Why we must learn from the failure of the Green Homes Grant

26 April 2021

The government’s decision to axe the Green Homes Grant just six months into its run is a disappointing blow for the home-grown renewable energy sector.

MCS played a key part of the much-heralded scheme, which was touted as a core part of the government’s 10-point plan for a so-called ‘green industrial revolution’.

We all know how difficult the initiative was: confusing to navigate for installers and consumers, who both faced a huge administrative burden.

Ian Rippin, chief executive of MCS, discusses the failure of the Green Homes Grant and provides his view on how the government must act to better support installers in the race to net zero by 2050.

How we currently heat our homes is one of the highest contributors to our individual carbon footprints.

Installing renewable heat and energy technology can play a significant role in helping to make our homes greener for a more sustainable future.

To tackle home emissions, Chancellor Rishi Sunak first announced the Green Homes Grant in July 2020 as a central component of a green recovery out of the COVID-19 lockdown.

The programme intended to encourage the uptake of domestic renewables, cut people’s energy bills, reduce CO2 emissions, and create 100,000 green jobs. A win-win for all involved.

Let’s be honest, the Green Homes Grant was a non-starter from day one. It was a poorly executed, short-term solution for one of the most significant environmental challenges the UK faces.

MCS worked extremely hard with government to support the scheme, which had the potential to provide vital assistance to our sector following a difficult year for installers.

Ultimately, it proved impossible to make the fundamentally unworkable initiative work.

It comes down to the fact that our colleagues at the Department for Business, Energy and Industrial Strategy (BEIS) were challenged by the Treasury to put an ambitious policy in place in just a few short weeks.

Another key flaw was that the grant was mired by administrative hurdles that were overseen by an outsourced company with no direct industry experience.

The stats speak for themselves. Data on Green Homes Grant uptake to the end of February 2021 shows there were applications for more than 123,000 vouchers, with just over 28,000 issued and 5,804 installations. Of these installations, only 906 were for low-carbon heat measures.

What is clear is that poorly planned, short-term solutions are not the way forward for the industry or consumers in the fight against climate change.

The government may aspire to achieve net zero but doing so will take more than aspiration. A zero-carbon future requires direct action, working in partnership with industry.

What’s next?

In our latest report – Renewing Britain – we highlighted that we won’t reach net zero carbon by 2050 unless urgent action is taken.

The report found that, as things stand, it would take more than 250 years for small-scale renewables to reach every household in Britain at current deployment rates.

With government schemes like the Green Homes Grant coming and going, not providing the much-needed stability the sector needs, we are currently swimming against a very strong tide.

We want to continue working with government to make future incentives work. We have already provided in-depth feedback on behalf of installers on why the Green Homes Grant failed.

With careful consideration and forward planning, consumer incentive schemes for renewable heat and power can be effective.

Take the Domestic Renewable Heat Incentive (DRHI), for example. Opened in 2014, the scheme was in a design and testing phase for years before it launched.

Feedback from our installers is that, though it had teething problems in the beginning, these have been ironed out to deliver a well-designed scheme that offers a good incentivisation to install low carbon heating.

Admittedly, uptake under DRHI has been slower than expected, but the application process works; it is well managed by government and respected by industry. Our installers don’t want the DRHI to be wound down for these very reasons.

However, in March 2022 the DRHI comes to an end, with the new Clean Heat Grant expected to take its place.

If we are serious about meeting the incredibly ambitious net zero targets and boosting the green economy with new jobs, we must ensure this next scheme is a success and, importantly, forms only part of much longer term, ambitious government policy for the environment.

As planned, the Clean Heat Grant will be a simpler scheme than the Green Homes Grant, but it still lacks ambition, and is only positioned as a transition policy for two years until March 2024.

The time is now to create a strong, future-proofed, long-term consumer incentive scheme for renewables that is simple to understand, easy to access and designed in conjunction with industry.

I outlined my vision for consumer incentive schemes in a previous blog post. It’s all in the planning and rooted in collaboration with experts – the installers on the ground, doing the work.

At MCS, our aim will always be to support installers, call for policy improvements and encourage more homeowners to invest in home-grown energy.