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

3. Proposed approach to HEETSA

Summary

We are seeking stakeholder views on our initial conclusions, based on the independent review’s recommendations, on how HEETSA would work. We propose that a HEETSA delivery model would act to oversee (or regulate) the retrofit assessment market through:

• provision of a government-approved methodology (or a prescribed process implemented through government approval of third party methodologies) that provides assurance that the provision of technical advice on suitable retrofit measures is separated from commercial interests;
• specification of government-approved professional standards for the skills and qualifications of retrofit assessors, to ensure they operate impartially to the highest standards (or government approval of third party skills frameworks);

We are also seeking stakeholders’ views on when HEETSA would be needed. We think that there are a range of specific circumstances in which HEETSA could be needed, to help support proposed legislation and regulations for clean heat and energy efficiency.

We also welcome views from stakeholders on whether a standardised certificate or report for HEETSA is needed and what the benefits or challenges could be in this.

How HEETSA would work

Key to the success of HEETSA is that the system is designed to be trusted, reliable and purposeful. This will require knowledgeable building professionals who will take a forensic approach to the determination of measures suitable for a building, accounting for its condition, its context, and the way that building is used and occupied.

The Scottish Government believes that the system currently used to ensure that EPCs are prepared consistently and to meet quality standards offers an existing, tried-and-tested model that could be extended to the wider retrofit assessment market – whilst doing so in a way that moves beyond the acknowledged limitations of the EPC. Our initial preference is to replicate the following three features used in the EPC system:

• government approval of methodologies
• government approval of professional standards (skills / qualifications)
• government specification of the format for certification / reporting results of the assessment

We are also exploring whether to include a fourth feature also used in the EPC system:

• government specification of the circumstances in which an assessment is required (see section 3.4, below)

Below, we set out our initial thinking on how HEETSA would work, and seek stakeholder views to help us scope this.

3.1 Methodologies

a) Assessing the Building

The Scottish Government has a clear aim to ensure that all building owners have a trusted and recognised route to access the highest quality assessment of the technical suitability of their buildings to receive clean heating systems and install energy efficiency measures (including situations where it would not be appropriate to do so). We want to ensure that building owners install the ‘right’ systems and measures, and avoid installing the ‘wrong’ ones – and avoid any unintended consequences when doing so. A technical assessment can provide a vital ‘second step,’ beyond the EPC, in protecting consumers on the journey to net zero.

We recognise that the assessment industry has worked hard over the past decade to develop a range of tools and methodologies to meet the demand for more bespoke assessments beyond the EPC. These tools, such as PAS 2035, EnerPHit, the RICS Residential Retrofit Standard, and BS40104 (among others) each seek to provide elements of standardisation and quality assurance to the assessment process.

These are welcome developments which provide a solid foundation upon which HEETSA could be built, but the methodologies are not yet comprehensive, with important gaps, for example:

• existing methodologies that can assess the suitability of fabric energy efficiency measures, but cannot assess the suitability of clean heating systems;
• a lack of methodologies that can make assessments of the ‘optimal’ balance between energy efficiency measures and clean heating systems (i.e. highly insulated building with low temperature clean heating system, or less insulated building with high temperature clean heating system);
• no known methodology to assess individual vs communal heating system suitability in mixed ownership and multiple occupancy buildings such as tenements;
• no known methodology to assess communal or ‘whole building’ energy efficiency measures in mixed ownership and multiple occupancy buildings such as tenements;
• a need for holistic appraisals of both energy efficiency and heating system options for traditional and protected buildings.

Having reviewed the range of existing and emerging retrofit assessment methodologies such as, the independent review for the Scottish Government concluded that:

• “Currently used methodologies often produce generic recommendations, lacking solutions tailored to individual buildings and without sufficiently recognising critical factors like building condition, moisture risks, and long-term effectiveness. Additionally, limited assessor expertise and inconsistencies in assessment outcomes dependant on use of particular methodologies highlight the need for standardized, detailed processes incorporating site visits, consideration of climate and location specific data, and independent assessments”;
• “The current assessment market for retrofit projects has significant gaps in evaluating the technical suitability of clean heating and energy efficiency measures. Individual assessment methodologies lack granularity, ability for comparative evaluation of options, further impaired by knowledge gaps and public scepticism”;
• “HEETSA needs to become a standardised approach that allows for general, comparative assessments, but can also accommodate the complexities of historic and traditional buildings with consideration of location-specific environmental differences and climatic predictions.”

