Consumer Scotland has published new analysis setting out the key challenges facing households connected to heat networks.
Around 30,000 homes and 3,000 businesses in Scotland currently rely on heat networks for heating and hot water, a figure expected to grow significantly as part of national efforts to decarbonise heat and reduce energy bills.
From next week, Ofgem will become the regulator for heat networks across Great Britain, introducing new rules on billing, pricing, complaints handling and protections for consumers in vulnerable circumstances.
Ahead of regulation, Consumer Scotland – the statutory advocate for heat networks consumers in Scotland – has set out the key challenges faced by consumers including:
High and volatile prices: Unlike gas and electricity customers, heat network consumers are not protected by a price cap, leaving them more exposed to high price spikes. Standing charges in particular can also be significantly higher and these have risen sharply for many consumers
Problems with billing, metering and debt: Some heat network consumers receive unclear bills – or no bills at all – making it difficult to understand charges or to budget effectively, leading to unexpected debt. Some consumers reported facing eviction due to heat network debt
Poor reliability and high complaints: Heat network consumers are more likely to experience outages than other energy consumers, complaints rates are higher and consumers often don’t know who to contact at the heat network when problems arise due to complex operating structures
Consumer Scotland Head of Energy Transition Alistair Hill said:
“Heat networks will play an important role in Scotland’s transition to low‑carbon heating but for this transition to succeed it must deliver fair, affordable and reliable outcomes for consumers, many of whom are on low incomes and already facing financial pressures.
“Our analysis highlights the urgent need for strong protections for consumers and businesses and we welcome incoming regulation as an important milestone towards this.
“As part of our statutory advocacy role we will seek improvements for consumers by monitoring the market on an ongoing basis and identifying and escalating consumer issues with government, industry and the regulator.”
Heat networks supply multiple homes or buildings from a central heat source, avoiding the need for individual boilers or electric heaters in every dwelling. This helps reduce emissions and achieve net zero targets.
Background
Challenges facing heat networks consumers in Scotland
Consumer Scotland was appointed the statutory advocate for heat network consumers in April last year and has worked closely with Ofgem and the UK and Scottish governments to support the introduction of regulation and ensure consumer needs are at the forefront.
Customers on a heat network in Scotland who need information or support can contact national consumer advice agency Advice Direct Scotland via energyadvice.scot or by calling 0808 196 8660.
Consumers in vulnerable circumstances can be referred to the Extra Help Unit at Citizens Advice Scotland for additional support.
Consumers have access to dispute resolution through the Energy Ombudsman.
Scotland's net-zero target is to eliminate all greenhouse gas emissions by 2045.