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Will the Government’s Green Homes Grant help make homes warmer and cheaper to run?
COVID has had many impacts on us all, however, there is some hope that the Government's ambitious recovery plan can bring with it benefits to compensate, and bring changes that may make us more resilient as a society in the future. The £2 billion Green Homes Grant voucher scheme is one such financial recovery package that was announced to stimulate the construction industry, and at the same time help resolve the societal ills of cold homes, carbon intensive heating and high fuel bills.
I am Head of Energy Efficiency and Policy in the Leeds Sustainability Institute (LSI) in the School of the Built Environment Engineering and Computing, and so I was particularly interested in looking into how much this voucher scheme would actual improve UK homes, and if it would be significant enough to help the Government achieve its policy targets, specifically, getting all homes to an Energy Performance Certificate (EPC) of Band C by 2030.
The LSI have over 30 years’ experience in evaluating energy use in buildings and so we are well placed to undertake modelling into the effectiveness of the Government’s domestic energy efficiency policy. Indeed we are currently delivering one of the UK’s largest ever retrofit evaluation schemes, a £2.8 million project into the benefits and costs of whole house retrofits, on behalf of the Department of Business, Energy and Industrial Strategy. We decided to design a mini, hypothetical, experiment to understand the national impact of the Green Homes Grant voucher scheme.
Firstly, Dr Kate Morland produced a series of EPC models of a standard three bed semi-detached house. She varied the efficiency of the house and looked at the impact of different retrofits, which could be installed under the voucher scheme, made on fuel bills and energy ratings. Using this data, Dr Adam Hardy then extrapolated these improvements in EPC scores to the UK housing stock using data from the national EPC database.
Our research found that in homes with poor energy efficiency; i.e. EPC grades of D, E and F, the voucher scheme funded retrofits could improve EPC substantially, often up to a C grade. However, if already energy efficient homes took up the voucher scheme, then little difference to their energy efficiency would be made and very few homes would see an improvement in their EPC grade. This finding hints to the phenomenon of diminishing returns; i.e. the biggest savings come from the most inefficient houses. To maximise “bang for buck” the Government perhaps should have only allowed people living in inefficient (EPC D or lower) homes to access the grant, however, this may have been seen as unfair, and perhaps limited the uptake of the scheme. It is plausible, therefore, that this policy design was more focussed on getting the construction industry moving after lockdown, rather than on reducing people’s fuel bills.
One final finding from our research, which was perhaps the most illuminating for the casual observer, was that the £2 billion fund was a mere drop in the ocean. The scheme will only stretched to fund retrofits in around half a million homes, and these will not even be to a net zero carbon standard, twice as much may need to be spent per home to achieve zero carbon. Given that there are around 28 million homes in the UK, and that most of which will need some kind of retrofit to meet zero carbon levels, one can begin to see the scale of the problem. The investment needed to meet the challenge facing the domestic energy efficiency policy is immense, perhaps in the order of hundreds of billions of pounds.
The Green Homes Grant is therefore simply too small and unfocussed to make any meaningful impact on national targets, though, of course, it may still be seen as some kind of success, if it does improve the energy efficiency of hundreds of thousands of homes. Beyond the findings of this research, there remains many questions around the method of delivery of the retrofits in the Green Homes Grant voucher scheme; the proposed deadline for vouchers to be redeemed is already looming, the quality of the retrofits being delivered is currently uncertain, and it appears there is unfortunately some scope for fraud. The Green Homes Grant therefore may not solve all the problems, it may even create a few more, and it is fair to say that there remains a long way to go to crack the nut of domestic energy efficiency policy. I’m not sure I agree with the saying, “It’s not easy being green”, I think being green is not so difficult, it’s the getting there that is hard.
For more information on this research and other research projects being undertake at the LSI, please contact Dr David Glew.
Dr David Glew is a Reader in the Leeds Sustainability Institute, part of the School of Built Environment, Engineering and Computing at Leeds Beckett University.
About Leeds Sustainability Institute - With research expertise developed over two decades, the work of Leeds Sustainability Institute explores areas including social policy, low carbon building, materials, green computing, renewable energy and sustainable infrastructure.
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Professor David Glew
Professor Glew is Director of the LSI and Head of Energy efficiency and policy.
