Social Housing Net Zero Heat Fund - call for funding applications - 2022

We are making £200 million available over the next five years to support social landlords across Scotland to install zero emissions heating systems and energy efficiency measures across their existing stock.

Reducing emissions from our homes and buildings is one of the most important things we can to do help end Scotland’s contribution to climate change. Achieving emissions reductions in buildings will require over one million homes to convert to using zero or low emissions heating systems by 2030.

We must rapidly scale up deployment of zero emissions heating systems, such as heat pumps and heat networks, as set we stated in the Heat in Buildings Strategy. The Climate Change (Emissions Reduction Targets)(Scotland) Act 2019 set legally binding targets for us to achieve net zero greenhouse gas emissions by 2045, with interim targets requiring a 75% reduction by 2030, and 90% by 2040.

Our statutory fuel poverty targets are similarly ambitious, requiring that in 2040 no more than 5% of households are fuel poor and no more than 1% are in extreme fuel poverty. It is therefore imperative that, as we take action to cut emissions from Scotland’s homes, we do so in a way that supports and enables the eradication of fuel poverty.

2022 funding invitation

The funding invitation for 2022 has a minimum allocation of £30 million to support social housing landlords across Scotland to install zero emission heating systems and energy efficiency measures It is for social housing projects across Scotland that effectively contribute towards the achievement of our ambitions for Scotland to achieve net zero emissions by 2045. The funding invitation is for the retrofit or refurbishment of existing housing stock and is not for new build social housing.

Themes

For this funding round there are two themes:

• theme 1 – zero emissions heating system for social housing across Scotland. These projects can also contain  energy efficiency “Fabric First” upgrades to maximise the efficiency of the new technology being installed.
• theme 2 – “fabric first” energy efficiency only projects

Read the full details about the themes before you apply.

Who can apply

Applications will be accepted from registered social landlords, local authorities and ESCOs. They must be for social housing projects delivering zero emission heating systems

Projects will only be considered if they fulfil the mandatory criteria. 

How to apply

• download and complete the application form found in the supporting documents
• only fill in the application form after you have read the guidance notes and more information fully
• send your completed application to: netzerosocialhousing@gov.scot

When to apply

Applications can be submitted to the fund at any time. This fund is a rolling fund and will remain open to applications until the funding limit is reached.

Funding is capped at £30 million each year for zero emissions heating projects and energy efficiency projects.Funding will be not be allocated equally across the checkpoints and applications will be considered in the order they are received. As such, we recommend submitting your application as early as possible.

Application pack

You can download the application form and all guidance notes in supporting documents.

Assessment dates for applications

Applications will be reviewed on a quarterly basis. The next review points are listed below

Applicants will be informed of the outcome of their application within four weeks of their checkpoint.

Project deadlines

Theme one

Theme one projects must have completed installation and commissioning by 30 March 2024.

We can consider projects with a later deadline. Email netzerosocialhousing@gov.scot for further information.

Theme two

Projects submitted under theme two must complete installation by 30 March 2024.

Intervention rates

The maximum grant funding intervention rate will be between 45% and 50% of eligible costs depending on the size of the organisation and the location of the project. Projects will be required to provide 50% match funding, of which 30% loan funding can be applied for. A minimum of 20% of project costs must be funded from the project’s own capital or agreed private financing.

Eligible capital costs are:

• financial costs incurred for the purchase of physical assets
• costs of project build, installation and construction
• costs of project commissioning
• non-reclaimable VAT for eligible capital costs