We accept these conclusions and recognise that a technical suitability assessment methodology needs to cover two important phases, akin to both the ‘retrofit assessment’ and ‘retrofit design’ stages of PAS 2035 – i.e. a) ‘assessment of dwellings for retrofit’; and b) ‘identification and evaluation of improvement options (energy efficiency measures)’ in PAS 2035.

We recognise that the inclusion of both assessment of the building, and the identification and evaluation of improvement options, broadens out the meaning of ‘retrofit assessment’ to include the ‘retrofit design’ stage within the same process. The Scottish Government believes that such a process would ensure that HEETSA operated on the same basis as an EPC – that it included both an assessment of the current building and included suggestions for potential improvement options – but to a much greater level of technical detail and confidence in HEETSA than within an EPC.

We therefore propose that a technical suitability assessment methodology needs to include the following elements:

• Identification of the current state of elements within a building, covering both:
  • building fabric (i.e. the building’s age, construction type, insulation status, condition, ventilation, moisture risks and climate) and
  • heating system (i.e. the building’s primary and secondary heating system, radiators, pipework, thermal controls, hot water storage);
• a method for comparative assessment of technically suitable options, on a consistent basis, for:
  • energy efficiency measures (including predicted energy savings, installation costs, payback periods) (including those not suitable);
  • clean heating systems (including predicted emissions reductions, installation costs, running costs) (including those not suitable);
• a method for comparative assessment of the optimal balance between:
  • energy efficiency measures and clean heating systems (where relevant) in consultation with the occupants;
  • individual unit and ‘whole building’ energy efficiency measures in tenements;
  • individual unit clean heating systems vs ‘whole building’ communal clean heating systems in tenements or other groups of building unit, where appropriate;
• identification of any risks or barriers to retrofit measures such as:
  • building condition, moisture, and ventilation risks (and how these can be overcome);
  • traditional and protected building conservation / listing rules and requirements;
  • occupant behaviour
  • in consultation with the occupants where relevant

We envisage HEETSA being able to follow a standardised series of steps through which all properties would go, during their assessment and subsequent reporting / certification, as set out in the diagram below. Assessments would all follow the same steps, but the methodology used at each of those steps could differ, so long as it covered the range of issues required to be considered in each step. This would result in a standardised overall process, where different methodologies could be approved by government for meeting the requirements of each step.

The diagram below sets out broad steps as:

- entry stage – building owner or tenant requests a technical suitability assessment, or it is required as a condition of a funding programme or regulation

- screening and strategic assessment stage – determines the circumstances and which aspects need to be covered, and which do not; strategic context for the building (including Local Heat & Energy Efficiency Strategies, Heat Network Zones, Local Development Plan, planning or heritage policies which may shape or constrain which measures are appropriate for the building (e.g. conservation area, listed building)

- methodology assessment stage – the various modules that need to be followed in the assessment – two of which would be ‘core’ (insulation and individual heating modules) and some of which would be optional, depending on the circumstances (such as assessment of communal heating and whole building measures in tenements or assessment of a traditional and protected buildings module for those in that category)

- reporting / certification stage - exit stage (standardised reporting of findings from HEETSA using standardised headings, ratings, recommendations for improvement, allowing comparison between different properties)

HEETSA assessment commissioned

Screening and Strategic Assessment Stage

- Assessment of relevant modules

- Review of LHEES, Local Development Plan, local planning policies (heritage designations, conservation areas, listed buildings, permitted development etc)

Insulation Module

- Condition of current building fabric

- Indications that installation may cause or exacerbate condensation or mould

- Assessment of installation costs and payback periods

Heat Networks / Communal Heating Module

- Condition of current building fabric

- Assessment of building space or logistical constraints

- Assessment of existing emitters and pipework

- Search for planned Heat Networks and LHEES

- Assessment of installation costs and payback periods

Whole Building Assessment Module

- Condition of current building fabric

- Assessment of opportunities / constraints for whole building measures

- Assessment of installation costs and payback periods over whole building / multiple dwellings/units

Traditional & Protected Buildings Module

- Condition of current building fabric

- Assessment of opportunities / constraints relating to T&P status

- Assessment of installation costs and payback periods

Occupancy Assessment

Evaluation Planning

Standardised HEETSA Report Issued

Mandatory Module

Project specific module

The diagram above is illustrative of the modular approach we think HEETSA would take. For instance, it shows that a Whole Building Assessment could be undertaken for a tenement or other groups of building unit where this is appropriate. It does not capture all elements that HEETSA would assess.

