Energy bills could be forced up by another £800 and homes rendered “unsellable” by the Scottish Government’s controversial plan to force home owners to rip out their gas boilers, an official consultation on the scheme has warned.
An analysis of responses on the new Heat in Buildings strategy, unveiled by the SNP-Green coalition government last week, cited warnings that moving to “net zero” could add between £200 and £800 per year to utility bills.
With the majority of homes reliant on gas, it said that the mass deployment of zero-emissions heating systems “could result in considerable fuel cost increases”, tipping thousands of people into fuel poverty.
The analysis highlighted the financial burden on households, and particularly the elderly, of having to pay thousands of pounds to replace their gas boilers with low-emissions systems such as heat pumps.
House prices could also take a hit from the scheme, the report warned, “with some properties becoming unsellable if high-cost refurbishments are not completed”.
“It was suggested that mortgage lenders will need to be consulted as the changes could result in properties on which a mortgage cannot be raised,” the report said.
Energy prices spike
It said some home owners could be pushed into negative equity if it is not cost effective to renovate their homes, creating a “two-tier” housing market with other properties that are “easier and cheaper to improve.”
The Scottish Government report also cited warnings “that there could be a substantial and sustained consumer backlash” against the plan, especially among “early adopters” of the new heating technologies who face “disproportionately higher costs”.
Although many respondents to the consultation backed the scheme, there were concerns about the SNP-Green coalition using Scots as guinea pigs as “it implies that consumers will be used unwittingly as part of the learning process”.
The warnings emerged in a 267-page analysis of the responses to a public consultation on the scheme, which was conducted between February and April.
Patrick Harvie, the co-leader of the Scottish Greens, announced last week that more than a million homes must be converted to “zero emissions heat” by 2030 to meet the country’s greenhouse gas targets.
All buildings are to be converted to “zero emissions” by 2045 at a total cost of £33 billion. However, Mr Harvie said the Scottish Government would provide an initial contribution of only £1.8 billion.
He repeatedly failed to specify how much of the remaining £31 billion would fall on home owners already struggling with rising domestic bills.
How heat pumps work
How Heat Pump Works
The strategy admitted that the average cost of installing a heat pump, one of the most common forms of low emissions heating, is about £10,000, four times the £2,500 cost of replacing a fossil fuel boiler.
The consultation analysis said that the risk most frequently identified by a “broad range” of respondents, including consumer advice groups, was households falling into fuel poverty.
“It was reported that, based on assumptions and the solutions currently available, getting to net zero could add between £200 and £800 per year to household energy bills,” it said.
“With the majority of homes in Scotland currently reliant on gas, it was suggested that the deployment of zero emissions heating systems at the rate required to meet the net zero target could result in considerable fuel cost increases unless other mitigating measures or wider reforms are implemented.”
The report cited warnings that “many homes are not affordably or easily retrofitted in order to make heat pumps cost-effective”, that their running costs would be “unaffordable for many” and the “disruption to floors and interiors” was needed to fit them.
It also noted a “significant shortage” in tradesmen with the “necessary retrofitting and heat installation skills”.
“There was a concern that if potential issues around skills availability are not addressed quickly, they could lead to poor quality work, unacceptable waiting times and artificially inflated prices,” it said.