SCOTS are addicted to our household gas boilers. Authorities want to wean us off our dirty little central heating habit.

The Scottish Government, for example, will start phasing out fossil fuels for warming new homes as early as 2024.

But there is a hitch.

One of the most obvious alternatives to inefficient single-home gas boilers are district heating systems, where hot water is pumped around multiple properties. However, there is a tax disincentive for such schemes. One that has put local and national authorities at loggerheads.

Glasgow City Council, which has set itself a target of getting to zero-net carbon by 2030, wants to invest in district heating. However, if it does so, it will have to pay out non-domestic rates. That is because district heating systems are regarded as businesses and taxed - remarkably, say city insiders - more than the utilities which supply gas or electricity to personal boilers.

The city bought and paid for a district heating system for the neighbourhood created as a legacy of the 2014 Commonwealth Games. This hefty gas-fired system heats hundreds of homes as well as the landmark Emirates indoor sports arena.

That comes with a tax bill of first £137,000 a year and now - thanks to a Scottish Government cut - £70,000. The city has decided to take this on board, so that residents do not pay. But officials stress they cannot foot the tax bills of the network of district heating systems they would like to encourage, perhaps under a municipal energy firm.

The Herald:

Site of proposed district heating scheme in Clydebank

Councillor Anna Richardson explained: “District heating systems have clear potential to deliver cheaper, cleaner energy into people’s homes.

“Having communities across the city linked to single sources of warmth, rather than homes relying on individual boilers, would undoubtedly support Glasgow’s effort to decarbonise.

“But the way district heating systems are treated in the local tax system acts as a deterrent to them being used more widely.

“Unfortunately, under present rules, installing district heating systems brings in significant new non-domestic rates and that adds unduly to the cost of heating homes.

“Most district heating systems and individual gas boilers both draw their energy from the gas network, but homes heated from a district system are effectively penalised.

“At the Commonwealth Games Village, a 50% rates rebate agreed by the Scottish Government has helped, but until district heating systems are competitive with conventional gas heating we won’t be able to move forward.

“We need the government to cut through this problem if district heating systems are to contribute to the city’s drive to achieve carbon neutrality.”

The Herald:

Games Village The problem was flagged up in an official report on Glasgow’s energy consumption earlier this year.

Officials said: “It should be noted that there still remains a serious issue with regards to the application of non-domestic rates on district heating networks.

“Currently district heating is not classified in the rates system as a utility and is valued based on its construction cost.

“This results in district heating networks, especially in low density areas, attracting high rates costs, thus diminishing their competitiveness against conventional utilities.

“This matter has been taken up with the Scottish Government on a number of occasions.

“Officers from the Council will continue to lobby for a change to how the rates system categorises district heating.”

The Scottish Government insists it supports district heating. It also defended its non-domestic rates regime and insisted councils had powers to cut rates.

Its spokesman said: “We have taken a leading position in supporting the deployment of heat networks – including through our District Heating Loan Fund, Low Carbon Infrastructure Transition Programme and Heat Network Partnership.

“We are committed to a fair and sustainable non-domestic rates regime underpinned by the most generous package of non-domestic rates reliefs available anywhere in the UK.

“This package is worth an estimated £750 million in 2019-20, up from £732 million in 2018-19, and includes the Business Growth Accelerator and UK’s only relief for district heating.

“Councils have wide-ranging powers to reduce the rates paid by any ratepayer in their area, following the Community Empowerment Act 2015.”

First Minister Nicola Sturgeon has said her government will introduce a bill to attract investment in to heat networks.

Most northern nations have developed traditions of communal heating, whether a boiler room in a multi-occupancy building or district systems.

Scotland has Europe’s worst record on renewable heat.

New statistics reveal the country – despite an excellent record on clean electricity – remains dangerously dependent on burning climate-change-causing gas to stay warm

Only six per cent of all heating in Scotland is sustainable, just a tenth of the proportion in Sweden, the best performing nation in the EU-28.

This is in sharp contrast to the country’s high levels of renewable and clean electricity.

There are, however, innovative district heating systems being developed, including in Clydebank, where electric heat pumps will use the river Clyde to warm up homes and offices.

Glasgow, like most Scottish cities, has below-average carbon output but recognises that removing inefficient heating systems from city homes will be a challenge as it mobilises to tackle the climate emergency.

City insiders believe - tax issues aside - a return to municipal economies of scale could help smooth over the transition. Traditional city tenements, almost all of which have their own boilers, present significant difficulties, insiders admit.