Across the Highlands and Islands, the cost of running a home is shaped by more than the price of energy. A house that loses heat quickly, is difficult to ventilate, or depends on expensive heating can be harder to keep warm, dry and comfortable.
In rural and remote communities, distance, weather and fuel delivery costs can add further pressure, especially where there are fewer local installers available when work is needed.
The Highland Climate Change Risk & Opportunity Assessment (HCCROA) sets out why these pressures matter for the region’s future. It describes climate-related risks to household finances, businesses, infrastructure, supply chains and public services, with impacts expected to grow over the coming decades.
Home energy improvements and retrofit sit within that wider picture because they affect how homes use and manage energy. In the Highlands and Islands, where many homes are older, harder to treat and more expensive to heat, the way energy efficiency improvements are planned and delivered has a direct bearing on household costs and comfort.
Seen through the HCCROA, energy efficiency measures and retrofit are part of climate adaptation as well as carbon reduction. Homes that need less energy are less exposed to high and unpredictable heating costs. Suitable ventilation can also help manage damp, indoor air quality and comfort during warmer weather. This makes retrofit relevant not only to bills, but to how homes cope as the climate changes.
The Highland Energy Community Partnership (HECP) brings this into a Highland delivery context. Through HECP’s supply chain research, the financial risks described in the HCCROA can be seen in the practical realities of rural retrofit. The research looks at what helps work move from advice or interest into completed improvements, and what causes that process to slow down or stop.
Household finances and the cost of running a home
In the HCCROA, household finances are treated as a high current and future risk in the region. Climate change is linked to pressure on household budgets through energy, housing, insurance, food and transport costs, as well as the cost of damage and disruption from extreme weather.
That risk is especially important in the Highlands because many homes are already costly to heat. The HCCROA notes that around 61% of properties are off the mains gas grid and rely on oil, LPG or electricity for heating. These households can be more exposed to changing fuel prices, higher rural delivery costs and disruption during severe weather.
HECP’s work shows how these pressures can play out at household level. In one case study, a social tenant in a small rural Highland village was struggling to stay warm in a draughty home while managing health conditions.
Her heating oil refill had risen from roughly £400 to around £900, making budgeting harder and increasing pressure on the household. Support through HECP included emergency heating support, advice on heating and hot water controls, a Priority Services Register referral, draught-proofing support, and work to explore further improvements that could reduce heat loss and oil use.
As part of HECP’s supply chain research, available Energy Performance Certificates (EPC) records from the national database were reviewed for 5,748 domestic properties in the partnership area. 83% were rated EPC band C or below. This is a useful indication of the scale of potential home energy improvement work across the communities included in the project.
Where a home loses heat quickly or is difficult to ventilate, it can take more energy to keep it warm, dry and comfortable. Rural delivery costs and changing fuel prices can then add to the pressure. Improving the way a home holds heat, manages ventilation and uses energy can reduce that exposure, while efficient heating systems, controls and generation technologies can help households get more useful warmth and comfort from the energy they do use.
Although the HCCROA is clear that household finance opportunities are more limited than the risks, it does point to better support around energy use and reduced heating demand in some circumstances. Through HECP’s work, those opportunities depend on whether households can turn advice, funding and interest into completed improvements.
Read the Highland Climate Change Risk & Opportunity Assessment
The assessment tells the story of climate change in the Highlands, from present day right up to 2080. It combines scientific data, economic analysis, regional expertise, and lived experience to understand both risks and opportunities across this timeframe.
Economic stability and the retrofit supply chain
Alongside household finances, the HCCROA sets out risks to Highland’s economic stability from climate impacts on transport, key industries and supply chains. It also describes risks to the movement and availability of goods, materials and essential resources.
In HECP’s work, these wider economic risks are reflected in the local delivery system needed to improve rural homes. Retrofit does not only depend on the availability of an installer. It also depends on whether work can be planned, funded and completed in a way that is practical for both the householder and the business carrying it out.
Across the region, many households are already taking steps to retrofit their homes. However, HECP’s supply chain research, based on interviews with 25 businesses involved in energy efficiency, renewable energy and retrofit work, found an active supply chain under pressure. Businesses described rural jobs being shaped by the availability of suitable products, the ability to coordinate trades, the cost left to the householder and the financial risk attached to funded work.
In rural and remote areas, a delayed part, a missed visit or a change in schedule can quickly add time and cost to a job. Local and experienced regional businesses can help reduce those pressures because they understand the homes, routes and working conditions involved. They also help keep more of the value of retrofit work within Highland communities, rather than relying on businesses travelling in from elsewhere.
Skills and training sit within this wider supply chain issue. 17 of 25 businesses interviewed identified skills, training and local workforce capacity as important for strengthening delivery over time. Businesses described training as most useful when it leads into work that can realistically be delivered locally.
This workforce issue also connects to wider concerns about population change. The HCCROA notes that remote and rural areas face challenges linked to ageing populations, labour shortages and the need to sustain local services. It also describes opportunities to strengthen the regional workforce and revitalise local economies where population movement and employment support are planned well.
Finance, affordability and access to support
Access to finance and insurance is also treated as a high risk in the HCCROA. Climate change could make cover, lending and recovery from damage more expensive or harder to access, especially as flooding, storms and other impacts increase. The assessment also points to financial inclusion measures, affordable credit, adaptation-focused lending and collaboration between public bodies, lenders and insurers.
For households considering energy efficiency measures or retrofit, access to support can shape whether improvements go ahead. In rural and remote areas, the cost of work can be affected by the type of property, the availability of installers and the time involved in reaching the home.
HECP’s supply chain research found that funding gaps could cause projects to stall, particularly where the available support did not meet the actual cost of the work. Some businesses described customers reducing the scope of work because of affordability, whilst businesses themselves noted that funding processes also influence what installers and businesses can take on.
Installer Experiences in Remote and Rural Communities
This report from the Highland Energy Community Partnership examines how tradespeople and companies experience the supply chain in the Highlands. It draws on the experiences of the local installers, tradespeople and small businesses, who are essential to delivering energy efficiency improvements in remote and rural communities.
What happens next?
The next stage is about moving from evidence to practical solutions. Some actions may be local, such as improving coordination and strengthening networks between installers, communities and partners. Others may need regional or national conversations, particularly where barriers are linked to funding, accreditation, standards or policy.
HECP’s supply chain report notes that wider systemic issues, particularly those linked to funding, accreditation and national policy, will require clear evidence to be communicated to external bodies and decision-makers.
Advice and funding can help households take the first step, but the route to completed improvements still needs to work in practice. Retrofit has to be planned around the realities of rural delivery, with support systems that make sense for both householders and the businesses carrying out the work. Financial resilience in the region depends on that wider system, not only on short-term help with bills.
Energy efficiency measures and retrofit can support warmer, healthier homes that use less energy and cope better with changing weather. The wider opportunity is to make sure the Highlands and Islands has the skills, supply chain and support needed to deliver that work at the scale and quality local communities need.