Heat in Buildings - supporting the rollout of heat pumps and solar PV in Scotland

In terms of overcoming cost barriers, the research also found that the participants were more likely to install more than one technology because funding was available to do so; and this enabled them to go further than their initial ambitions.[17] The availability of funding, coupled with independent and trusted advice, made the decision to install these technologies much easier and often reinforced the case for installing a heat pump.

A separate report from Consumer Scotland on the net zero transition found that the main barriers to consumers undertaking more sustainable behaviours across a wide range of markets relate to cost, convenience, clarity and confidence and accessibility.[18] It states that more action is needed generally to support consumers to overcome these barriers. It found that consumers are concerned about climate change, but that they consider government and industry to have primary responsibility for tackling this. Consumers are looking to policymakers and business for leadership, guidance and support to implement any necessary changes. These findings resonate strongly with our research on heat pumps and solar PV where costs, inconvenience/disruption and lack of access to sources of trusted information, advice and installers to help navigate important technical information, all played a role. 

Consumers require more support to access funding opportunities and area based schemes

Without access to funding such as the Home Energy Scotland Grant and Loan Scheme funded by the Scottish Government, many consumers who took part in the research would have been unable to undertake the installation or would have reduced the ambition of their retrofit plans. The existence and the scale of the funding available in Scotland has, until recently, been a significant enabling factor in the decision making process for consumers.  

Consistent with research from Climate XChange[19] the research also identified concerns about consumers’ experience of the funding application process.[20] Some of the challenges identified included the application paperwork being complex and time consuming. Long processing times were a factor in some participants turning down interest-free loans to fund their retrofit. Some participants noted that they sought a loan from elsewhere with higher interest rates as they did not want to repeat the time-consuming application process and delay the installation further. Other participants found the approval process much slower than they had hoped. One of the difficulties mentioned was that installers wanted consumers to pay installers upfront, in advance of receiving the funding, which was not always practical or possible. Others required support from their installer to complete the application as they found it to be complicated and confusing. This research indicates that these issues can serve as a deterrent to consumers taking advantage of available funding opportunities.[21]

The research highlighted similar issues with other funding schemes. Two participants also turned down a referral to the Warmer Homes Scotland Scheme, the Scottish Government’s national fuel poverty programme, as they did not feel confident in the advice provided by the installer. Area Based Schemes have supported over 108,000 homes in Scotland to improve their energy efficiency and heating systems since 2013.[22] A participant in our research who received funding through an Area Based Scheme felt that the process was made more complicated by disjointed communications from the different organisations that were involved in the consumer journey.[23]

The availability of funding across different schemes was a significant factor in the decision making process for the consumers who took part in the research. This underlines the importance of making sure that the process to access this funding works smoothly for consumers and can help to encourage and support them to go beyond their initial ambitions. The consumer experiences outlined in the research suggest that the funding application processes could be improved through: 

• Timescales from inquiry to full installation could be made shorter and more streamlined. From navigating the available information and advice, completing the funding process and finding an appropriate installer to carry out the work, the process needs to be made easier and less time consuming.
• More support during the application process to support consumers if they have any difficulty. Some consumers in the research found the funding application process to be complicated, confusing and challenging to complete.
• Support better communication between the different agencies involved in delivering area based schemes. Communication between advice services, scheme management agents and sub-contractors can be confusing for households. This communication could sometimes be disjointed and there is an opportunity for this communication to be more coordinated.

Addressing these challenges could help to remove some of the barriers that consumers face and make incentives more attractive. Positive experiences of the funding process will help to drive more people through these schemes and ultimately improve the experience for consumers who are considering installing a heat pump or solar PV. To ensure the best possible outcomes it is also essential for services such as the Home Energy Scotland advice service to be fully resourced in order to provide consumers with the best possible experience when seeking impartial advice or access to available funding.

Solutions are needed to support consumers without high levels of capacity, agency or motivation

The widespread adoption of heat pumps in Scotland will require solutions to be developed to support consumers without such high levels of capacity, agency, or motivation. It was common for the consumers who took part in the research to have a pre-planned vision about the technology they wanted to install. With this vision came an existing understanding of how the relevant technology works, coupled with the motivation to research it in more detail. This means that these consumers already start with a pre-existing knowledge at the outset of the installation journey.

Changeworks found that consumers who participated in the research were ‘innovators’ with knowledge and understanding of how these low carbon technologies work and operate.[24] This reinforces previous research carried out by Climate XChange which found that those currently installing heat pumps are highly motivated early adopters/innovators.[25] These consumers are strongly motivated by environmental concerns and want to do their part to address this. This group of consumers have the time, inclination and ability to carry out significant research to understand how the technology works and also how it can work for them. It is unlikely that all consumers will have the same capacity and inclination to carry out the same level of research. In this context, significantly increasing the uptake of low carbon technologies, amongst consumers who are less engaged than those consumers who have already made these changes, appears unlikely to be achieved unless steps are taken to make the consumer journey easier. It also raises questions as to whether too much responsibility is being placed on individual consumers instead of taking a more coordinated area-based approach.

