Green Heat Finance Taskforce reports: Scottish Government response

3. Current Support Landscape

The Scottish Government currently provides a range of funding schemes, targeted at different groups of domestic and non-domestic property owners, which support the installation of energy efficiency measures and clean heating systems. These are summarised below, separated into those which target individual property owners (the focus of the Taskforce’s Part 1 report) and those which target collective groups of property types (the focus of the Taskforce’s Part 2 report).

3.1 Individual property funding support schemes

HES Grant and Loan – support open to all owner-occupied domestic households in Scotland. It provides up to £7,500 as a grant and £7,500 as an interest free loan for the installation of a heat pump, as well as funding for energy efficiency measures. An uplift of £1,500 is available for rural and island homes to both the clean heating and energy efficiency grants. Since April 2023, the scheme has funded the installation of over 6,500 heat pumps.

From December 2025, the HES Grant and Loan scheme will offer grant funding for heat network connections. Up to £9,000 of grant funding alongside the existing loan funding will be available for households to connect to heat networks.

Warmer Homes Scotland (WHS) – our national fuel poverty scheme, designed to help those living in fuel poverty or at risk of fuel poverty through installing insulation and heating measures into individual properties. Households are offered a clean heating system in the first instance, although only where installation of these systems will avoid pushing households into fuel poverty or worsen their depth of fuel poverty. Where there is a risk of doing so, support is focused on installing measures which will improve a home’s energy efficiency.

Since the launch of the first WHS scheme in 2015, it has invested around £399 million and helped over 48,000 households across Scotland to live in warmer, healthier homes which are more affordable to heat. Since the scheme re-launched in October 2023, WHS has helped over 12,000 households, and installed around 29,000 heating, insulation and renewables measures. So far, in 2025/26, the average fuel bill savings across all completed applications is around £350 per year.

Private Rented Sector Landlord (PRS) Loan – a scheme that provides loan finance to private registered landlords to enable them to invest in improving the energy efficiency of their properties and install clean heating systems. The scheme has paid out over £1.5 million since its launch in 2020. 

SME Loan – a scheme that is aimed at supporting small and medium sized enterprises to implement energy efficiency or renewables measures. The scheme provides unsecured, interest free loans of up to £100,000, as well as cashback grants of up to £30,000. In 2024-25, the scheme supported 251 SMEs, with the installation of 534 energy efficiency and renewable measures, producing over 23,000 tonnes of lifetime carbon savings and over £19 million in lifetime cost savings.

3.2 Collective property funding support schemes

Area Based Schemes (ABS) – local schemes which are designed and delivered by councils, often with utility companies and other local partners such as Housing Associations. ABS funding helps property owners meet most or all of the costs of providing energy efficiency measures to households in or at risk of fuel poverty. This has helped over 125,000 households to make their homes warmer and more energy efficient since 2013.

Social Housing Net Zero Heat Fund – a fund designed to accelerate the delivery of energy efficiency and clean heat to existing social housing. The Fund supports the social housing sector to achieve energy efficiency upgrades and the installation of clean heat in social housing across Scotland.  In 2024-25, the scheme supported over 1,600 social housing properties to install energy efficiency measures and over 780 properties to install renewables and/or clean heat measures. It is estimated that the Fund will have improved over 13,000 homes over the course of this parliament.

Scotland’s Heat Network Fund offers capital grants to businesses and organisations in the public, private and third sectors to develop heat network projects. It aims to support the roll-out of zero emission district heat networks and communal heating systems.

To help projects get to the stage where they can successfully access the Fund, Scotland offers a Heat Network Support Unit, which provides grant funding and expert advice throughout the pre-capital stages of development. This includes offering grant funding for feasibility studies, outline business cases and strategic heat network support for local authorities which is tailored to individual project needs.

The Green Public Sector Estate Decarbonisation Scheme provides funding to improve energy efficiency and decarbonise heating in public sector properties via:

• Scottish Central Government Energy Efficiency Grant Scheme, giving up to 100% capital grants across central government bodies without access to borrowing.
• Scottish Public Sector Energy Efficiency Loan Scheme, offering zero-interest loans for local authorities, universities, and arm’s length bodies.
• Public Sector Heat Decarbonisation Fund, offering up to 80% capital funding for whole-building heating system upgrades and energy performance improvements.
• Scottish Public Sector Non-Domestic Energy Efficiency (NDEE) Framework and Project Support (PSU) Framework for procuring and managing retrofit projects.