On the surface, the UK Government's announcement that it is pumping £2bn (£3bn if you include the Local Authority Delivery Scheme) into the UK retrofit market is what we all what to hear. Investment in England's (oddly, the rest of Britain has not been included in the scheme) old leaky housing stock is just what is needed. You could argue about the sums, France is investing £9.5bn and Germany £34bn in similar schemes, but not the motivation. Invest cash in the right areas to stimulate the economy, so we can #BuildBackBetter. Great Plan!
So why the woe-betide headline? Read on as our Chair, Toby gives us his take on the Green Homes Grant.
Well, it would seem this scheme has been conceived by the Treasury and its focus is stimulating the economy to bounce back from a 20% drop in GDP. Hence the desire for all this cash to be spent by March 2021. This is about a turbocharged injection of money into the economy, not necessarily about delivering the best green scheme devisable. And there is the problem! To date, there has been a two-page release on the GHG scheme and a handful of webinars. The full rules of this scheme are due later this month or maybe even in September. Homeowners and the industry are being asked to plan and market for something that they do not fully understand.
Remember, for most homeowners, this intervention offers up to £5000 of grant funding, which can be 2/3 of the cost of installation. This sounds incredibly generous until you consider that the two most pressing needs for English (sorry Wales, NI and Scotland) housing are improving insulation and moving away from gas central heating to renewable heat. Exterior wall insulation will cost double that £5,000 and an air source heat pump (ASHP) three times that amount. Let's not even get started about ground source heat pumps (GSHP). So the Government is asking homeowners to find £5,000, £10,000 or more from their own pocket during the biggest recession the UK has seen. That is not going to be easy in a six-month time frame.
Then consider when this work is likely to take place. Surveys will need to be carried out, grant applications posted, and finding slots with installers will be challenging. October will flash by with barely a penny being spent. So we will be into the dark winter months before the scheme really gets started. Anyone fancy changing heating systems in December? How about having your windows replaced as a snowstorm hits in January? I know, let's leave it until March when the weather is better and the days are longer. Hold on, but what if my installer does not show up, as he is offered a bigger job?
Then add into that COVID-19, local lockdowns and the likelihood of a second wave and things look incredibly difficult.
Now, look at this from an installer perspective. How much any energy and finance do you put into supporting this scheme? What if you spend a few thousand pounds marketing your services only to be faced with a 3-month lockdown? What do you do if a client approaches you in Feb/Mar 21? Will there be shortages of kit or profiteering by wholesalers? How does the scheme work and how long will it take to get the £5000 form BEIS? Do I spend time and money going through the process of getting Trustmark approved only to find no interest form the public?
I was on a webinar hosted by MCS last week and the general feeling was installers would only support this scheme begrudgingly and would not put their full resources behind it.
My biggest concern is that this scheme will attract the profiteers and cowboys. Poor installs and subsequent negative press could set back nascent technologies like heat pumps for years. MCS is there to protect consumers against bad installs but surely they do not have the resources to review a targeted 600,000 homes in six months.
Another worry will be that homeowners get technologies forced on them and not necessarily the ones that are right for their homes. Funding limitations may also encourage them to make less than optimal choices. This scheme could be a boost for the dying solar thermal sector, as installs typically cost only £3,000-4,000, so work well within the parameters. But there is a reason why solar thermal is dying, the technology has incredibly long payback, saving households only £100-150 per year (20-30 year paybacks). Yet the timescales of this scheme encourages solar thermal over heat pumps, which can pay back in 7 years.
So what can consumers do? Well, I would suggest reaching out to your local community energy group. These groups are driven not by profit but reducing carbon and creating cohesive communities. They will assess your home for the best technologies for your budget and help with additional funding routes. They will be also able to recommend installers they have worked with previously and who will be keen to do a good job, so they can keep working with these groups in the future. The other tip is START NOW! The sooner you know what technologies you are applying for the better.
Londoners can reach to us at email@example.com for more advice. We would also recommend BHESCO if you live in Sussex or Kent, SELCE in South East London and Power Up North London if you live in North London. You can find a group near you by visiting https://communityenergyengland.org/