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Green Homes Grants: Where did it all go Wrong?

In September 2020, the government launched the Green Homes Grants scheme. The initiative promised to improve the energy efficiency of 600,000 homes and create 100,000 green jobs in the renewable energy sector.

Six months later and the scheme has failed to live up to that promise. So far, only 20,000 vouchers have been handed out to successful applicants and funding is set to be cut by a massive £1.5 billion from April 2021.

So, what went wrong for the Green Homes Grant scheme?

Green Homes Grants explained

A Green Homes Grant entitles eligible homeowners to a voucher which covers up to two-thirds of the cost of various energy efficient improvements. Vouchers of up to £5,000 are available for most homeowners with low-income households being eligible to up to £10,000.

After your application has been approved, the voucher must be redeemed within 3 months or before the closing date of the scheme (31st March 2022), whichever comes first.

So, what went wrong?

On paper, the scheme sounds like a great way to improve the efficiency of existing homes and cut carbon emissions. However, after its launch, the problems began to reveal themselves.

Too complicated

Unnecessary complexity has put many people off when considering an application. On the whole, this is down to the scheme offering two different types of grant: primary and secondary.

A primary grant gives eligible homeowners a voucher to cover two-thirds of the cost of installing a renewable heating system or increasing the property’s insulation. Only once this work has been completed can a homeowner apply for the same level of funding to cover improvements listed as secondary measures.

These ‘secondary’ measures include the energy efficient improvements most homeowners want and need to be making: draught-proofing, upgrading single glazed windows, replacement doors and heating controls.

So, if you’re not looking to install a renewable heating system or insulation then you miss out on the opportunity to improve the efficiency of your home.

Little flexibility

Initially, the Green Homes Grant scheme was only going to run from 30th September 2020 to 31st March 2021. Not a particularly long time for homeowners to apply for a voucher, wait to be accepted, book a government approved tradesperson and then have the work completed.

Fortunately, the government soon realised that 6 months wasn’t long enough to improve the efficiency of 600,000 homes and extended the closing date by 12 months to 31st March 2022.

Despite the extension, Green Homes Grant vouchers only remain valid for 3 months from the date issued or until 31st March 2021, whichever comes sooner.

Homeowners still need to make a significant investment

Work covered by a Primary Green Homes Grant – the installation of a renewable heating system or increased insulation – tends to be expensive. With the scheme only covering up to two-thirds of the cost at a maximum value of £5,000 (£10,000 for eligible low-income households) a relatively significant contribution may still be needed on the homeowner’s part.

Once the primary measure has been completed, you can then apply for a Secondary Green Homes Grant. This covers smaller energy efficient improvements such as replacement doors, window improvements and draught-proofing. These are less expensive and don’t take as much time to have installed.

Few tradespeople have registered with the scheme

To apply for a Green Homes Grant, homeowners must first get a quote for the desired work from an approved tradesperson. Unfortunately, few installers have signed up to the scheme and many are waiting for approval.

For a tradesperson to be successfully accepted onto the scheme, they must be TrustMark registered and complete work to PAS and MCS standards. By the end of January 2021, there are only 929 approved installers across England following 1,669 company applications.

With so few companies registered with the scheme it’s plain to see how the scheme is failing to meet consumer demand.

Installers out of pocket

Some of the installers who have been able to successfully register for the scheme have found themselves out of pocket. This is due to delays in grants being approved once they’ve quoted on a job leaving those installers in a period of limbo.

Lack of ambition

The scheme was launched with the aim of improving the efficiency of 600,000 homes. There are around 30 million homes in the UK with about 19 million of these being poorly insulated. So only a fraction of these poorly insulated homes would see the insulation improved – even if the scheme handed out its full allocation of vouchers.

Unfortunate timing

The COVID-19 pandemic has proven difficult for people on both the homeowner and trade side of things.

