What we can learn from final evaluation of the Green Homes Grant Voucher Scheme

The final evaluation of the government’s short-lived Green Homes Grant Voucher (GHGV) scheme has been published, and it raises some interesting issues, not only about that particular scheme, but about the future direction of energy-efficiency retrofitting for UK homes.

What was the GHGV scheme?

The GHGV scheme ran from September 2020 to March 2021. Households could apply for a voucher worth two-thirds of the cost of specific energy-efficiency improvements, up to a total value of £5000 (or £10,000 for those on low incomes). It was conceived as a job creation and job protection scheme during the pandemic, as well as a means of growing the retrofit market, and helping the country move towards its Net Zero goals.

Domestic energy consumption accounts about a fifth of all the UK’s greenhouse gas emissions, and 30% of the UK’s total energy budget. There are two main ways we can do reduce energy use in our homes: installing low-carbon heating systems powered by alternatives to fossil fuels (such as heat pumps); and making our homes more energy efficient by means such as insulation. Both of these things can involve significant upfront costs. So, the GHGV scheme sought to enable people to reduce their energy use by contributing to the cost of these low-carbon and energy-efficient improvements.

Previous schemes

It is not the first such scheme; there have been many Government green schemes and retrofitting initiatives over the years. To name just a few: Retrofit for the Future, Scaling Up Retrofit, the Centre of Refurbishment Excellence (CoRE), the RE:NEW programme, the ECO scheme, the Each Home Counts review, Build Back Greener, the Green Deal Home Improvement Fund, Warm Front, retrofit supply chain pilots and the Whole-House Retrofit competition.

Whole-house approach

The Department for Business, Energy and Industrial Strategy (BEIS) was slowly building up a knowledge base from such schemes – primarily from realising what didn’t work. One of the key learnings was that a whole-house approach to retrofitting is the best way forward if subsequent ventilation problems are to be avoided and maximum energy efficiencies gained.

Unfortunately, in the febrile atmosphere of 2021, that was not the approach adopted when setting up the GHGV scheme. It was drawn up and implemented over just 12 weeks, and the haste with which it was set up negatively affected the scheme’s impact. BEIS was also working on the EU exit and drawing up a Covid vaccine taskforce at the same time, which probably didn’t help. And this did all take place mid-pandemic.

What went wrong?

The scheme was subject to a previous evaluation by the National Audit Office (NAO), which revealed just how few installations were actually made. Although the GHGV scheme was allocated funding of £1.5 billion – enough to improve 600,000 properties – only 113,739 voucher applications were made. And half of these didn’t result in any installations because people found the process took too long and/or there weren’t installers available and qualified to do the work within the timeframe of the scheme. In the end, 49,355 measures were installed in 43,168 households over the scheme’s life, which closed less than a year after it opened.

To take part in the scheme, homeowners had to identify a suitable installer and apply for the voucher, and the installer could claim the money once the work had been done. Problems arose because it took too long for applicants to get their vouchers, and there was a shortage of qualified installers to do the work.

It took an average of 137 days for the first applicants to get their vouchers. And when the scheme opened, there were only 250 installers registered to take part. (By the time the scheme closed, there were 1000, but this was still well short of the number that would have been needed for all the installations envisaged.) Installers were put off participating by the cost of certification and the fact the scheme was only going to last six months. Those contractors who did sign up complained of long delays in getting their payment.

The (NAO) evaluation concluded: “The government has identified decarbonising home heating as a key part of its plan to deliver net zero by 2050. In establishing the GHGV scheme, the Department worked at an ambitious pace to deliver a scheme which would contribute to this long-term aim while delivering a short-term economic boost. However, the tension between these two key aims and the short delivery time was never properly reconciled leading to an overly complex scheme that could not be delivered to a satisfactory level of performance in the time available.”

Without wanting to say, we told you so. We did, in this article about the ending of the scheme.

The ultimate cost to the taxpayer was £314 million. The NAO said: ‘The government should be prepared to limit or delay the launch of a programme if the evidence suggests it is not ready. Previous government attempts to deliver energy-efficiency schemes, such as for the Green Deal, have amply illustrated the difficulties of achieving successful delivery in this area. It is important that the Department and HM Treasury heed the lessons from this, and previous schemes, for any future domestic decarbonisation programme.’

