Issues with the Green Homes Grant that can’t be ignored
The announcement of a £3 billion “green investment package” was welcome news in this week’s emergency summer budget. The scheme taking the lion’s share of this money is the Green Homes Grant, a £2 billion subsidy for home energy efficiency improvements in England, beginning in September 2020. This is intended to create jobs while cutting homeowners’ energy bills and reducing the carbon footprint of the English housing sector. Details of the grant so far are limited – but we’ve looked into the issues and questions that need to be addressed.
It’s too little, too late
A scheme like this is long overdue. UK homes are among the oldest and most expensive to heat in Europe. Only a tiny proportion of UK homes (less than 1%) have an “A” rating for energy efficiency. Last year, the Committee on Climate Change estimated that it would be cost-effective to install cavity wall insulation in six million UK homes. This scheme aims to help just 600,000 households: a tenth of the ambition required. (Of course, it only applies to England.)
It’s not actually new money
The Conservative’s December manifesto promised to spend £9.2 billion on the energy efficiency of homes, schools and hospitals. We have heard very little about it since. So, while it is welcome news that the Chancellor is allocating £2 billion for homes, it’s nowhere near what was originally promised.
We don’t know exactly what it will pay for
We don’t (yet) know exactly which energy efficiency improvements are covered by the Green Homes Grant. “Loft, wall and floor insulation” are given as examples on the government website, but we don’t have a complete list of which kinds of improvements would get the subsidy.
We don’t know exactly who can get it
The Treasury have said that they expect the fund to upgrade over 600,000 homes across England, so we can assume that lots of people will be eligible for it, but we don’t know yet exactly what the eligibility criteria will be. When the grant is up and running, people will be able to apply for the grant through the government-endorsed Simple Energy Advice website and find out their eligibility that way, but it would be helpful to have some clarity now.
Renters can’t apply
Although we don’t know exactly who can apply, we do know that people who rent their home can’t apply; the scheme is for owner-occupiers and landlords. This means that the 8.5 million households in the private and public rented sector are excluded from the Green Homes Grant. They may benefit anyway if their landlord uses the scheme to make improvements, but it doesn’t change the fact that they can’t directly access the scheme to get a warmer home and lower energy bills.
People in social housing may not benefit at all
Shadow business secretary Ed Miliband commented that the scheme does “almost nothing” for people who rent social housing or private accommodation.
It isn’t yet clear if the funding will be available for social landlords such as housing associations and councils, but it’s unlikely: the Chancellor announced a separate £50 million to find an approach to greener social housing. It is a fraction of the £3.8 billion promised in the Conservative manifesto – we hope to see more funding brought forward soon.
It won’t cover the full cost of any work
It seems as if for most people the vouchers will cover about two-thirds of the cost of an energy efficiency improvement, up to a ceiling of £5,000 per home. That’s a big subsidy, but we don’t yet know if householders will rush to get home improvements done if they still have to lay out a significant chunk of their own money at a time when jobs are threatened. Low income households will get more help (up to £10,000 which can cover the full cost), but we don’t know exactly who qualifies as “low income”.
There are no details on accreditation
We currently don’t know how the government will ensure that the contractors doing work funded by the Green Homes Grant are properly qualified.
Julie Hirigoyen, Chief Executive at the UK Green Building Council said: “It’s crucial to avoid the mistakes of previous retrofit schemes by ensuring that all measures and installers under the scheme are properly accredited and deliver real improvements.”
Some kind of accreditation scheme may be announced in the coming weeks, but as yet we don’t know. Since people will be spending their own money on the work, this kind of reassurance will be needed to boost take-up of the scheme.
Hopefully between now and September, when the scheme is due to start running, the Treasury will fill in the details on the scheme that are currently lacking – but they can’t retrofit ambition into this ultimately limited scheme. We hope the next Budget will see some bigger thinking on energy efficiency.
The Summer Economic Update – digested: Listen in to BiU’s CEO Michael Abbott and colleagues as they discuss the Chancellor’s latest announcements, with a focus on green jobs and hospitality sector.