To achieve net-zero carbon emissions by 2045, Scotland needs to decarbonise heat and improve the energy efficiency of its buildings. This evidence review examines the potential of Heat as a Service (HaaS) to support this aim by providing a route to decarbonising heat in domestic properties in Scotland.
Heat as a Service is a term which covers a range of services that enable people to achieve a warm home in a variety of ways. These include services which provide or enable finance to purchase and install heating equipment; maintenance of heating equipment; energy efficiency upgrades of building fabric; paying for the amount of heat delivered to the home; paying for the temperature the home is heated to; paying flat-rate tariffs for the home to be heated; or combinations of these.
The report outlines HaaS business models that have been tried across Europe. We look into the potential benefits of HaaS for Scotland, and some of the barriers. Through case studies, we explore in more detail how different business models might work and be adapted to Scotland.
To date, there is not much evidence as to what has been tried in terms of HaaS or how effective it has been in delivering substantial emissions reductions. However, the limited evidence suggests that some HaaS offers have potential to help get Scotland to net zero by accelerating uptake of low-carbon heating systems and improving energy efficiency. This would also improve outcomes for consumers, especially the more vulnerable, and support businesses in developing new, sustainable business models:
Companies choose different ways to set their tariffs and finance their offers.
Different Haas offering must comply with different regulations, sometimes from a range of different regulators.
Haas could help overcome the two main barriers that put people off installing low-carbon heating systems: concerns about cost and comfort.
There is not yet much evidence about what consumers like or dislike about Haas, but there are some likely drivers to Haas uptake.
Case studies provide insights into how HaaS could help Scotland meet its policy aims, but none describe a comprehensive solution at this stage.
The main challenges facing interested businesses are understanding regulations and learning to deliver HaaS in a commercially viable way.