Other learning points

The latest evaluation document, published by the Department for Energy Security and Net Zero, includes survey data from scheme participants that reveals many useful learning points for anyone interested in improving the energy efficiency of Britain’s old, cold and draughty homes going forward. Here are some of the interesting take-aways.

Comfort taking

The scheme has confimed that the energy savings from schemes like this often turn out to be less than predicted because of something called ‘comfort taking’. This basically means people tend to take advantage of improvements by keeping their homes warmer than they did before, rather than channelling all the efficiency gains into savings.

Different savings

According to data collected, the energy (and thus bill and carbon) savings varied from measure to measure: air-source heat pumps and external wall insulation generated clear energy savings. Solar thermal installations on the other hand had no observable effects on energy consumption.

Increased wellbeing

Most householders reported the work done improved the comfort and warmth of their homes. But there were differences according to what work participants had done. Only 55% of those who had installed heat pumps found their homes to be more comfortable post-installation, and 16% felt their homes were less comfortable. Similarly, 41% of the heat-pump group considered their house warmer and 26% considered it colder. Nevertheless, 88% of those who had got air-source heat pumps in the scheme reported satisfaction with their heat pumps.

Effect on fuel poverty

Of course, the GHGV scheme took place before recent surges in energy prices. However, the evaluation found that even though it succeeded in attracting low-income households at risk of fuel poverty, because most people only installed one energy-saving measure, these on their own were not enough to lift most of the low-income participants out of fuel poverty: ‘To have made a bigger impact on fuel poverty it would have needed to support multiple measures that would have resulted in greater energy-efficiency improvements.’

Effect on energy consumption

Researchers took before and after readings from smart meters of 2,500 people participating in the scheme, and reported: “Only some of the measures installed…had an observable effect on energy savings, and only in households that had gas central heating prior to installation.” The average reductions for different types of insulation in gas-heated homes, were:

• external solid wall insulation – 3.3 kWh/day (9.9% reduction)
• cavity wall insulation – 1.9 kWh/day (5.8% reduction)
• loft insulation – 1.4 kWh/day (4.2% reduction)
• pitched roof insulation – 1.3 kWh/day (4.7% reduction).

None of the other individual insulation measures had an observable effect on electricity or gas use in the gas centrally-heated homes.

When it came to air-source heat pumps, on average, homes previously heated by gas central heating saw a reduction in gas consumption of 26.8 kWh/day (95% saving) and an increase in electricity consumption of 6.2 kWh/day (46.3% increase).

The evaluation report also says that “the energy savings from solar thermal installations were too small to detect within the scope of this sample. This may also be an expected result, as solar thermal is a hot-water technology rather than a space-heating technology, and the typical domestic energy consumption associated with water heating is much lower than space heating.”

Carbon emission savings

The scheme is calculated to have generated the following total carbon savings from all installations:

• air-source heat pumps: 4,709 tonnes of CO² equivalent a year,
• external solid wall insulation: 1,912 tonnes of CO² equivalent a year,
• cavity-wall insulation: 444 tonnes of CO² equivalent a year,
• loft insulation: 776 tonnes of CO² equivalent a year,
• pitched-roof insulation: 622 tonnes of CO² equivalent a year.

Bill savings

This table shows the average bill savings of people who took part.

Measure	Gas bill savings (£/year)	Electricity bill savings (£/year)	Total bill savings (£/year)
Air-source heat pump	721	-692	29
External solid wall Insulation	88	No effects observed	88
Cavity-wall insulation	51	No effects observed	51
Loft insulation	38	No effects observed	38
Pitched-roof insulation	36	No effects observed	36

Although air source heat pumps produced the largest energy and carbon reductions, they led to the smallest bill savings. This because the price of electricity is so much higher than that of gas.

Quality of work

Using the Trust Mark scheme and registered installers seems to have prevented problems with substandard installations. Most installation work was done well.

Lessons

The report concludes: “Overall, the scheme generated societal benefits which modestly outweighed the costs of the scheme. The analysis of impacts on employment suggests, similarly, that, overall, the employment benefits monetarily outweighed the spending on the scheme. However, for some households, the costs of participation are likely to outweigh the monetary benefits derived.”

In terms of changing behaviour, the survey results suggest homeowners and landlords did work that they had been thinking about but had no firm plans to do before the scheme. The scheme also seems to have changed consumers’ choice of measures by providing information about measures they had not heard about before. While the Green Homes Grant scheme has ended, households can currently receive support through the Great British Insulation Scheme, and the Boiler Upgrade Scheme.