We are seeking stakeholders’ views on the range of elements identified which we believe need to be covered by HEETSA, and whether any elements are missing or would not be appropriate.

We are also seeking stakeholders’ views on how to fill any of the gaps identified in the above typology and in the independent review.

b) Accounting for Occupants

In stakeholder responses to the EPC Reform and HiB Bill consultations, we heard often that EPC assessments fail to take account of occupant behaviours. To address this for EPCs, our Government Response to the 2023 consultation sets out our intention to develop a new interactive user interface which will allow consumers to input information on variables such as preferred room temperature, frequency of hot water use for bathing, number of occupants in the building, hours when heat is required, and so on.

We recognise that, similarly for HEETSA, it will likely be important for a technical suitability assessment to take account of the behaviour of the occupants. This is particularly important when assessing issues such as moisture risk and ventilation, (which can be influenced by occupant behaviours such as drying clothes within the building, or steam generated when bathing); or the number of occupants within the building and their patterns of hot water and heating use (to advise on the most appropriate type of system).

The independent review recommended that: “HEETSA recommendations should also take into account the circumstances and needs of occupants by including interviews with householders as part of designing retrofit projects.”

An occupancy assessment was developed and used for the Green Deal as an additional source of evidence alongside the EPC when making the Green Deal Recommendations Report and could potentially offer some lessons on a way forward.

We are seeking stakeholder views on how best to ensure that HEETSA can take account of occupant behaviours.

c) Process for approving a HEETSA methodology

The Scottish Government recognises that the range of existing retrofit assessment methodologies already cover many, though not all, of the elements that we think will be necessary for HEETSA. Our initial preference would be for the Scottish Government to, wherever possible, be able to approve or endorse these existing methodologies as meeting the requirements of HEETSA, or of particular elements of HEETSA.

The process we envisage would be along the lines of:

• SG issues guidance or regulations specifying the requirements of HEETSA
• SG issues invitation to the market to seek approval of retrofit assessment methodologies to meet agreed requirements for HEETSA;
• third parties submit applications to SG seeking approval of their methodologies;
• SG confirms that the methodology has been approved for use in assessing technical suitability;
• SG would periodically re-assess existing methodologies and invite new applications; third parties would also be able to seek approval at any time

This process is similar to the one which currently exists for approval of the calculation methodologies for EPCs, in that government specifies the requirements for a methodology, the market develops this, and then government approves / adopts it as the legal basis for producing an EPC (i.e. SBEM for non-domestic buildings or RdSAP for existing domestic buildings).

The main difference to the approach taken for EPCs is that we propose to allow multiple retrofit assessment methodologies to be approved by government. There are several ways that we could do this:

• approve multiple methodologies which cover all aspects of HEETSA (i.e. ‘comprehensive’ methodologies that can assess technical suitability of energy efficiency measures and clean heating systems in all buildings);
• approve multiple methodologies which cover particular aspects of HEETSA (i.e. ‘specialised’ methodologies that can assess technical suitability of energy efficiency measures only; or clean heating systems only; or which assess ‘whole building’ energy efficiency measures and communal heating systems in tenements; or which only assess traditional and protected buildings);
• procure methodologies which the market has not yet provided, which would be owned by the Scottish Government (i.e. for the assessment of whole building measures in tenements or to account for the specific needs of traditional / protected buildings)

We want to strike the right balance between allowing the retrofit assessment market to continue to grow and evolve, whilst at the same time ensuring consistency and quality assurance. This is a similar approach to the one used for quality assurance schemes such as MCS, with government approval of providers giving consumers assurance around quality and any issues of redress.

These schemes do not prevent other providers from installing renewable heating systems or fitting energy efficiency measures, but offer consumers additional protections. Requiring these additional protections might become a condition of particular government regulations or funding programmes which currently rely on schemes such as MCS or Trustmark as a condition of eligibility. We are exploring whether HEETSA might be used in the same way (see section 3.4).

