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The Green Homes Grant: what happened?

The Green Homes Grant is no more. So exactly what happened to the scheme?

By Christina Chrysostomou | 26 February 2021

Five months after the Green Homes Grant (GHG) scheme was launched in September 2020, figures released by the government showed that just 2,600 homes had energy-efficiency measures or low-carbon heating installed by the end of January 2021. If this rate of project completion had continued, fewer than 12,000 homes would have benefited from the initiative by the end date. This would have been far below the potential 600,000 households government target. Originally set to run until March 2021, the scheme was extended to 31 March 2022. But it was scrapped with the last deadline for applications at 5pm on 31 March 2021.

Two air source heat pumps provide space heating and solar thermal panels provide hot water, souparchitects.com

Two air source heat pumps provide heating for this house designed by Soup Architects

Insulation had been the most popular measure. Figures showed it made up 88 per cent of the installations. Low-carbon heating such as air-source heat pumps and solar thermal panels comprised just 12 per cent.

Five months after the Green Homes Grant (GHG) scheme was launched in September 2020, figures released by the government showed that just 2,600 homes had energy-efficiency measures or low-carbon heating installed by the end of January 2021. If this rate of project completion had continued, fewer than 12,000 homes would have benefited from the initiative by the end date. This would have been far below the potential 600,000 households government target. Originally set to run until March 2021, the scheme was extended to 31 March 2022. But it was scrapped with the last deadline for applications at 5pm on 31 March 2021.

Two air source heat pumps provide space heating and solar thermal panels provide hot water, souparchitects.com

Two air source heat pumps provide heating for this house designed by Soup Architects

Insulation had been the most popular measure. Figures showed it made up 88 per cent of the installations. Low-carbon heating such as air-source heat pumps and solar thermal panels comprised just 12 per cent.

Image: The Mitsubishi Ecodan Air Source Heat Pump has a heat output of 8.5kW, les.mitsubishielectric.co.uk

Green Homes Grant: rate of uptake 

£2 billion of government funds was originally allocated for private homes. A further £1 billion set aside for public housing. The wider scope of the initiative being to upgrade the UK’s existing housing stock. This was part of the drive to reach net-zero emissions by 2050 and reduce fuel poverty in low-income households. ‘More than 26,000 Green Homes Grant vouchers worth £110 million have already been issued, helping us improve the energy efficiency of homes,’ said a spokesperson for the Department for Business, Energy & Industrial Strategy (BEIS) in February 2021. ‘We continue to work with the scheme’s administrator to ensure voucher applications are processed as quickly as possible.’

Too few installers

The scheme was promoted as a way to create work for accredited tradespeople. But it had been criticised by homeowners and industry organisations alike for the low numbers of certified installers. ‘The government will clearly be disappointed that a scheme designed to create 100,000 new jobs has fewer than 1,000 building companies on board. A flash-in-the-pan policy doesn’t give small builders the confidence they need to invest in the necessary accreditations and training,’ said Brian Berry, CEO of the Federation of Master Builders.

No shortage of consumer interest

According to the heat pump industry, the Green Homes Grant succeeded in raising consumer awareness of low-carbon heating. But following media reports that the initiative was to have funds withdrawn and the scheme cut short, it called on the chancellor to retain the scheme. The industry wanted unspent funds rolled over into 2021-22 or to otherwise increase the second year budget. It also wanted BEIS and the Treasury to work with the industry to review and reform the initiative’s terms and conditions.
‘Under appropriate commercial conditions, uptake in participation by installers will climb. Awareness and demand from the public is there to be serviced,’ said Bean Beanland of the Heat Pump Federation at the time. ‘As with all government interventions, give the industry an extended period of stable policy and the heat pump sector will deliver growth, training and secure new employment.’

Payment delays

The grant was paid to installers on satisfactory completion of the approved work. But with some installers having experienced a delay in payment, reluctance to commit to gaining TrustMark accreditation, along with the cost of doing so, was an ongoing issue. ‘To ensure the highest standards of service, ministers have asked the scheme administrator to pay money owed to installers and sort the processing of applications as a matter of urgency,’ said a BEIS spokesperson.

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