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 To read more, visit www.clearview-uk.com 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