Green Homes Grant Scheme - has the government hit the mark this time and, if so, how will they meet demand?

Having announced the £2billion Green Homes Grant Scheme as part of his Summer Statement, Chancellor Rishi Sunak now faces a potential oversubscription in the scheme. 

A recent poll by YouGov has found that 62% of homeowners are interested in the scheme; which will provide vouchers worth up to £5,000 for energy efficiency and heating measures.

Why has this scheme gained so much public interest when other schemes have not? Will the uptake be as high as the poll suggests or will it fall flat like some of its predecessors? And, if it proves to be as popular as the poll suggests, how will the funding stack up against that demand?

The Green Homes Grant Scheme will offer 600,000 vouchers, by way of a grant, to households for improvements including insulation, double glazing and heat pumps, without the need for repayment. While a free home improvement is likely to be high up the list in terms of why this scheme is proving to be so popular, factors such as increased working from home patterns and the overall benefit to the environment that an increased energy efficiency will provide, must not be forgotten

The popularity of the scheme is in stark contrast to the Green Deal, a ‘Pay-as-you-save’ type scheme introduced in 2013 by the Department of Energy and Climate Change. Having carried out 300,529 initial assessments, the scheme resulted in only 1,815 ‘live’ plans and a spectacularly low conversion rate of 0.6%. Perhaps the government have learnt their lesson and are now taking a different approach by offering households a free energy efficiency upgrade, while also making a concerted effort to take a step towards meeting its 2050 carbon emission reduction targets.

Amidst the positivity surrounding this scheme, we should err on the side of caution in considering whether the suggested interest will actually materialise. Although it would appear to be a ‘no-brainer’, the current economic uncertainty may well prove to be the deciding factor for a large proportion of UK households. Nevertheless, this should be viewed as a positive sign.

What does seem clear is that, even if a conservative approach is taken to the suggested uptake, there could be a possible ten-fold demand over supply, leaving the funding to fall significantly short of where it needs to be. With this coming at a time where so much funding is being provided to many different parts of the UK economy, it would seem unlikely that the government will be in a position to stump up the extra funding, should it be required. Only time will tell whether the 600,000 vouchers on offer as part of the scheme will meet the demand of UK households…