On 8th February the Government reluctantly admitted that it had issued just 20,000 GHG vouchers since the scheme began in Autumn 2020, immediately hampering efforts towards the PM’s ambitious 600,000 heat pump installations per year by 2028. Then just days later the situation was exacerbated when it was announced that hundreds of millions of pounds would be withdrawn from the scheme entirely.
When questioned in parliament as to whether the current GHG underspend of some £1.5bn would be rolled over into the next financial year, business minister Anne-Marie Trevelyan stated: “The original funding for the Green Homes Grant voucher scheme was announced as a short-term stimulus, for use in the 2020-21 financial year only.”
She went on to clarify that a paltry sum of just £320m had been set aside from March 2021.
The announcement was greeted with incredulity by industry professionals. Quoted in the Guardian, the chief executive of Solar Energy UK, Chris Hewitt, said: “A year ago the chancellor put £2bn on the table and, as it stands, three-quarters of that is about to taken away by the Treasury. Removing the £2bn pot would leave the businesses who have engaged with the programme in good faith out of pocket, undermine confidence in the industry, and ultimately cost more jobs than it delivers. The government must not pull the rug from underneath consumers and installers.”
It was a statement echoed by Phil Hurley, the chair of the Heat Pump Association – perhaps the renewable energy industry hardest hit by the decision. In a press release he said: “The Heat Pump Association is disappointed to see that unspent funding for the Green Homes Grant looks unlikely to be rolled over despite significant delays caused by the scheme’s administration rather than demand. This rollover would have demonstrated the Government’s commitment to improving UK homes through energy efficiency and low carbon heat and given the industry the time and confidence it needs to deliver the green recovery.”
Phil raises the prescient point that the government appear to be penalising the industry for an underspend that was entirely the result of mismanagement on their part. Speaking with Renewable Energy Installer before the announcement, chair of the Energy Efficiency Association, Kenneth Campbell, outlined failings of the scheme since the outset: “The Government has not acknowledged that the industry has been at a standstill since they made the announcement of the scheme on the 8th of July. Cashflow stopped when customers decided to postpone work until they could get vouchers. Further long delays in issuing vouchers and paying installers for their work have resulted in compounded losses for many installers. Some of our members have had to lay off staff while they wait for the process to be streamlined and for the promised payments to materialise. An unfortunate situation for any job creation scheme to be in.”
Kenneth went on to say that, whilst the concept of the scheme is broadly supported by the energy efficiency sector, the implementation has significantly undermined consumer trust in installers: “By refusing to communicate with installers from the start of the scheme, the industry has been left to fumble around in the dark, and this has dramatically undermined the confidence of consumers in their installers. The Scheme Administrator has even mistakenly told thousands of customers that their installers are unqualified and are over charging them, which is demonstrably not the case.
“The payment terms which the installers signed up to indicated they would be paid within five days of completing their work. However, on the 4th January BEIS changed the installer terms without informing the installers. Most installers have had to wait over 30 days for payments from BEIS, while at the same time the Department has published a demand that large corporations pay small businesses promptly. Having completed around 10% of their installs many installers are now refusing to carry out any further work under the scheme as their financial resources have been depleted and they no longer have confidence that the Government will pay them. A failure to roll over the promised funding does nothing to reassure them.”
Similar grievances have been widely shared across social media platforms by installers and the general public who feel completely let down by a scheme that promised so much: “I am looking for external insulation to my property, theres [sic] no-one certified within a 50 mile radius of me, I contacted all the nearest ones showing as working nationally […] they were all snowed under and only taking on local work…” Frankie Crawford
“We are a small insulating company that has struggled through the pandemic. When the green homes grant was announced we decided to go for accreditation and have since been inundated with enquiries. I have sent out so many quotes to the requirements of the scheme yet we are still waiting for even one voucher to be approved. […] This has nothing to do with Covid as all of our clients are willing to have this done. Its [sic] just a very inept scheme…” Claire Barker
Among the many disparaging comments by those let down, there are still those who have positively benefitted from the scheme: “I had my pitched roof insulated with foam and with 30 yrr Gaurentee [sic] done in January. I paid a third and the Government paid the rest to the installer. Great scheme. House is warmer and no doupt [sic] will increase my property value. […] Don’t forget there is another year one can still do it. It keeps people in jobs too. The guys who did my job say they are very busy.” Denny, Basingstoke
It’s a glimmer of hope that shows, when it goes right, the project has great potential but, as Philip Dunne, the Conservative chair of the environmental audit committee said: “Unless overhauled and further extended, this scheme will fail to deliver its ambition.”
Do you see a future for the Green Homes Grant scheme or is it doomed to failure? Get in touch with us here.