We are seeking stakeholder views on our suggested approach of the Scottish Government approving the methodologies we think are needed for HEETSA.

3.2 Skills & Qualifications

The Scottish Government has a clear aim to ensure that the assessors undertaking technical suitability assessments are properly skilled, qualified, and capable of offering technical advice. We want to ensure that assessors operate to the highest professional standards and can be trusted to make clear recommendations on what are the ‘right’ systems and measures to install, and to exclude the ‘wrong’ ones.

Assessors therefore need to possess technical expertise and be suitably qualified to be able to undertake the assessment and make recommendations on which measures and systems are appropriate, and which are not. This will involve not only expertise and skill in working with HEETSA methodologies, but also the ability to engage with, and understand, the needs and behaviours of the building owners and occupants, to ensure that recommendations are applicable.

We recognise that the range of skills and qualifications available in the retrofit assessment market has developed considerably over recent years. Following the Each Home Counts review of the UK Green Deal, the industry developed PAS2035^[23] and PAS 2038, and more recently, BS40104, in response to the review’s recommendations on the need for a quality mark to:

• ‘provide confidence in the suitability of recommended energy efficiency and renewable energy measures made through a consistent and more complete assessment of the property’^[24];

The review also advocated for ‘better use of property assessments,’ since ‘often assessments do not consider fully the suitability of a particular measure for an individual property when making recommendations, or take into account the interaction of the proposed measure with the building or existing measures. Assessments remain an important tool, but more is needed to ensure they are done in a consistent and accurate way, at appropriate times, and take into account the whole building’. The review saw this recommendation for ‘better use of property assessments’ being met by ‘integration of a holistic property consideration approach into standards and training, and integration of assessment information into the Data Warehouse.’

PAS2035 and PAS2038 are now well established within the market, and PAS 2035 has been recently updated. PAS 2035 defines the role of a ‘retrofit assessor’ as a ‘person qualified to carry out a retrofit assessment’, and then sets out specific requirements in terms of skills and qualifications needed:

• ‘a Retrofit Assessor shall be a domestic energy assessor certified and registered by an assessor body, or who is working towards such certification and registration via a recognised Recognition of Prior Experience and Learning (RPEL) process or via a training course that appears on the register maintained by Ofqual (for England), the Council for Curriculum Examinations and Assessment (for Northern Ireland), the Scottish Qualifications Authority (for Scotland) or Qualifications in Wales (for Wales), or a RICS registered surveyor (AssocRICS, MRICS or FRICS)’.

PAS 2035 also specifies additional qualification requirements for retrofit assessors working with traditional buildings, which in Scotland would be ‘Scottish Level 6 Award in Energy Efficiency Measures for Older and Traditional Buildings’ (though notes that this qualification has now been withdrawn).

The independent review for the Scottish Government assessed what skills, roles, qualifications, and quality assurance standards would be necessary to meet the objectives of HEETSA.

It made the following conclusions:

• “Qualifications and Training: Meeting HEETSA’s objectives will require utilising and expanding the full range of current qualifications and training opportunities.”
• “Independence and Impartiality of Advice: The complex nature of the retrofit market means the risks of biased advice need to be addressed by policymakers.”
• “Retrofit Assessors should be independent and regulated to ensure unbiased recommendations tailored to each property’s needs rather than commercial interests, and to safeguard consumers by ensuring assessors are sufficiently skilled to produce high quality retrofit plans.”
• “The Scottish Government should thus invest in upskilling programmes to ensure assessors are well-qualified, including having sufficient knowledge of evaluating heat and hot water systems, and an understanding of communal / district heating systems.”
• “Quality Assurance and Codes of Conduct: Poor quality installations currently blight the retrofit market… this needs to be addressed through a range of measures, including measures such as requiring all those involved in delivering retrofits to have appropriate and sufficient public indemnity insurance; regulating to improve customer complaints handling and redress processes.” “We also found substantial support for a Code of Conduct, which could be introduced to be specific to HEETSA.”
• “The Roles and Requirements of an Assessor: Assessors are clearly defined roles, in that specific qualifications and certifications are required to become an assessor for any given standard or regulation. If, as we are recommending, the needs of HEETSA cannot currently be met by a single standard or assessment method then the role and requirements for a HEETSA assessor become self-explanatory. I.e., the person(s) managing a HEETSA-based retrofit identify the most appropriate standards and assessments, which directly dictate the necessary qualifications and requirements to meet those needs.”

