensure greater quality assurance of installers, and to the creation of the PAS:2035 and PAS:2038 standards for retrofit. The recent BS40104 has emerged as an additional response to enhance PAS:2035.

The Scottish Government has itself received independent recommendations in reports from 2019 and more recently in 2025, on the need to establish greater government oversight of the emerging retrofit assessment market (see section 2.1(d), below).

We welcome the growth and evolution of this market as a response to the increased demand for more detailed assessment and advice on which measures are technically appropriate for a building. We want the market to continue to be able to grow and evolve. We do recognise, however, that there may be, in some cases, potential conflicts of interest between the commercial interests of businesses seeking to promote or install particular fabric measures or heating systems, and the need for a genuinely independent, impartial assessment^[13].

The Scottish Government is therefore seeking views on the need for a government-led approval and accreditation mechanism to provide oversight to the market. This would allow Ministers to approve different methodologies and to accredit different assessor organisations as being suitably qualified and skilled to undertake detailed technical suitability assessments (this is exactly the same approach taken for oversight of EPC methodologies and assessors).

We would not seek to curtail or constrain the development of the wider market, unless there was evidence that full oversight was needed. Rather, our approach would be for HEETSA to act as a ‘government-approved’ mechanism, which could endorse a range of existing methodologies and assessor skills, in the same way that MCS acts to approve particular renewable heat installers or TrustMark acts to accredit particular energy efficiency installers. In both those cases, businesses remain free to operate outside of those accreditation schemes, but in some cases participation within them is a requirement of government funding and delivery programmes^[14]. This is also already the case in the retrofit assessment space where Scottish Government programmes such as Warmer Homes Scotland align with the PAS:2035 standard.

We think these sorts of existing approaches, alongside the existing approvals / accreditation process for the EPC market, offer a model for HEETSA to provide a greater level of government-led quality assurance within the growing retrofit assessment market.

c) Understanding the current state of the retrofit assessment market

In order to understand the evolution and current state of the retrofit assessment market beyond the EPC, the Scottish Government worked during 2023-24 to test expert stakeholder views. This pre-discovery phase work has moved in three stages:

1. Initial high level conceptual proposals for HEETSA set out in the consultation on a Heat in Buildings Bill (November 2023)^[15]

2. Expert stakeholder workshop to test and refine initial conceptual scope of HEETSA (July 2024)

3. Independent research report to review the design of HEETSA (led by a consortium from Glasgow Caledonian University, Robert Gordon University, Carbon Futures and Bield Housing & Care) (published, May 2025)^[16]

The independent research report specifically assessed the current state of the retrofit assessment market (the methodologies currently available, gaps in those methodologies, the skills and qualifications needed, and market readiness). This research found that:

• The current retrofit market for clean heating and energy efficiency measures is supported by a range of methodologies (set out in Annex 1). These include approaches such as PAS 2035^[17], PAS 2038^[18], the RICS Residential Retrofit Standard^[19], Passivhaus EnerPHit Standard^[20], the draft BS 40104 (in development)^[21], Historic Environment Scotland’s Guide to Retrofit of Traditional Buildings^[22], and in the wider paid market, services being developed by e.g. Go Renewable and Ecofurb.
• These methodologies already meet many of the objectives and aims for HEETSA outlined above, but most of them have limitations – in particular around comparing suitability of heating systems, assessing tenements, or being able to address the specific characteristics of traditional and protected buildings.

The report concluded that:

• “The current assessment market for retrofit projects has significant gaps in evaluating the technical suitability of clean heating and energy efficiency measures.”
• “There are a range of existing methodologies which attempt to go beyond the Energy Performance Certificate (EPC), many of which could be a foundation for a HEETSA, but none of them in isolation could fully support the overarching aim of HEETSA.”

The research also pointed to skills gaps affecting the capacity to offer advice, knowledge and gaps affecting the breadth of methodologies, and low levels of public trust and confidence towards the retrofit assessment market through well-publicised problems with parts of the installer market.

d) Recommendations from the Independent Review

The independent review report contained a number of recommendations, as follows:

• For current methodologies, ‘assessment of clean heating and energy efficiency strategy delivered under HEETSA should thus include:

• Centrally defined operating framework based on real data, recognising building condition and human behaviour.
• Funding aligned to value of quality and long term effectiveness of measures.
• Methods of safeguarding of customer journey supported by competent workforce (designers, assessors, and installers).’

• For gaps in current methodologies, ‘the focus of HEETSA… should therefore be:

• Ability to compare options while considering occupant behaviour, lifecycle impact and mandating Post-Occupancy Evaluation (POE)
• Address current data gaps precluding adequate assessment of communal heating and alignment with Local Development Plans and Local Heat & Energy Efficiency Strategies
• Provide means of independent verification of expertise, training and public awareness addressing knowledge gaps limiting successful customer journey
• Develop a decision-making tool allowing for integration and evaluation of existing methodologies best suited to deliver intended long-term retrofit outcomes.’

• For skills and qualifications:

• ‘Supporting the provision of degrees accredited by the professional associations, and doing more to encourage young people to take them (accepting that the benefits of this will take several years to accrue).
• Enabling adults and professional learners to engage with the growing market for non-traditional learning providers, with their greater focus on andragogy-based learning (adult learning methods, as opposed to pedagogy-based methods designed for children and younger people).
• Understanding the value of enabling professionals to engage with communities of practice, and instilling this in employers.
• Breaking down the emerging role of ‘retrofit coordinators’ into more discrete roles to enable more people from built environment-adjacent fields to transfer into them, to use their expertise to enable more successful retrofit projects, and in turn to empower householders and help rebuild consumer trust and confidence. This differentiation reflects the different, but complementary, skillsets that need to be applied to retrofit projects, and recognises the higher technical knowledge requirements for assessors.’

• For market readiness, ‘there are steps that could be taken to build the retrofit market and rebuild confidence and trust among the public and those involved in delivering retrofit projects:

• Working across policy silos (including within the built environment, energy, and public health) to do more to align retrofit policy and regulation with areas such as the Building Standards, building warrants, and communal and district heating.
• Tackling the skills shortage (see Objective 3).
• Tackling conflicts of interest, and improving consumer protection, complaints handling, and redress.
• Recognising that there is no standard retrofit journey, and designing retrofit policies to capture all possible entry routes and motivations (or lack of them) for undertaking retrofit projects.
• Recognising that enabling successful retrofit projects, and doing so equitably, will be vital to enabling a just transition, and doing more to align the design and delivery of government policy and regulation with this broader goal in mind.’

The Scottish Government is reflecting on these recommendations and welcomes further comment as part of this Scoping Consultation as we develop more concrete proposals for HEETSA.