England’s much-hyped £2bn green homes grant is in chaos, renewable energy installers say, with some owed tens of thousands of pounds and struggling to stay in business.
Members of the public have been left waiting nearly four months, in some cases, to take advantage of the scheme to fit low carbon heating systems. Some installers say customers are pulling out after losing faith in the green grants.
Boris Johnson touted the grants as one of the key programmes in his ten 10-point plan for a green industrial revolution. It aims to help 600,000 households switch their energy to low carbon and help the UK meet its commitment to reach net zero carbon emissions by 2050.
Ministers awarded the contract to run the programme to ICF, a large American consulting corporation based in Virginia. Details of the value of the government contract have not yet been published.
But renewable energy businesses say the administration of the grants is chaotic, inefficient, confused and is creating long delays for the public and installers. Emails from the administrators are being sent during US office hours; in the evening and late at night, making communication impossible, businesses say.
Companies involved in installing heat pumps and solar thermal heating say they are laying off workers and struggling to stay afloat. Some are refusing to do more work until they are paid the tens of thousands of pounds owed for work dating back to last autumn.
“It is a desperate situation from everyone’s point of view, not just the installers,” said Bryan Glendinning, chief executive officer of Engenera, based in Newcastle. “This scheme was supposed to create jobs, but it is not doing that. We were ready to go last autumn, we had set up a call centre for 40 staff, I have now got two in there.”
Glendinning says he has 300 potential customers, some of whom have been waiting since September for vouchers from the scheme to get their renewable heating systems installed.
He told the Guardian that only 61 householders had been given the vouchers to go ahead. He has installed six systems but has not been paid for any by the government, and so far is out of pocket £250,000 from the scheme.
One installer, Eddie Gammage of EDG installations, said: “Chaos is an understatement for what is going on. We haven’t received any payments at all yet for seven jobs we have completed. I have had to lay people off.”
Bhumit Chandi, who runs Anglian Renewables in Uxbridge, said his company is owed £87,000 from work dating back to last November. “We had to register with this American company back in September. Everything is done remotely, we have 200 customers waiting for the scheme to issue vouchers and only 25 have been given approval. So since last September we have only done 16 jobs and haven’t been paid for any of them.
“This is the story across the board for installers. Some are down tens of thousands and some hundreds of thousands of pounds. We are all small companies and it is hard to sustain this. We cannot afford to do any more work.”
The scheme run by the Department for Business, Energy and Industrial Strategy, was launched last autumn, with the website up and running on 30 September.
Members of the public can claim vouchers of up to £5,000 to pay for two-thirds of the work to replace fossil fuel heat systems with renewable energy appliances such as solar thermals or heat pumps.
Homeowners who are on benefits can claim up to £10,000. Local authorities are also able to apply for work on their properties. Installers have to be registered with Trust Mark – which charges the installers £30 plus VAT to log each job.
The scheme was due to end in March this year, but the government announced its extension until March 2022 because of delays. But the evidence from renewable energy installers is that the situation has worsened.
Cutting carbon emissions from homes – which emit 20% of the UK’s CO2, is seen as crucial if the country is to reach net zero by 2050.
Giles Hanford, who runs the Small Solar Company in St Albans, told the Guardian that he is owed £20,000 for the four jobs he has carried out. He has 300 potential customers but only 10 have had their vouchers for the work issued by the administrators.
“We are very disappointed at the level of communication and at not being able to get answers. The administrators constantly refer us to the website, send more emails, and more emails. The vast majority of our customers have had queries about the work from the scheme, which we have responded to. We have broken down all the quotes for customers. But the lack of communication from the scheme means we still don’t know what they require.”
Charles Montlake, who runs Use the Sun in Basildon, said the green home grants scheme was destroying the market rather than boosting take up of renewable heating systems.
“The Green Homes Grant scheme is writing to our customers and telling them we are overpriced and they should get another quote. Destroying our reputation whilst refusing our sales is truly killing us and the market,” he said.
Jacqui Sloat, office manager for Solar Air UK based in Whitstable, said 50 out of a potential 500 customers had had vouchers issued, and two recently had those put on hold by the GHG administrators.
On Christmas Eve at 9.35pm an email was sent from the scheme to thousands of people applying for the grants, saying they were unable to verify their identity, and the quote for the work was too high, despite the installers the Guardian has spoken to providing estimates within the accepted range of the industry body the MCS.
“Because of all this we have had 100 people drop out, they got sick of the green homes scheme full stop. They don’t think it will ever happen,” Sloat said.
Sloat said the company was down about £170,000 for the equipment it bought ready to install. “We should be scaling up our work and taking people on, but we are laying people off. People are losing faith in the scheme.”
In Newcastle, Glendinning said he – like other installers – would not be doing any more work under the GHG because of the chaos.
“I am concerned I am not going to be paid,” he said. “No one seems to be taking responsibility and sorting this out, which is a shame. It is a really good principle, the scheme, but it is not being run properly.”
Shadow business secretary Ed Miliband said: “This scheme has descended into an absolute fiasco. The Government needs to urgently sort out this mess and crucially make sure small businesses are paid what they are owed.
“Far from creating green jobs, the Government’s approach means workers in the renewable energy industry are actually being let go – worsening the economic crisis.”
Miliband criticised the outsourcing of the scheme to a private company. “This is yet another example of ministers cutting corners and outsourcing to companies that just aren’t up to the task. They must come clean about the details of this contract so taxpayers know exactly what their money has been spent on.”
ICF, which has a London operation that is a wholly-owned subsidiary of the Virginia based company, said it had referred the Guardian’s questions to the Department for Business, Energy and Industrial Strategy.
A spokesperson for the department said approvals were running at over 25%. They said the contract to run the grants was put out to tender in August 2020, and details of ICF’s contract would be published in due course.
“We are working with consumers and installers to ensure they are clear on the information and checks required so that vouchers can be paid as quickly as possible.
“So far, 17,000 Green Homes Grant vouchers have already been issued, with more going out every day to improve the energy efficiency of homes and support jobs as we build back better from the pandemic.”