The huge backlog of applications for Green Homes Grant (GHG) vouchers means that the £320 million allocated for the scheme next year may be spent even though the scheme is due to close this week, Utility Week has been told.
At the weekend, the Department for Business, Energy & Industrial Strategy (BEIS) revealed that the GHG scheme will close to new applicants from tomorrow (31 March).
The government has said all valid applications received before 5pm through the scheme, which has been hit by a series of administrative hitches and delays, will be processed.
According to BEIS statistics published last week, 52 per cent of the 82,810 applications by households for GHG vouchers had been approved by the end of March.
However, the same release also shows that 28,277 vouchers for installing energy efficiency and low carbon heating measures had been issued, 27 per cent of the total applied for.
The government said at the weekend that it expects to issue vouchers worth a total value of £300 million by the time the scheme closes on 31 March.
It has also earmarked £320 million for the scheme in the 2021/22 financial year.
When this figure first emerged, critics pointed out that it was far smaller than the £1.5 billion originally earmarked for the GHG when it was launched last summer as the centrepiece of the government’s green recovery plans, even when combined with the sums due to be spent this year.
Caroline Bragg, head of policy at the ADE (Association for Decentralised Energy), told Utility Week that suppliers have been “frustrated” by the administration of the GHG since it opened.
She said: “However, they have persisted and the considerable work they have achieved means there is a large backlog currently to issuing vouchers. Once these are allocated, it may mean that a significant chunk of the £320 million allocated could be spent despite the scheme closing to new entrants. This shows the potential the scheme had if government had stuck with it.
“Lessons must be learnt in government and industry involved as early as possible in the design of the GHG’s replacement to ensure a simple scheme focussed on customers can provide the impetus the industry desperately needs.”
A spokesperson for Solar Energy UK told Utility Week that the GHG scheme’s cancellation will certainly hit solar thermal installations, which have been in decline every year since 2010 and were poised to get a real boost from the GHG scheme.
However, he said the Local Authority Delivery element of the GHG, which is due to receive an additional £300 million, will provide a net benefit to the solar industry as both PV and battery storage are eligible.
Jess Ralston, analyst at the Energy and Climate Intelligence Unit, said: “Scrapping the green homes grant with four days’ notice leaves a clear gap in the credibility of this government’s climate ambitions and could damage the public perceptions of home upgrades schemes for years to come, threatening our ability to deliver net zero. Not only leaving tens of thousands of families that were interested now with no way to access support, it’s also a kick in the teeth for businesses that bought into the scheme and invested in new workers trusting that the scheme would have longevity beyond six months.
“The pressure is now on to deliver a replacement that works, quickly, and by learning from mistakes from previous schemes instead of repeating them.”
Under the vouchers scheme, which received the lion’s share of the funding earmarked for the GHG, households were able to apply for grants of up to £5,000 in grants towards two thirds of the cost of installing energy efficiency and low carbon heating measures. A maximum of £10,000 was available for poorer households.