Grant delays putting businesses under pressure

A survey of industry members involved in the installation of technologies eligible under the Green Homes Grants scheme has reinforced claims that administrative delays are behind the low deployment of £1.5billion worth of vouchers, with more than 100,000 vouchers applied for as a result of work already undertaken by installers. To date, only 20,000 vouchers have been issued and even fewer payments for completed work have been made. The survey of 194 companies has revealed that:

·        Almost three-quarters (73%) of survey responders have completed work under the Green Homes Grant. The remaining installers identify concerns with the operation of the scheme as their main reason for not participating

·        Of this group who are yet to be convinced to take part, the majority (72%) state that they are waiting to see if improvements can be made to the turnaround of payments, before they will reconsider their involvement

·        Of those installers already working under the scheme, over three quarters (76%) are ‘concerned about the time it takes to receive voucher payments’

·        Over a third (35%) of responders state that delays to scheme payments, is now threatening the viability of their businesses

·        Over half (51%) of installers state that they have hired new people, given an expectation that the scheme would generate a significant volume of new enquiries

·        Over a third (34%) said they were unlikely to retain these new staff, unless significant improvements are made to the operation of the scheme, including the flow of payments

·        A further fifth (17%) of installers state that they have already let their recent new hires go as a result of issues with working with the voucher scheme

Following the results of the survey, four industry bodies – the Microgeneration Certification Scheme (MCS), Solar Energy UK, Renewable Energy Assurance Ltd (REAL) and the Home Insulation and Energy Systems Quality Assured Contractors Scheme (HIES) – have joined together  to call on the Government to implement a four-point plan to address the issues in the scheme:

1.     Immediate acceleration of payments and processing of vouchers to address installers’ cashflow concerns and increase pace of installations for consumers

2.     A greater administrative role established for the MCS, which has the expertise and existing relationships with installers, auditors and established consumer bodies in the zero-carbon home retrofitting market

3.     Greater transparency of the auditing process – particularly the cost criteria of products and installation works should be made visible

4.     A commitment in the upcoming Budget to use all of the underspent 2020/21 budget in future years through a longer-term programme of zero-carbon retrofitting until the end of this parliament, applying lessons learned from the successful Local Authority Delivery scheme.

MCS chief executive Ian Rippin comments: “The Green Homes Grant has good intentions, but it has been over-engineered to the point where it is now significantly affecting how our installers operate. Delays to payments are especially damaging and we are calling for consumer incentives like this to be simplified to enable renewable energy businesses to do what they do best, without worrying about their financial health.”

Solar Energy UK chief executive Chris Hewett adds: “The government needs to work with industry to make the process simpler and clearer for installers and consumers alike. Payments for completed work must be made without further delay, and any unspent funds recommitted in following years. If this government is serious about driving a green economic recovery it has to put its money where its mouth is.”

The government has faced mounting pressure to address the administrative failings of the scheme in recent weeks from both industry and politicians, with the Environmental Audit Committee’s 3rd Parliamentary report calling for the scheme to “be urgently overhauled and extended to provide greater long-term stimulus to the domestic energy efficiency sector.

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