Affordable Housing Supply Programme funding to prohibit direct emission heating systems from 1 December

Following the previous commitments in Housing to 2040, it has now been confirmed that all new homes delivered with grant funding through the Affordable Housing Supply Programme which apply for grant funding from 1 December 2023 will be prohibited from installing direct emissions heating systems (unless there are compelling reasons why an affordable housing provider considers this would not be appropriate or where a valid building warrant is already in place prior to that date).  

This will not only accelerate the introduction of zero direct emissions heating systems but also avoid the cost and disruption of future retrofit of affordable homes.  

To support the sector an additional quality benchmark of £4,000 for difference in cost of installing zero direct emissions heating has been in place since October 2021 and will continue to form part of the grant application appraisal process. The current set of Affordable Housing Investment Benchmarks will be adjusted to account for inflation using the differential between the Scottish Social Housing Tender Price Index for the year to December 2022 and will come into effect at the start of the next financial year. In addition, the Scottish Government is also now collecting and monitoring the actual costs of the installation of zero direct emissions heating systems being funded through the affordable programme. 

The external, independently co-chaired New Build Heat Standard working group will continue to meet to support the Scottish Government and our partners prior to the regulations coming into force in 2024. It is proposed that this group will move into a ‘delivery’ stage, with specific sub-groups established to address the remaining key challenges and barriers facing developers, housing associations and others in delivering zero direct emissions heating systems in new homes, while also providing input into the drafting of supporting technical guidance. The affordable housing sector are represented on the working group and shaping the work going forward through membership of SFHA. 

The Scottish Government has also recently published the Supply Chain Development Plan for the Heat in Buildings Sector which sets out the practical steps that will be taken to support the growth of the green heat sector – including supporting green jobs, leveraging private investment and helping businesses seize the economic opportunities offered by the transition to net zero. The acceleration of zero direct emissions heating through the Affordable Housing Supply Programme will help to drive installer capacity and the Scottish Government will work with the sector to identify where training is required. Many of the core skills required to become a certified installer for zero direct emissions heating systems already exist within the trade sector and can be supported through a variety of upskilling training courses. Support for installers, including information on accessing funding, training and resources in renewable technologies is available through the Green Heat Installer Engagement Programme.