The independent review also set out diagrammatically where a retrofit assessor could be situated vis a vis other roles in the retrofit journey, suggesting that this would be similar to the PAS 2035 requirements outlined above. The Scottish Government views Stage 1 and Stage 2 of the suggested approach in the diagram below as akin to parts a) ‘assessment of dwellings for retrofit’; and b) ‘identification and evaluation of improvement options (energy efficiency measures)’ in PAS 2035 – i.e. the ‘retrofit assessment’ and ‘retrofit design’ stages. This would mean a HEETSA assessor being appropriately skilled and qualified to undertake an assessment of both: 1) the current state of the building and 2) identifying and evaluating improvement options for energy efficiency measures and clean heating systems, which would lead to clear recommendations on which were suitable and which were not.

The graph depicts stages and roles of HEETSA delivery model. First from the left is the Retrofit advocate – first contact with customer, initial information gathering, identifying customer needs. Next box reads: Retrofit coordinator appointed. This has an arrow leading to clarification of the role and responsibility reading: Similar to PAS2035 requirement, oversight of the process and key person understanding HEETSA process, supported by technical oversight from independent assessor. Next role is divided into two stages and the combined role description at the top of the graph reads: Independent retrofit assessor. Can be the same person for stage 1 and 2. Skills will vary, and stage 1 assessor must be skilled in undertaking suitable surveys (borescope, moisture, thermal imaging, airtightness), where stage 2 assessor should be suitably skilled to follow identified methodology (variety of current methodologies, for example PAS2035, supported by adequate tools such as WUFI calculation and HEM assessment). Independent retrofit assessor is responsible for two Retrofit Assessment stages. Stage 1 Retrofit assessment: on site – methodology options proposed based on detailed building survey, location and context. Stage 2 Retrofit assessment: confirmed methodology and undertake desk-based simulations and evaluation enabling design. Next step in HEETSA delivery model reads: Retrofit assessment concluded – pass on to retrofit designer.

Source: Independent Review of HEETSA^[25]

The Scottish Government recognises that there are a range of existing qualifications and RPEL processes which already exist and which could together cover many of the proposed dimensions of HEETSA. We also accept the conclusion of the independent review that this is likely to require further expansion, particularly to address some of the gaps identified in methodologies outlined in section 3.1(a), such as for assessing communal energy efficiency measures and communal heating systems in buildings such as tenements.

We likewise accept the recommendation of the independent review that retrofit assessors under HEETSA should be independent and impartial.

We are now seeking stakeholder views on the skills, qualification and accreditation processes which would be needed to ensure that assessors were able to offer detailed advice to building owners on technical suitability of heat and energy efficiency retrofit measures.

3.3 Certification and Report

The Scottish Government wants to ensure that when a technical suitability assessment has taken place, that the findings and the evaluation of improvement options are made available to consumers and presented in a consistent manner. We think that it is important for consumers to have confidence that a HEETSA assessment is comprehensive, considers a required range of issues, and presents these in a standardised way.

Many existing retrofit assessment methodologies already attempt to do this. For instance, PAS 2035 specifies a range of variables that a retrofit assessment must include^[26] (things such as location, appraisal of features, structure, construction, condition, installed building services (including heating), identification of constraints (such as listing of a building for historic interest), identification of existing energy efficiency measures installed, an inspection of ventilation, and establishment of u values, moisture properties, and the suitability of the building for improvement). It also suggests that an ‘improvement plan’ should be produced.

Drawing on the experience of EPCs, the Scottish Government believes that there could be benefits in generating a consistent means of recording the information used to produce a HEETSA, and producing a uniform ‘certificate’ or ‘report’ which would give ratings to particular elements of the building as it currently stands, and point out the potential improvements could be made. It would need to be designed in a way that was accessible and easily understood by the building owner or occupant, or by third parties who might wish to see this information, such as regulators (see below) or funders such as government programmes or mortgage lenders who may require a HEETSA before offering funding. This would be done to a far greater degree of technical rigour than is possible via the standardised assumptions made when producing an EPC.

