Hi, I’m Sarah Buchanan. I’ve joined the Make it Smart Hub as the project lead and your main point of contact.

We offer support to SME’s working in construction or manufacturing engineering to access free equipment and training resources, funded through ERDF supported by ICUHI and HIE. We also make connections with other businesses and have funding available.

Welcome to my monthly blog offering my analysis on current Scottish government policies and where the SME base in the construction and manufacturing sectors in Highlands and Islands can benefit. 

For an SME working in the rural economy recovering from Brexit is tough. Labour shortages, material scarcity and then on top of it all the pandemic - your challenges are very different from large companies with big budgets. Day to day survival means reading reports titled “Heat in Buildings Strategy” might not be the top priority of your day! But that doesn’t mean there’s not lessons or opportunities in there for you. And don’t worry, I’ve already read the report so that you don’t have to.  Every month I hope to take a different policy and highlight the opportunities for SME’s working in the sectors. I hope it helps save you some time, reading and looking up buzzwords, and gives you some ideas.

Before I look at one aspect of the “Heat in Buildings Strategy” I wanted to make a point about government policy in general. There is a lot of change happening in this world of ours but the current Scottish government direction is unlikely to drastically change for at least the next 5 years. I believe, in this world of uncertainty, this gives some assurances about the current policy drivers around climate change. This in turn gives SME’s assurances about the pipeline of investment.

So what your clients are going to be looking for over the next 5-10 years?

If we think of the money going from government to the public and private sectors through public sector budgets and private finance partnerships. This then flows to clients, main-contractors and the SME supply chain. For an SME long term pipeline is critical. Looking ahead there aren’t going to be any major changes of direction in government policy so this allows more informed decisions about where to spend your money. 

These major policy documents then are somewhere to look for de-risking your investment decisions. Take advantage as the market shifts in the next 2 or 3 years.

Rest assured whatever government is in place climate legislation and the reduction of carbon emissions will remain a priority. Whatever your own thoughts, as a business there are massive opportunities. I think we can all agree in the last few years, Scotland and the UK experience more instances of extreme weather. A very simple way to think of reducing extreme weather patterns is to reduce carbon in the atmosphere.

Scotland declared a climate emergency in 2019, the first country in the world to do this. This means we have set legally binding target for reducing our carbon emissions. Just to make this challenge even harder (after all we Scots do love a challenge) we have set them 5 years ahead of the UK. A Net Zero economy by 2045.

But what is this Net Zero everyone keeps talking about?

Just another buzzword or something as a business we can look to as an opportunity?! If I’m honest I think it’s both. Net Zero means the greenhouse gases (carbon) going into the atmosphere are balanced by removal out of the atmosphere. In real terms, for the average person living their life, it means making changes to how we travel, what we buy, reducing our waste and changing how we use energy.

For construction as an industry it means changing the way we design new buildings to make them use less energy and choosing low carbon materials which use less energy to produce. We also need large scale retrofitting of existing buildings to reduce energy demand. The Scottish Government anticipate most buildings in Scotland will use a net zero emission heating system by 2045. Today however the majority of Scotland’s homes are heated using mains gas, oil, LPG or solid fuels. Only around 11% of households have a renewable or low emissions heating system. This presents a huge challenge to deliver the targets set out in the Heat in Buildings strategy. One of which is to reduce household emissions by 28% by 2030. We also need to include non-domestic buildings to achieve the 68% reduction in overall emissions from buildings by 2030.

Gas boilers are well understood and have been around for years so people know how to fix and maintain them. However, the UK has some of the least energy efficient buildings in Europe. At present we are wasting a huge amount of energy to heat buildings which are drafty and old. Heat pumps (an electric system) however are a much more complex system which require the system to be designed first to suit the lay out and energy requirements of the building. Calculations need to be made such as heat loss calculations, hydraulic balancing, flow temperature calculations, and heat system sizing. It is not a case of simply swapping over the system which means they take longer to install and are currently more expensive.

And the biggest opportunity: who exactly is going to fit low carbon heating?

The numbers of heat pumps required to be installed in Scotland over the next 10 years are quite simply staggering. Installations need to increase from around 3000 a year to 200,000 per year. It’s been estimated we need at least another 30,000 plumbers apprenticeships over 10 years. This doesn’t include the training and certification of people already working in the industry with transferable skills for example gas engineers.

Scottish Government says ”The transition to low-carbon buildings could add £6 billion GVA (gross value added) and support 175,000 skilled, green jobs by 2030. It will create new markets and supply chains for innovative products fit for a Net Zero future, and as these markets grow, the UK may have greater export opportunities in sectors where we have particular knowledge, experience or expertise.”

For SME’s the heat pump market both for design and installation is something to consider as an area of investment. There are plenty of grants available for training and certification and demand is growing.

If you would like to find out more about the opportunities in heat and net zero, please also feel free to This email address is being protected from spambots. You need JavaScript enabled to view it.