Consumer Scotland has commissioned additional qualitative research to better understand how consumers engage and participate in the transition to net zero. This research also suggests that the way consumers engage in the energy market is largely driven by cost and the ability to implement changes.[26] Heat pump installation in particular was seen by those consumers as a significant financial and life change. The same research also found that some consumer behaviour relies on participants having an awareness and understanding of the issues that many consumers currently don't have. For the majority of consumers, cost and convenience remain key factors in driving consumer purchasing decisions rather than environmental concerns.

A systemic approach at all levels of government will be required if consumers are going to be supported to make the changes required to deliver the wider roll out of low carbon technologies. While ensuring that consumers have access to meaningful and trustworthy advice will be important, information alone will not be enough. Information provision must be situated within a clear framework, which provides incentives for sustainable use of resources, regulates problematic products and services and supports the design and development of more sustainable options.[27] Funding, sufficient supply chains, consumer protection and access to redress are all essential.

Action is needed to tackle myths, misconceptions and misinformation on the effectiveness of low carbon technologies

Initial preconceptions and negative assumptions about the effectiveness and running of heat pumps and solar PV played a role in the decision making process of consumers who took part in the research. These consumers overcame these preconceptions and decided to install the technologies. Three key factors helped to overcome initial scepticism:

• Having the time and capacity to carry out detailed research and the confidence in understanding and using that information - previous survey research by Consumer Scotland has already highlighted a lack of consumer awareness and knowledge around less familiar low carbon technologies.[28] Time was a key enabling factor that allowed consumers to research and engage with these technologies in the qualitative research.
• Access to independent advice and funding - access to funding and advice is also a means to overcoming hesitation to installing these technologies. The majority of consumers who took part in our research engaged with the Home Energy Scotland advice service during their installation journey, either as a source of advice and information or for funding.
• Access to peer and community support - seeing that others had installed technologies helped to build trust in their effectiveness. Consumers who know someone who has already installed these technologies are able to see live, practical examples of them running in their local communities. This helps to challenge any initial misconceptions or misunderstanding about how the technology works.  

There are further actions that could be taken to better support consumers in the decision-making process to overcome the myths, misconceptions and misinformation they encounter. These include:

• Supporting consumers with more proactive information of the effectiveness of low carbon technologies – Consumers in our research often found misinformation about the effectiveness of these technologies, sometimes without looking for it. More needs to be done to proactively counter this misinformation through the better promotion of the facts of how these technologies work by Government, industry and others. Trials and research conducted by Energy Systems Catapult has debunked many of the myths perpetuated about the effectiveness of heat pumps, including the suitability[29] and efficiency.[30] The upcoming Heat in Buildings regulations will require significant public engagement to inform and support consumers through what is required of them and the journey to comply with the regulations. The Scottish Government will need to take a rapid and more proactive role in challenging the myths, misconceptions and misinformation about low carbon technologies. This is an opportunity to work with other key partners such as Energy Saving Trust and Nesta to signpost consumers to reputable sources of information and advice. 
• Support consumers to conduct their own research through better signposting to different trusted sources of impartial, trustworthy easy to understand information – The research found that consumers gained confidence from carrying out their own research, enabling them to overcome initial myths or misconceptions about the technology. Existing information sources are seen as useful but also as a starting place for further research. There must be a recognition that not all consumers will have the time and capacity to carry out this level of research. Consumers need to be signposted to a range of different trusted sources of information to help and support them to find and access the level of information they want to receive.[31] This will make it easier for consumers to find and access information they need to support the decision making process but could also help to join up and coordinate between existing sources of information to provide a better consumer experience. Consumer Scotland would encourage the Scottish Government, advice bodies and industry to consider how it can make it easier for consumers to conduct their own research through better coordination of existing sources of information.
• Support consumers to meet others who have installed these technologies - Consumers in the research benefited from speaking to someone who had installed the relevant low carbon technology to see it work in practice. This indicates that programmes such as Nesta’s Visit a Heat Pump scheme[32] and the Green Homes Network[33] could play an important role to support the wider rollout of these technologies – supporting and providing consumers with the opportunity to visit and talk to others who have already been through this journey. As part of the Heat in Buildings public engagement programme, the Scottish Government could look to utilise existing networks like these to support consumers to access others who have already carried out their installation journey.

The research indicates that negative preconceptions, which can be heavily influenced by myths, misconceptions and misinformation had a significant impact on participants  decision making process to install a heat pump. There is still work to be done, therefore, to enhance the consumer experience of access to information, advice and support. While most of the participants in our research overcame initial scepticism or negative perceptions, some still decided against installing the technology due to their initial assumptions. If this is true of a group of consumers who were already highly motivated by environmental concerns, it is likely to act as an even greater barrier for consumers who are less motivated by these drivers. 

