When Boris Johnson gained power towards the end of 2019, he immediately announced a 10 point plan for a green industrial revolution in the UK. While by no means the first politician to promise such a revolution, he seemed adamant and his plans were detailed. Fast forward just a few months, critics are red with anger and the Green Home Grant is attracting huge criticism.
What is the Green Home Grant?
You will no doubt have noticed that, for some time, the watch word in political circles has been “green”. Green technology, green grants you name it; there is an environmentally friendly version of it. When Boris Johnson announced the Green Home Grant there was genuine hope we had reached a turning point.
The UK government has “committed” to net zero carbon emissions by 2050. Whether this will be pushed back remains to be seen, but at the moment there is a commitment. However, this will need households and local authorities in the UK to play their part. The introduction of heat pumps, Blue Raven solar panels and other green energy sources has been well received in general.
So, the government is on board, the public are on board and the scheme is in place. What is going wrong?
Who is eligible for the Green Home Grant?
It is fair to say that the UK government is throwing a relatively wide net over this particular environmentally friendly scheme. The following parties are eligible:-
- UK households
- Local authorities
There is particular focus on 600,000 households in the UK. Members of the public can claim Green Home Grant vouchers on the following basis:-
- Up to £5000 to cover two-thirds of the cost of replacing fossil fuel heating systems with renewable energy systems
- Homeowners on benefits can claim up to £10,000 of Green Home Grant vouchers
While the cost of the Green Home Grant scheme has been estimated at around £2 billion, in reality this will be chickenfeed compared to the long-term cost savings and reduced environmental damage. However, there seem to be problems with funding!
Outsourced to a US company, what can go wrong?
First of all, it is not uncommon for governments to outsource the management of various schemes to 3rd parties. However, when the UK government outsourced the Green Home Grant scheme to U.S. based ICF, eyebrows were raised. This is not a US company with a UK presence; this is a US company on US time, trying to service UK customers. Did anyone considered time zones?
This is just the tip of the iceberg. There are huge logistical and payment problems:-
- Green Home Grant applications from the public are being processed at a snail’s pace
- Renewable energy system installers are owed hundreds of thousands of pounds
- The scheme has been extended by 12 months, to 2022, because of the ongoing debacle
Yes, renewable energy system installers, from solar panels to underfloor heating, are owed millions of pounds from the scheme’s administrators. The idea is simple. A member of the public applies for a Green Home Grant. Successful applicants receive vouchers to cover part of the cost of their installation. These vouchers are passed on to the renewable energy system installers, with the balance paid by the client – and everyone is a winner. Not quite!
Companies going under
When the coronavirus took hold of the UK economy, many renewable energy system installers would have welcomed the Green Home Grant with open arms. A chance to see them through the choppy economic waters, grow their business and at least have some focus in the short to medium-term. If only it had turned out that way!
There are regular reports of companies owed hundreds of thousands of pounds by the scheme’s administrators. Many installations have been postponed which has led to unexpected job losses across the sector. The number of projects authorised by the scheme administrators is minimal compared to initial expectations/projections.
Opposition parties are now up in arms, the general public is now aware of the huge issues and the government is under massive pressure to make changes. It will be interesting to see what happens in the short to medium-term, how the government get this scheme back on track, and regain the trust of not only the general public but also the renewable energy sector.
There is no doubt that Boris Johnson came into government with many ideas, refreshing thoughts and plans for the future. The Green Home Grant was the headline, part of a 10 point plan to help achieve the UK’s net zero carbon emissions target by 2050. Unfortunately, unless the government acts quickly, changes scheme provider and “resets” applications, this could become a huge white elephant.
The foundations are shaking, funding is not going through the door and applications are being processed at a painfully slow rate. What will Boris do?