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Is the New Green Homes Grant All It's Cracked Up to Be?

(Image credit: getty images)

In July 2020 the government announced the Green Homes Grant - a £500m scheme to help homeowners improve the thermal efficiency of their home. A grant of up to £5,000 is available to all homeowners, including long-lease and shared freehold properties, to help cover the cost of insulation, double or triple glazing and low carbon heating systems. 

The maximum grant rises to £10,000 for household where at least one of the occupants are receiving a disability allowance. 

The grant is actually for two thirds of the cost of the work, up to a maximum of £5k.

More recently the government has also announced the formation of their Simple Energy Service to advise homeowners on what should be done. This service will also tell the homeowner what measures will be eligible, although it is not compulsory to do all or any of the recommended measures. 

(MORE: Get bespoke advice for grant-eligible home improvements)

The Complexities of the Green Homes Grant

The scheme appears simple and generous but there are complexities. 

It is scheduled to run from September 2020 to March 2021, the same date that the Renewable Heat Incentive was due to end. The closing of the RHI scheme to new entrants was then put back to March 2022. 

However, if the Green Homes Grant is used to part-fund a low carbon heating system – heat pump or solar thermal array – then that installation is no longer eligible for RHI. 

As an example, a solar thermal array would attract around £2,900 in RHI payments over 7 years, but the Green Homes Grant would only cover £1,900 of a £3,000 capital cost. 

A further complication is that the home needs to have “adequate” insulation to qualify for the low carbon heating grant, but there is as yet no clear definition of what would be deemed adequate.

In effect this appears to mean that the homeowner, especially the low-income homeowner, is in an either/or situation. Either insulation or a heat pump and either the grant or RHI.

(MORE: Renewable Energy Guide)

How Does the Green Homes Grant Compare to The Green Deal?

While this scheme looks simple and generous its predecessor, The Green Deal, looked equally simple if less generous, but collapsed after woefully poor take-up.

This new scheme is intended to reach 650,000 homes but the difficulties involved in applying for a voucher, getting advice on what could be done and what would be eligible, finding an installer and getting the work done may prove too much for some homeowners. And there is only 6 months to get it all done.

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