Moving home is a key enabling factor for consumers to carry out installation of low carbon technologies or energy efficiency measures

Moving home presents consumers with an opportunity to overcome many of the barriers to installing low carbon technologies that they normally face. In this circumstance the disruption normally associated with installation of a heat pump can potentially be more easily mitigated and built into other property renovations that the consumer is undertaking. The process of moving home presents consumers with an opportunity to think about how they will heat their home in the medium to long term and the cost implications of the different options available to them. This creates a window of opportunity for a less invasive installation process which consumers can see as an investment in their new property. This reinforces existing research and which lay behind the Scottish Government’s previous plans in the Heat in Buildings Bill proposals[34] for change of property tenure to become the main trigger point for consumers to decarbonise to a clean heating system.

Consumer Scotland acknowledges there is a good case for property purchase being considered as a possible trigger point to encourage consumers to undertake retrofit. Such an approach would potentially support consumers to carry out installation at a point that the research indicates it could be much easier to do so.[35] [36] However, for it to be a reasonable expectation of consumers they would need to have access to sufficient supply chains, appropriate financial and funding mechanisms, consumer protection and redress in the market and time is needed for such a supporting environment to develop. Supporting consumers to be more aware of the technologies available and to actively think about retrofit will help them to build installation plans into property purchases.

Energy independence and security can be a key driver for retrofit for some urban and rural consumers

Energy independence and security was a motivating factor to install low carbon technologies for consumers in both rural and urban areas in our research. The cost of living crisis had a significant impact on the cost of heating homes in Scotland. Unsurprisingly, saving money on energy bills is consequently a strong motivating factor for consumers considering the installation of low carbon technologies. The installation of these technologies can help to provide long term energy security and protection from volatile, high cost fuel and energy prices. But they can also provide consumers with reassurance and protection during power outages.

The installation of technologies such as a heat pump, solar PV or a battery storage system presented consumers, particularly in rural areas, with the opportunity to enhance the resilience of their energy supply, by transitioning away from unregulated, potentially expensive fossil fuels such as LPG and heating oil. Fossil fuels are subject to external market shocks, such as the Ukraine crisis; which can leave consumers vulnerable to high price increases. Limited local competition can also drive high prices and poorer outcomes for consumers. The installation of low carbon technologies can help to provide longer term energy security and more protection from volatile fuel pricing. Saving money on energy bills was also a motivator for urban consumers who wanted to reduce the amount of energy they purchased from the national grid. Low carbon technologies can also be utilised to help to make heating more affordable for consumers transitioning from more expensive electric storage heating systems.

The installation of solar PV was also an enabler of energy resilience and independence for some rural and urban consumers. Consumers living in rural and remote areas, where they are more susceptible to power cuts and storm damage saw the installation of solar PV, coupled with battery storage; as a way to provide more energy independence and protection from these issues. As part of the planned public engagement to support the heat in buildings regulations there could be an opportunity as part of the messaging on low carbon technologies such as solar PV and batteries to highlight this benefit more to drive uptake in rural areas.

These issues may also help to inform other significant work underway in the energy market, including work on the future structure of the retail market and work to support consumers in vulnerable circumstances.

Further action is needed to support consumers to find a heat pump installer

A challenge identified in the research was that participants often found it difficult to find an installer to carry out the installation of the low carbon technologies. Finding an installer was a significant step in the consumer journey and having a positive relationship with installers can have a considerable impact on if, when and how a householder proceeds with retrofit. Most participants in the research reached out to multiple installers for a quote after they had received no response from initial contact with an installer. Many reached out to local installers with limited success before contacting a wider range of installers. 

While finding an installer was a significant challenge for participants, a further concern was finding an installer that was not experienced who would either badly install the system or that would sell them a system that was not appropriate for their circumstances or home. Participants also relied on online resources such as the EST installer tool[37] or on online reviews to support them to find a suitable installer. It is positive that consumers find these resources useful when looking to carry out research and source information on reputable installers.

The relationship between consumer and installer can be a positive influence on a consumer’s decision making process. Installers can often provide more technical detail about the operation and installation of the system than others along the consumer journey can provide. Problems or delays to finding an installer could be a significant barrier in the installation journey. 

There is still a lack of installers of low carbon technologies particularly in rural areas in Scotland and this is an area of concern, although we note that the Scottish Government are taking action to mitigate this through the Heat in Buildings supply chain delivery plan.[38] If not sufficiently addressed this could potentially slow down the rollout of heat pumps and other technologies in rural areas. The lack of suppliers, and ultimately competition; could mean higher costs and delays for consumers. If supply chains are not sufficiently developed; this could ultimately affect consumers’ ability to comply with regulation.

We are aware that there is considerable work being done by both UK and Scottish Governments to develop supply chains for the wider rollout and installation of low carbon technologies. The rollout of solar PV in Scotland could be considered an example of how this could be done successfully. The development of the solar PV market has led to the growth in the number of installers in the market to meet consumer demand which ultimately has helped to provide greater choice and more competitive prices.[39] However our research suggests that the supply chain for heat pumps is currently less developed and as a result consumers will require additional support to identify and secure local suppliers to carry out their installation.