Green Homes Grant fails to deliver
The Green Homes Grant, which was announced in August 2020 in reaction to the pandemic, has failed to deliver the expectations of BEIS.
The grant offered was too low to attract householders and proved awkward and unprofitable for installers. The administrative barriers erected limited the issue of vouchers to a tiny fraction of what was originally intended.
Delays in making payments damaged the installation industry and put back the Government's ambitious plans to achieve Net Zero carbon emissions.
The Green Homes Grant was cancelled on 31 March 2021. The failure of the Green Homes Grant follows the failure of the Green Deal. The Government has not yet announced what plans it has to fullfil the Ten Point Plan or address the urgent problem of addressing Climate Change.
Green Homes Grant
The Green Homes Grant had planned to give homeowners in England a voucher to install one or more of the following "primary categories" in existing properties:
- solid wall, under-floor, cavity wall or roof insulation
- air source heat pump or ground source heat pump
- solar thermal
In addition owners could use their voucher for further "secondary categories" on:
- double or triple glazing/secondary glazing, when replacing single glazing
- upgrading to energy efficient doors
- hot water tank/appliance tank thermostats/heating controls
Owners could only use their voucher for "secondary categories" up to the value they have spent on "primary categories".
The voucher could have been used to pay two-thirds of the cost of these improvements up to a value of £5,000. Those on low incomes can receive the full cost up to a value of £10,000.
Suppliers needed to be registered with TrustMark or the Microgeneration Certification Scheme to take part in the scheme.
BEIS had said the scheme was expected to deliver improvements for over 600,000 households, while creating an estimated 100,000 jobs in green construction. To have 600,000 homes install a heat pump in six months would have been a great start. However, that would still leave around 24 million needing to be converted to low carbon heating.
Opportunity for heat pump installers
The Green Homes Grant was presented as agreat opportunity for heat pump installers.
Beware, however, that funding for the Green Homes Grant is limited to £2bn and that there may be no follow-on after 31 March 2022 (extended from 31 March 2021 on publication of the Green Industrial Revolution on 18 November 2020).
Opportunity for house owners
This is a great opportunity for householders who have been considering a move to low carbon heating. This is now a great time to invest in a heat pump and benefit from lower running costs. It is also an opportunity to invest in a heat pump when a grant is available, because there is likely to be a time in future when it will not be possible to buy a replacement gas boiler.
Remember that to provide effective and efficient heating, a heat pump must be installed by someone who knows what he is doing. It is also important to understand the complexities of combining the Green Homes Grant and the Domestic RHI.
Can you claim for both the Green Homes Grant and the domestic RHI?
Yes, you can claim for both the Green Homes Grant and the domestic RHI. The cashflow advantage of the Green Homes Grant is that you can receive payment of up to £5,000 when the heat pump is installed. The advantage of the RHI is that you can receive a larger sum – but spread over seven years from the date of installation. BEIS has confirmed that Ofgem will want to deduct any sum received from the Green Homes Grant for the heat pump installation before it pays sums due for the RHI.
See also Sustainable energy
See also Renewable Heat Incentive