During July’s mini-budget, the Chancellor pledged £2bn for a “Green Homes Grant” scheme designed to improve the energy efficiency of up to 600,000 homes. At face value this was positive and welcome news, however, the detail of how the scheme would operate, eligible measures and other critical details were missing.
In a subsequent series of press releases on August 4th some, but not all, of this uncertainty has been removed.
The funding will be split to serve two discrete schemes:
Green Homes Grant Local Authority Delivery (LAD) scheme:
Of the £2 billion total announced, £500 million will be delivered through local authorities to reduce fuel poverty and support the installation of low carbon heating. The Local Authority Delivery scheme aims to improve the energy efficiency of homes in with EPC ratings of E and below.
The scope of measures is relatively open, although fossil fuel-based heating systems will not be eligible. Applications are open until September for the initial round of funding, which will be released on a project by project basis. Detailed guidance is available here.
Green Homes Grant Voucher scheme:
The larger £1.5bn proportion of funding will be provided to a scheme aimed at improving the energy efficiency of private homes. From September this year funding will be delivered by a voucher system with 2/3rds of the cost of a measure, up to a total contribution of £5,000 provided. Households in receipt of specified benefits will be able to apply for a fully funded package up to a value of £10,000.
Households will be able to install primary measures, which include insulation, heat pumps and solar thermal. In conjunction with the provision of a primary measure, secondary measures will also be eligible which include replacing single glazed windows, draft proofing, heating controls and hot water cylinder insulation.
To comply the work must be carried out by a Trustmark registered tradesperson, or in the case of heat pumps and solar thermal a Micro Generation Certification Scheme (MCS) registered installer.
Some outline detail is available here although more comprehensive guidance is still outstanding at this point.
Given that the UK has the least energy efficient housing stock in Europe it makes absolute sense to prioritise action with a “fabric first” approach; the cleanest kWh of heat is that which is not required.
We welcome the inclusion of heat pumps as an eligible measure as there is a clear need to grow the UK supply chain and skills base to support a wider role for this technology group as we transition towards net-zero. However, the scope of heating measures should be wider to better support consumer needs and include other key components such as hot water storage cylinders.
What is clear is that more concerted action is needed and further funding will be required to enable a sustainable and equitable transition for the whole of the UK housing stock. With this in mind, we see the Green Homes Grant scheme as an interesting start and await the publication of the BEIS Heat and Buildings Strategy, together with the outcome of the current Government spending review with interest.