At Changeworks, our aim is to decarbonise Scotland’s homes and ensure a just transition to net zero.
That means Scotland’s journey to a low carbon society must avoid negatively impacting those who are already in a vulnerable position.
In fact, retrofitting homes and switching to clean sources of energy should mean the exact opposite – it’s a chance to help people come out of fuel poverty and live in affordably warmer, healthier homes.
This is particularly true in social housing, where tenants are often struggling with inefficient homes and high energy costs.
The Inclusive Smart Solutions fund
Since a just transition underpins all of our work, we were delighted to be awarded funding from the Inclusive Smart Solutions (ISS) programme.
This fund aims to significantly improve the uptake and use of smart energy technologies, products and services among low income and vulnerable consumers.
In other words, the fund enables the development of projects which bring the benefits of a smart, flexible energy system to those who need it most.
Our initial business model concept
In partnership with Scene Connect and alongside experts from TPXimpact and Carbon Trust, Changeworks used ISS funding to develop a business model concept for helping registered social landlords (RSLs) to retrofit their properties.
Social housing is an area where a just transition approach to retrofitting is particularly important, as tenants are often vulnerable and cannot afford to shoulder the cost of a retrofit. In addition, where a retrofit can be fairly financed, tenants need to feel confident about their newly installed technologies and not experience them as an unwanted complication to their lives.
We began with a “pay as you save” model: Changeworks would help RSLs secure loan and grant funding to pay for the retrofit of their properties. The retrofit would include a smart home energy system (which controls when and how energy is used) to help the tenant make savings on their energy.
Tenants would pay the same for energy as before, with the savings they made covering loan repayments.
Refining our model by centering social housing tenants
TPXimpact helped us to test our business model with social housing tenants, which allowed us to understand the likelihood of prospective users engaging with our service.
Crucially, providing a space for tenants to express their needs also showed us how we could improve our business model.
In particular, the workshops focussed on the risks in our concept. These included:
- The service being difficult to understand/tenants not wanting to take part
- Tenants not wanting to share their energy consumption data
- Tenants not accepting the repayment plan or being able to keep up with payments
Rather than investigating these risks in an abstract way, the workshop provided tenants with prototype comms and documents related to the service.
The prototypes included a letter from their RSL outlining the retrofit process, a leaflet which explained the new smart system, and a bill with their new energy charges.
This gave us much better insight into how the service might be received in a real-world scenario.
What we learned
Several positive outcomes emerged from the workshops. Tenants understood the service, wanted to take part and were comfortable sharing their energy data. However, there were also some potential obstacles to engagement.
Specifically, some tenants had misgivings about the repayment fee, whilst others disliked the fact that the service didn’t allow them to switch energy supplier.
Further workshops examined these obstacles in more detail.
Through testing our business model concept, we learned that social housing tenants value the prospect of an energy efficient home. However, many also believe this to be a fundamental right, not something they should be expected to pay for.
We also learned that cost savings, agency and simplicity are vitally important key when it comes to creating a service that tenants will want to use.
Some ideas which could meet these needs included offering ‘opt in/out’ points, ensuring regular and meaningful consultation, and allowing tenants to choose their own energy supplier.
Next steps
We will apply learnings from the project and use the feedback to further refine our service design and business model.
Once we have incorporated the learnings, we hope to secure funding for a pilot project. By putting tenants and collaboration at the heart of our approach, we’re confident that this pilot project will prove a success.
From there, we can build a scalable business model to support a just transition in social housing across Scotland.