A HEETSA certificate or HEETSA report could then be used to record evidence in a consistent way across the building stock. It could also be combined with information already held on the EPC Register by using the building’s unique property reference number (UPRN) to enhance national building datasets and begin development of a ‘digital building log’ or ‘green building passport’ or ‘digital logbook’ as has often been advocated. Previous research undertaken for the Scottish Government identified factors that should be included in a green building passport for Scotland^[27]. Personal data collected as part of the HEETSA process would not be included in such a dataset. The Scottish Government has ambitions to align with the EU, where appropriate, and in a manner that contributes towards maintaining and advancing standards. The Energy Performance of Buildings Directive (EPBD) has introduced requirements in relation to renovation passports and green building logbooks and we will continue to engage with EU proposals and take them into consideration.

The results of a HEETSA report or certificate could also be used to generate a revised EPC for the building, given the greater level of technical assurance of what was technically suitable or what was not, and hence the actual current ratings, or potential achievable ratings following installation of measures.

The Scottish Government would work with digital experts and consumer groups to design a format for a HEETSA certificate or report, in the same way as we are doing for the redesigned EPC, to create a format which can be easily understood and then acted upon.

We welcome views from stakeholders on whether a standardised certificate or report for HEETSA is needed and what the benefits or challenges could be in this.

3.4 When HEETSA would be needed

At present, retrofit assessments are often undertaken on a voluntary basis, when a building owner seeks further detailed information on improvements they could make to their property’s heating system or energy efficiency. We hope that our EPC reforms will also point many building owners or occupants towards a HEETSA – particularly by signposting more challenging-to-decarbonise buildings such as traditional buildings or tenements towards more detailed assessment.

Some retrofit assessments are also currently mandated by government funding programmes such as Warmer Homes Scotland which uses PAS2035 as a basis for assessing a building’s current performance and overseeing the installation of retrofit measures.

In the Heat in Building’s Bill consultation, we proposed that a technical suitability assessment could play a role in supporting the monitoring and enforcement of any mandatory standards. The results of a HEETSA could be used to support ‘modifications’ to proposed standards to ‘take account of a building’s characteristics or unique circumstances, or to support any appeals that people might want to make where they feel the requirements are incorrect or unfair’^[28]. We thought this would be particularly important for buildings which would not be suitable for a clean heating system until cleaner alternative fuel options become available, or for traditional buildings, those with protected characteristics, and tenements.

The Scottish Government has confirmed that it will introduce a Heat in Buildings Bill in Year 5 of the 2021-26 Scottish Parliament, which will place a target upon the Scottish Government to decarbonise heating systems by 2045. The Bill will create new requirements around heat networks and will also introduce new powers for Minister’s to set minimum energy efficiency standards for owner occupied and non-domestic buildings in future should this be deemed necessary.

Perhaps most pertinently, separate regulations will be progressed to introduce a minimum energy efficiency standard for homes in the private rented sector during this session of Parliament (which are being consulted upon alongside this HEETSA consultation). For social rented homes, the Scottish Government continues to work with sector stakeholders towards the introduction of a Social Housing Net Zero Standard which has been through consultation. We think HEETSA could play an important role in supporting building owners when triggered to comply with the proposed PRS MEES and SHNZS standards in the first instance, and could likewise support any future standards that might subsequently be developed using powers in the HiB Bill.

We therefore think that HEETSA is likely to be needed in the following circumstances:

• when a building owner chooses to act on a voluntary basis to make improvements to their building and wants more detailed technical advice (possibly following suggested potential improvement options via the reformed EPC)
• when it is a condition of eligibility for a government funding programme to undertake a more detailed assessment of which energy efficiency measures and clean heating systems would be technically suitable for the building
• when a building owners is required to comply with a regulatory standard such as proposed PRS MEES, and is seeking more detailed technical evidence which could be used to support a request for exemption from the standard, flexibility in meeting its requirements, or an appeal.
• When in communal buildings, owners wish to seek more information on communal options for fabric improvements or potential to move to communal heating systems where individual clean heating options may be limited.

In the case of both regulatory requirements and eligibility for funding programmes, the results of a HEETSA would allow the building owner to argue, for example:

• to a regulator overseeing the proposed PRS MEES or SHNZS, that whilst the EPC suggested that the building was current Band E on the Heat Retention Rating, and it could potentially achieve Band C, to do so would require installation of insulation on the walls which could create an unacceptable condensation or dampness risk, or that the cost of doing so would be prohibitive. It would therefore only be technically feasible for the building to install measures which achieved Band D on the EPC and this would be deemed sufficient grounds for an exemption or for saying the building had met the proposed PRS MEES at Band D rather than Band C.
• to a government funding programme which offered funding for particular measures, but the results of HEETSA said that some of those measures would not be technically suitable for the building, and that funding should instead be awarded for the alternative measures recommended by the HEETSA.

