Green Homes Grant closes on 31 March: the industry responds

The Green Homes Grant Voucher Scheme, launched last year, will close to new applications on 31 March at 5pm. BEIS said the scheme “was designed to provide a short-term economic boost while tackling our contribution to climate change. Applications made before the end of March deadline will be honoured and any vouchers already issued may be extended upon request.” BEIS said that to date 96,000 applications have been made and 39,000 vouchers  issued and it expects to issue vouchers worth a total value of £300 million by the time the scheme closes.

Making the announcement it promised to add £300 million to the  £500 million Green Homes Grant Local Authority Delivery Scheme aimed at helping households with an annual income of under £30,000 make their homes more energy efficient.

Delivered through the Green Homes Grant Local Authority Delivery Scheme and Social Housing Decarbonisation Fund Demonstrator, this will include green home improvements such as deep insulation, heat pumps and solar panels, helping cut over 70,000 tonnes of carbon from the atmosphere each year.

Jess Ralston, Analyst at the Energy and Climate Intelligence Unit (ECIU) said:“Scrapping the green homes grant with four days’ notice leaves a clear gap in the credibility of this Government’s climate ambitions and could damage the public perceptions of home upgrades schemes for years to come, threatening our ability to deliver net zero. Not only leaving tens of thousands of families that were interested now with no way to access support, it’s also a kick in the teeth for businesses that bought into the scheme and invested in new workers trusting that the scheme would have longevity beyond six months. 

“The pressure is now on to deliver a replacement that works, quickly, and by learning from mistakes from previous schemes instead of repeating them. There’s a good understanding of the issues with the Green Homes Grant and the sector has the ability to respond, so a well-thought-out successor could unlock huge economic and environmental potential. The UK’s housing stock is in a sorry state and many of our European neighbours have effective energy efficiency policy – so we really have no excuse for not coming up with something that actually works.”

Caroline Lucas MP, Green Party, said on Twitter:  ”What staggering incompetence – Ministerial heads should roll Government now has no plan for tackling one of biggest sources of climate emissions, fuel poverty continuing, businesses facing ruin. And 7 months before #COP26, a catastrophic lack of leadership”.

Nick Molho, Executive Director of the Aldersgate Group, said: ”The premature end of the Green Homes Grant is a significant disappointment. Improving energy efficiency and slashing heating emissions from the UK’s homes is a vital, foundational step on the journey to achieve net zero emissions. It is also one of the most promising avenues to create jobs in the near-term as the UK economy recovers from the impact of the pandemic. There are many reasons for the difficulties encountered by the Grant, a key one being the lack of an adequately skilled supply chain, itself caused by the absence of a long-term policy on energy efficiency and low carbon heat for many years now.

“Beyond the funding provided to local authorities for low income households, the Government must rapidly provide a new, long-term solution for ‘able to pay’ homes. This must include urgent investment to develop energy efficiency and low carbon heat installation skills across the supply chain, binding regulatory standards to require all UK homes to operate at low levels of carbon emissions by 2035, and targeted fiscal or funding incentives to make it attractive for home owners to green their houses. An ambitious Future Homes Standard policy will also be essential to ensure all new homes are ultra-low carbon from the outset. Without a detailed and long-term policy to drive low carbon investment in homes and buildings, the UK will simply not be able to put itself on a pathway to net zero emissions.”

Emma Pinchbeck, Chief Executive, Energy UK said: “It’s good to see the government recognise that energy efficiency is critical to delivering their own Net Zero target, and that the local authority scheme under the Green Homes Grant was working well.

“However there was real enthusiasm from the public for the Green Homes Grant, and scrapping it before it got off the ground will undermine trust. Secondly, £300m is not enough to close the gap with the Government’s own net zero target.

“We must see further action if we are to decarbonise our homes so we hope to see bold commitments in line with the scale of the challenge in the forthcoming Heat and Buildings Strategy.”
The government has struggled with mechanisms to upgrade the UK’s housing stock. Tim Rotheray, Director of Innovation and Regulation at Viridor UK and former director of the Association for Distributed Energy, proposed instead that there should be an obligation and a deadline on homes to achieve efficiency if the house is sold. He said that way the house would have to upgrade on sale (when empty) and the mortgage provider, who would require it to be done, could add to the loan  to get the efficiency work done – a relatively small addition to the mortgage. He said, “With homes selling on average every 8 years, such an approach could transform the housing stock and create jobs right across the UK. With a stable legislative framework billions of investment would be willing to pour in.”

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