Clearview North September 2014 - Issue 154 | Page 19
INDUSTRYNEWS
Government closes Green
Deal Home Improvement Fund
following surge in demand
The government has closed its Green Deal Home Improvement Fund
(GDHIF) on 25 July after a surge of interest in the energy efficiency
grants saw around £70m of applications lodged in just a few days.
The decision sparked anger
across the energy efficiency
industry, which accused the
government of once again
changing policy at short
notice.
The government announced
earlier in the same week that
the £120m GDHIF had seen
£50m of vouchers assigned since
the scheme’s launch last month,
offering households up to £7,600
towards the cost of energy
efficiency improvements.
Ministers announced that
they were cutting the cashback
offer for solid wall insulation
improvements by £2,000 to
£4,000, but the warning that
the scheme’s available budget
was being quickly eaten up
evidently sparked a surge in new
applications.
A spokeswoman for the
Department of Energy and
Climate Change (DECC) said
the government had received
around £70m of applications in
the past few days and as such the
responsible thing to do was to
close the scheme to ensure that
‘The sudden
and immediate
closure of this
fund is another
setback for
the energy
efficiency
industry’
everyone who had applied could
receive a voucher.
Official figures confirmed that in
thethree days prior to the closure,
the DECC received applications
from around 9,500 households,
taking the total value of voucher
applications to £118m, just shy of
the scheme’s £120m budget.
Unconfirmed reports have
suggested some companies may
have been applying for vouchers
on a speculative basis, in the hope
that they could then convince
households to make use of the
grants by undertaking Green Deal
improvements.
But the DECC spokeswoman
insisted that the early indications
were that the bulk of vouchers
that were applied for were being
used. “The trend to date is that
a large proportion of the people
applying do take and then use the
voucher,” she said. “We want to
make sure that for everyone who
has applied we can honour the
voucher.”
Parliamentary Under Secretary
of State for Energy and Climate
Change, Amber Rudd said the
surge in demand for the GDHIF
underlined the success of an
initiative that was designed to
drive interest in the Green Deal
energy efficiency financing
scheme.
“The Green Deal Home
Improvement Fund is a world
first and in a short space of time
it has proved extremely popular,”
she said in a statement. “We were
always clear there was a budget
which is why we encouraged
people to act quickly. As a result,
thousands more families will now
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benefit from government help to
have warmer homes which use less
energy.”
On 24 July, the Green Deal
Finance Company confirmed that
it has seen a significant increase in
demand in recent weeks and was
now awarding over £1m worth of
financing plans a week.
But the sudden closure of the
scheme deals another blow to an
energy efficiency sector already
reeling from last year’s watering
down of the Energy Company
Obligation (ECO) scheme and
the initial failure of the Green
Deal to drive anticipated levels of
demand.
‘£50m of vouchers
assigned since the
scheme’s launch
last month’
“The sudden and immediate
closure of this fund is another
setback for the energy efficiency
industry because companies have
specifically geared up to market
and deliver through this scheme,”
said Richard Twinn, Policy and
Public Affairs Officer at the UK
Green Building Council. “These
constant changes are not helpful
to industry.”
The government said it would
monitor the level of voucher
redemption rates and decide
whether there is budget remaining
to launch a further offer in the
coming months. The DECC
spokeswoman said that as
households are likely to redeem
the vouchers in the coming
months the scheme will result
in a pipeline of work for energy
efficiency firms.
The surge in applications,
however, will raise questions
over the government’s initial
decision to offer up to £7,500 to
households - an offer ministers
themselves admitted was
generous.
Twinn said ministers now had
to clarify whether they would
bring forward more money to
“ensure continuity of Green
Deal work” or risk applications
to the financing scheme slowing
down once again. “This does
demonstrate that we need longterm drivers, not short-term pots
of cash to avoid this continual
cycle of boom and bust