Whatever happened to the Green Homes Grant scheme, and what is happening next?

On the 31 March 2021, we were all shocked to hear that the Green Homes Grant (GHG) scheme was to close immediately. After initially being launched in September 2020, the programme had just been extended for another year to 31 March 2022. However, months of frustrating setbacks had left the scheme in complete chaos, with installers and homeowners struggling to install energy-efficient solutions within the rigid timelines.

What was the GHG?

As part of the government’s “green industrial revolution”, homeowners were offered GHG vouchers between £5,000 and £10,000 to fund up to two-thirds of the cost for energy efficiency improvements to their homes. The aim was to fund renovations for 600,000 homes in the six months between September 2020 and March 2021.

What happened?

The programme was plagued with issues right from its very rocky start. The scheme was postponed by one month to November 2020 that meant that homeowners were left with just four months to apply, receive approval and have work completed within three months of the application and before the deadline of 31 March 2021.

Applying was bureaucratic with lengthy wait times. Many of the GHG approved installers were inundated with an influx of new enquiries, and many were overwhelmed with the volume of work.

A report from the Department for Business, Energy and Industrial Strategy (BEIS) showed that by February 2021, over 123,000 applications had been received, yet only 28,000 vouchers had been issued and even

more disappointingly, only 5,800 installations completed. So the scheme was extended by one year to 31 March 2022.

It then came as a surprise to us all when the programme was suddenly scrapped. The GHG scheme achieved just 10% of the target to improve 600,000 homes in six months.

What have been the consequences?

Without the grant, many homeowners couldn’t afford to pay for the costs of the installations, so they cancelled the work. Installers and builders saw their pipeline of projects and expected income disappear overnight.

Many businesses had spent money on training and becoming accredited to be able to carry out GHG installations. Now they had to lay staff off, many fell into financial trouble and some even had to close.

Now the government is left with the grave problem of how to decarbonise the energy sector in order to reach our net-zero emissions target by 2050.

Changing to green energy generation won’t be enough to achieve this target. Recent figures show that for the UK to reach net-zero by 2050, around 19 million homes also need to become more energy efficient.

Experts agree that an alternative scheme will need to be created if the UK can get anywhere near the target.

So what now?

The government has stated they will still process and honour all GHG applications made before the deadline of 5 pm, 31 March 2020.

Promptly following the GHG cancellation came the £1bn decarbonisation budget to tackle industry sectors.

The government also issued a statement saying that an extra £562 million in funding would be released to local governments to implement their own retrofit schemes. In effect, this means 50,000 social housing and privately owned homes, can benefit from additional insulation, heat pumps and solar panels.

What will replace the Green Homes Grant?

If the UK is to reach net-zero by 2050, a similar, more well-implemented scheme must be launched. A replacement for the scrapped GHG is rumoured to be announced as part of the autumn spending review.

This is just one of a few incentives we at Efficient Homes would like the government to implement, including one to help eradicate fuel poverty by encouraging more community energy.

At Efficient Homes, we are committed to helping the UK reach net-zero by 2050. We are also dedicated to reducing your energy bills as well as your carbon footprint.

Please contact Efficient Homes on 0330 124 4651 or info@efficienthomes.org if you’d like to learn more.