Likewise, government funding programmes or regulations could specify circumstances in which a HEETSA was required as a condition of funding or as a route to exemption, for example in traditional and protected buildings (where there is need for greater assurance around the impact of measures to avoid dampness risks or breach of listing or conservation area constraints), or tenements (where there is greater complexity around communal vs individual unit energy efficiency measures and heating systems).

This approach could address the potential risks of blanket funding criteria or blanket exemptions, by making determinations at the individual building level on what was appropriate. This would therefore provide greater reassurance to funders or regulators that the right measures and systems would be installed and the wrong ones avoided – and likewise to building owners and lenders too, such as mortgage providers.

We are seeking views from stakeholders on the circumstances in which HEETSA could be needed and whether or not there are any circumstances that it could be required.

3.5 Legal Basis

At present, there is no legal function which would set out requirements on how to undertake a technical suitability assessment. Methodologies and qualifications have been developed by the market (in the case of tools such as the RICS Residential Retrofit Standard) or with oversight from government (in the case of approaches such as PAS 2035).

The independent review recommended that:

• “the introduction of new regulations needs to be sensitive to both the implications of delivering poor quality retrofit projects and the current, substantial, skills shortages. In the immediate term, regulation should focus on the critical role of the Retrofit Assessor and consumer protection. However, in the longer term, the Scottish Government should commit to ensuring all elements of the HEETSA process are fully-regulated, whether this falls under reserved or devolved powers.”

We have already set out at the outset of this consultation that our initial preference would be for HEETSA to replicate three features used in the EPC system:

• government approval of methodologies (section 3.1)
• government approval of professional standards (skills / qualifications) (section 3.2)
• government specification of the format for certification / reporting results of the assessment (section 3.3)

We have also set out that we are also exploring whether HEETSA could possibly also involve a fourth feature also used in the EPC system:

• government specification of the circumstances in which an assessment is required (see section 3.4)

The Scottish Government has powers under Part 10 of the Energy Act 2023, which we will use as the legal basis for regulations covering the production of Energy Performance Certificates and the assessment methodology and assessor skills requirements which underpin them.

These powers would also allow the Scottish Ministers to make regulations covering how buildings were to be assessed and certified, and improvements to be identified and recommended, under HEETSA. They could also be used to specify the circumstances in which HEETSA was required – if stakeholders felt this was necessary.

We also have more general powers to issue guidance in relation to buildings, which could be used as an alternative to regulations.

We are seeking stakeholder views on what, if any, legal basis is needed to establish HEETSA, and views on the potential impacts of it being a statutory or non-statutory process.

3.6 Timeline

We intend to develop HEETSA in the following stages:

Policy & Regulations

• scoping consultation (spring-summer 2025)
• consultation analysis and finalisation of detailed proposals for Ministerial agreement (autumn-winter 2025-2026)
• final consultation on preferred approach (summer 2026)
• Ministerial decision on final approach to HEETSA (autumn 2026)
• laying any regulations or developing guidance for HEETSA requirements (winter 2026-27)
• process for bodies to apply for Ministerial approval of methodologies and approval of professional skills and qualifications (if adopted) (summer and autumn 2027)
• HEETSA guidance or regulations in force (beginning of 2028 – this would allow HEETSA to support things like exemptions when the proposed PRS minimum energy efficiency standard regulations coming into force)

Methodology, Skills, and Qualifications

• methodological scoping discovery phase (spring 2025 to spring 2026)
• design, build and testing of HEETSA methodologies (to fill any gaps) (spring 2026-autumn 2027)
• publication of methodological requirements and specifications for professional skills and qualifications (spring 2027)
• methodologies and skills requirements adopted and in force (beginning of 2028)

While the detailed scoping phase will inform the timeline, at present we intend to prioritise the development of fabric parts of the methodology for the end of 2027, so that they are ready for the proposed PRS MEES. Development of heating system parts would follow by the end of 2029.