Many homeowners have either been unable to allow tradespeople into their homes or hesitant to do so. Meanwhile, some trade businesses haven’t been able to take on so much work or stopped trading altogether for a period of time. This has prevented quotes from being given and work being carried out.

What’s the latest on the scheme?

The Green Homes Grants scheme is a long way from reaching its initial target of improving the efficiency of 600,000 UK homes. As of February 2021, only 20,000 vouchers have been issued according to the Environmental Audit Committee (EAC).

Things don’t look any brighter on the installer side of things. By November 2020, 1,200 installers were registered with the scheme but by February 2021, this had only risen to 1,300.

Funding is also due to be cut. From April 2021, funding for Green Homes Grants vouchers will go down by £1.5 billion to £320 million for the 2021/22 financial year.

Was the scheme worth launching?

Any scheme that helps to improve the energy efficiency of homes is worth pursuing. Unfortunately, the Green Homes Grant scheme appears to have gone about things in the wrong way and an opportunity has been missed.

The scheme has made the ‘quick wins’, such as draught-proofing and additional glazing, impossible to fund for homeowners who don’t need a renewable heating system or increased insulation. Plus, a property needs to be well insulated for a heat pump to prove effective and the Green Homes Grant hasn’t taken this into account.

If we’re to make greater strides towards net-zero carbon emissions then any future schemes will need to be more accessible to homeowners and tradespeople alike.

How will we be heating our homes in the future?

Future of home heating By 2050 it’s unlikely we’ll still be talking about Green Homes Grants but the home heating landscape is likely to be significantly different.

To achieve the government’s target of net-zero carbon emissions by 2050, the way we heat our homes needs to change. After all, our homes account for around 20% of UK carbon emissions.

The vast majority of UK homes currently burn fossil fuels for heat. Around 85% of homes rely on gas while a further 5 million off-grid properties rely on oil. Burning fossil fuels emits carbon into the atmosphere – a leading cause of climate change.

Fortunately, modern condensing boilers perform to highly efficient levels and convert more than 90% of the fuel into usable energy. This limits the amount of carbon emitted into the atmosphere while still effectively heating the property.

Condensing boiler technology can play a big role in lowering carbon emissions from home heating but around 6 million homes in the UK are still being heated by old non-condensing boilers.

Unfortunately, the Green Homes Grant nor the Clean Heat Grant (due to be introduced from March 2022) go any way towards helping homeowners to upgrade an inefficient boiler.

Instead, the focus of these grants is on renewable heating systems such as:

There’s no doubt that renewables have a big role to play in lowering carbon emissions yet installing them into existing properties would be costly and largely impractical.

A renewable heating system can be a considerable investment – even if two-thirds of the cost is covered by a Green Homes Grant. And before a heat pump is installed, the property needs to be well insulated, otherwise it will struggle to meet the heating demands of the home. This is because they heat water to lower temperatures than a boiler so large radiators or underfloor heating are recommended too due to the bigger surface area. As a result, retro-fitting older homes with heat pumps stands to be an incredible challenge.

A wiser move would be to make use of the extensive gas network which covers much of the UK. It currently delivers natural gas to millions of homes which, as we know, emits carbon into the atmosphere when it’s burned by our boilers. Replacing the natural gas with hydrogen – a gas that doesn’t produce carbon when burned – would go an incredibly long way towards reducing our carbon emissions.

Rather than an immediate switch to hydrogen, if this was to happen then it would likely begin with a hydrogen blend. A hydrogen blend would be 80% natural gas and 20% hydrogen delivered to our boilers through the very same pipe network we currently have in place. And all gas boilers manufactured since 1996 can continue to produce heat with a fuel that’s made of up to 23% hydrogen.

Should there be a complete switch to hydrogen then we would need hydrogen-ready boilers. These are already being developed by leading boiler manufacturers Baxi and Worcester Bosch who are also pushing for all boilers installed from 2025 to be hydrogen-ready.

So there are plenty of potential directions the future of home heating could take but a clear route to decarbonising our homes is yet unclear.

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