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On the 31st of March 2021 the Government brought the Green Homes Grant scheme to a close, a year ahead of schedule. The Green Homes Grant was a mechanism designed to kick start the UK economic recovery from Covid 19 with sustainability at its core.

By most accounts, the scheme has achieved little else than to disrupt and frustrate the industry and further erode confidence of investors in renewable energy. The above graphic from Regen illustrates the stark reality and the scale of the problem at hand and how insignificant the impact the scheme would have had even if it had been successful. In their response to the collapse of the scheme, Regen said “The shambles of the Green Homes Grant illustrates the importance of a clear policy framework appropriate to the scale of the challenge of upgrading the UK’s leaky homes.”

With £1.5 billion set aside to implement the Green Homes Grant, and only £391.3 million of the money committed to spend, there was £1.1 billion left in the pot. This money has been sucked back into the treasury we assume. However, around 70% of it has been pushed into the more successful Local Authority schemes around the country.

Whilst we all await the long overdue policy on decarbonising our heating, we have been considering where else they could have put our money. Here are our suggestions.

Extend the Domestic RHI Scheme: The Domestic Renewable Heat Incentive has been extended to 31st March 2022 and this remains the best subsidy currently available to install a heat pump in a domestic setting.

Redesign and Reintroduce a better thought-out grant: The idea of the Green Homes Grant was welcomed by the industry until we discovered the amount of red tape associated with it. Three accreditations were required in order to offer the vouchers. Although isoenergy saw a massive increase in enquiries, it rarely led to new work. We would like to see an upfront grant, easy to claim for relevant installations without having to jump through hoops. This would reduce the capital costs to the client and would help reduce the gap between cheaper fossil fuel alternatives to renewable energy systems. Perhaps they need to consult industry on the best way to administrate the grant rather than trusting an overburdened regulator.

Funding Renewable Heat Networks project: It has been suggested that funding will be made available for renewable heat networks to be promoted in the industry by 2023. Renewable heat networks usually involve a shared source of renewable energy and either a single large-scale generator of useable heat such as a heat pump or multiple smaller heat pumps sharing this single source of renewable energy. Funding in this area should promote whole communities transitioning to renewable heat generation and hence could begin to have an impact on the scale that the government requires to hit the ambitious target of 600,000 heat pump installs.

Public Sector Funding: The Public Sector Decarbonisation Fund is set to have a huge impact on the way we heat our schools, museums and hospitals. With over £171 million handed out in grants by Government to cover the entire cost of projects to introduce sustainable heating technologies to these types of buildings and further rounds recently launched, this is an area that Government are clearly focussing on and the industry welcomes the straightforward nature of the scheme and its requirements. However, that pot of money is either already spent or allocated to projects, so without further funding will fall flat, wasting the effort of companies like isoenergy who have refined the process of installing large scale projects like the Royal Alexandra and Albert School in Reigate.

This blog often talks about the lack of clear direction from the government on renewable heating projects. Without it, investment in the industry will be limited as will our ability to hit the massive targets laid out and ultimately will not see the reductions in carbon emissions from our heating that we need to meet our climate change obligations.