Government to Close Mismanaged Green Homes Grant Scheme Early

The government will reportedly shutter the Green Homes Grant scheme, the flagship programme of its touted green recovery, next month after it failed to produce many successful home upgrades.

The scheme was launched in September 2020, offering homeowners vouchers of up to £5,000 to cover at least two-thirds of the cost of home energy efficiency upgrades such as electric heat pumps and insulation. The scheme was expected to improve the energy efficiency of 600,000 homes, spending £1.5 billion, with an additional £500 million for local-authority led schemes.

The government estimated it would save participating homeowners up to £600 a year on their energy bills and up to 700kg in carbon emissions and support 100,000 jobs.

However, the scheme has been beset by failures. Builders and other tradespeople were reluctant to undertake a costly and time-consuming accreditation process to participate. A shortage of qualified and participating tradespeople meant homeowners have been unable to find labour in their local area. 

Participants have also waited months to be issued vouchers, and tradespeople have complained of long delays before being paid by the scheme. In a survey from trade body Solar Energy UK, 35% of tradespeople said those delays had threatened the viability of their business.

In November the government extended the scheme by a year, to March 2022, but then quietly opted not to roll over the unused funding to the next financial year. That would have left just £320 million available over the next year, enough for upgrades to just 80,000 homes.

But now The Times is reporting the government will scrap the scheme next month after it attracted paltry uptake.

Official figures from the Department of Business, Energy and Industrial Strategy (BEIS) confirmed that the scheme had received 69,200 applications as of the end of January 2021, had issued just 21,000 vouchers and seen just 2,277 energy efficiency measures installed in homes, just 0.4% of the 600,000 targeted. 

In a written answer to Parliament last week, the government said it had handed out just £94.1 million in vouchers to homeowners, out of the £1.5 billion of the originally allocated for domestic upgrades.

BEIS wouldn’t confirm or deny the closure of the scheme and attributed the low number of successful installations to the resurgence of the pandemic. A spokesperson for the department said: “The Green Homes Grant Voucher Scheme was designed to provide a short-term economic stimulus while tackling our contribution to climate change.

"However, the prevalence of COVID-19 since the scheme’s launch in September last year has led to an understandable reluctance on the part of the public to welcome tradespeople into their homes.”

Conservative MP Philip Dunn, chair of Parliament’s Environmental Audit Committee, said the scheme is a “good idea but its implementation has been woeful.” He encouraged the government not to claw back funding from the scheme, reminding it of its manifesto pledge to spend £9.2 billion on energy efficiency. "We have to deliver that or we won’t reach our climate change targets,” he said.