Publication - Impact assessment
The Energy Efficiency (Private Rented Property) (Scotland) regulations 2020: ICIA
Island Communities Impact Assessment (ICIA) for the Energy Efficiency (Domestic Private Rented Property) (Scotland) regulations 2020 and draft associated guidance.
Issues and mitigating actions
- The level of investment in energy efficiency improvements in rural properties would not be reflected in its uplift in capital value, nor rental value.
- Regulation 12 provides for exemptions on the basis of the cost of making relevant improvements. The property may be exempt from meeting the standard provided the landlord has made relevant energy efficient improvements up to the cost cap. The landlord must supply proof to the local authority that all relevant improvements have been carried out up to the cost cap and register the exemption with the local authority.
- The Cost cap is too low as the cost to improve island properties is much higher that on the mainland once travel and accommodation costs are factored into quotes.
- This will be addressed under Regulation 12. There is a cost cap of £5,000 on improvements to reach an EPC E and a further £5,000 for improvements to a D. If a landlord has carried out all relevant energy efficiency improvements up to the cost cap, they may seek an exemption if the property still does not meet minimum standards. Work to reach EPC E should cost less than £5,000 for most properties with an EPC of band F or G.
- Further support for the upgrade of island and rural properties is essential. More detailed knowledge of building structures needed to give out accurate advice to property owners
- These regulations are part of a wider framework of Energy Efficient Scotland that aims to make all buildings warmer, greener and more efficient. Through the Energy Efficient Scotland skills workstream we are working with industry and education to improve the knowledge of assessors regarding all building types.
- Where there is an ageing population on the islands, they may require more explanation of what is needed to meet the standard, what work would be involved and why they are being asked to do it.
- Guidance will support the regulations which will be aimed at all landlords including those who may need additional support. Home Energy Scotland (HES) also provide free and impartial advice and information for all landlords and all tenants.
- Where there is hard to treat housing stock the building fabric needs to be considered prior to improvements implemented or further problems could occur and costs could increase dramatically
- If a landlord cannot carry out relevant energy efficiency improvements without causing damage to the fabric of the building the landlord can seek an exemption and will be required to provide proof to the local authority and register the exemption with the local authority. The proof must be a letter from a relevant person or independent installer, confirming that the proposes improvement would cause damage to the fabric of the building. Guidance to accompany the regulations will give more details on exemptions and will direct landlords to agencies such as Historic Environment Scotland for advice where relevant.
- Energy efficiency improvement costs are often high for island properties and loans and grants currently available are sometimes not enough.
- Regulation 12 provides for exemptions on the basis of a cost cap on the cost of making relevant improvements. Landlords will be expected to make any other relevant energy efficient improvements up to the cost cap.
- The Energy Act 2011 (Part 1 para 55) sets out the meaning of relevant energy efficiency improvements and as part of this provision is made for works to be financed by a green deal plan, an obligation imposed by an order made under sec. 33bc or 33bd of the Gas Act 1986, or section 41a or 41b of the Energy Act 1989, ECO, and combination of these, or a financial arrangement as set out in regulations. Scottish Government already provides for landlords to seek loan funds through Energy Saving Trust, based on Home Energy Scotland loans, or Resource Efficient Scotland loans.
- Local authorities need some discretion regarding the timing if the work including quotes and receipts, particularly where local authority areas contain a large portfolio of PRS stock. Island local authority resources to deal with an influx of work may just not be available and may need more time to put in place.
- Local authorities have discretion about whether to take action to enforce a breach of the regulations. Local authorities are well placed with knowledge of local circumstances with regard to the time taken to get quotes and get work done, both in relation to having the work completed and when a landlord is seeking to register an exemption.
- The availability of assessors, installers and suppliers to the islands has been difficult in the past. The forthcoming PRS energy efficiency regulations could increase demand and put further pressure on this area.
- We are aware of the issues experienced by householders and private sector landlords in remote rural and island areas with regards to finding quality assured suppliers including energy assessors and installers. Based on research carried out by Energy Saving Trust in this area we understand a key reason for this is the high costs associated with suppliers, particularly installers in relation to certification costs. This is compounded by the fact that many of these suppliers are micro-sized businesses employing 10 people or less. These issues were included in discussions through the Energy Efficient Scotland Quality Assurance Short Life Working Group with a recommendation made that any quality assurance requirements for Energy Efficient Scotland should be fair, proportionate and not cost prohibitive to SMEs. As a result this should increase the pool of available suppliers in these areas thus addressing the issues experienced by householders and private sector landlords.
- The 6 months preceding the regulations coming in to force runs between October and end March, during which time work is often delayed because of weather
- Relevant improvements for energy efficiency that are carried out in the six months preceding the introduction of the regulations can be taken into account if a landlord is seeking an exemption based on the cost cap. This is to assist landlords who have already carried out work.
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