Green Homes: White Knight or White Elephant?
Author: Chris Coxon
Senior building products marketer, Chris Coxon, takes a look at what the Government’s Green Homes Grant (GHG) initiative means for the construction supply chain
In July Rishi Sunak announced £2 billion of support through the Green Homes Grant (GHG) designed to save households money, cut carbon; and create green jobs. To re-cap, the grant is comprised of up to £1.5 billion of support through energy efficiency vouchers of up to £10,000 per household (the higher amounts for low income families). Up to £500m of support is allocated to Local Authority delivery partners (LAD) planned in two phases during 2020/21 and 2021/22. The goal is to improve the least energy efficient housing stock – those with a current EPC of E to G.
Details continue to emerge, but the implications for Construction and building products are becoming clearer, and with it the inevitability that some sectors are set to benefit more than others.
Primary & Secondary measures
After much anticipation around what would be included and why, the Primary and Secondary energy efficiency measures confirmed are:
Primary measures
Wall and roof insulation, air source heat pumps, ground source heat pumps and solar thermal measures.
Secondary measures
Windows & doors, draught proofing, hot water tank insulation and thermostats.
With at least £5000 on offer for a Primary measure, Green Homes is more generous than its predecessors and is likely to be more attractive to consumers, provided that a) they are made aware of it and b) the application and implementation process is easy – known shortcomings of the Green Deal.
Priorities, priorities, priorities
From what is included in ‘primary’ and ‘secondary’, it’s clear that Green Homes is prioritising renewable energy product categories. This will stir the debate about ‘fabric first’ - improving the building structure - versus adding renewable products, and which is most effective for improving overall energy performance. But for manufacturers of ‘primary measure’ products Green Homes will provide a welcome and timely boost to demand, which can only be positive.
The benefits for ‘secondary measures’ and businesses elsewhere in the supply chain may be less certain. Consumers will need to apply for secondary measures after they have chosen their primary measures. The voucher funds available may be minimal, once the primary measure costs are considered. Official help for consumers with advice and the applications process will be through the Simple Energy Advice service, from ‘later in August’. Creating adequate consumer awareness of how to obtain vouchers must also be a priority to ensure that take up.is successful.
Those involved in secondary measures are likely to experience limited benefit. With glazing for example, vouchers only cover replacements for single-glazed windows and doors fitted before 2002. This excludes the ‘second time replacement’ windows market – the largest and highest growth segment. The number of homes remaining with single glazing is less than 10% of housing stock, yet the majority of ‘first time replacement’ double-glazed windows fitted since the 1980s don’t achieve an ‘E’ energy rating. Given the importance of windows and doors to the overall EPC rating of a property, incentivising more widespread upgrading to higher energy standards would make a bigger impact, if windows and doors were a priority.
What does it mean for installers?
This week it was confirmed that Green Homes installers will need to be Trustmark or Microgeneration Certification Scheme (MCS) certified. At the time of writing, this means approximately 1000 installers can take part in Green Homes, a small proportion of the total operating in the combined primary and secondary measure sectors. That’s great for those already registered and Trustmark/MCS, but we know the industry is very fragmented at installation level, so can other installers capitalise on the opportunity in the current timescales of the scheme and how will they know where to get support? Does the scheme have the infrastructure capacity to support them? Otherwise potentially the large building and installation contractors will thrive while survival for the small installer will get that bit harder. This sounds familiar – it was essentially the same dilemma with the Green Deal.
How fast Is the clock ticking?
Government announcements have stated that vouchers for homeowner improvements will be available from the end of September until 31 March 2021. This is a relatively rapid timeframe for an initiative of this size, launched so soon into a post-lockdown world. The end date is surely political, designed to allow flexibility in the next Budget. With the validity period of vouchers unclear and the logistical and communication challenges apparent, a question is how many installations can be completed before 31 March 2021. An extension to the timeframe seems probable, if the grant is judged a success by the time of the Budget.
So, what can we conclude now? That Green Homes is attractive and welcome in concept, but the execution needs more planning and communication if we are to avoid a sense of déjà vu.