BY KATIE - MYGREENPOD, 27th July '14

GOVERNMENT CLOSES SCHEME TO MAKE HOMES MORE ENERGY EFFICIENT

DECC halted applications for the Green Deal Home Improvement Fund (GDHIF) on Thursday night, due to ‘overwhelming popular demand’ that the government says took £70m of the scheme’s £120m budget in just three days.

DECC claimed a ‘surge in applications over the last two days means the allocated budget has now been reached’, and that it will consider whether to launch a further offer if ‘funds become available’.

Victim of its own success?

The loan scheme provided takers with up to £7,600 of upfront cash to invest in energy-efficient home improvements, with the cash recouped through subsequent savings on domestic power bills. It was launched in June as a simpler version of the government’s energy efficiency programme, which didn’t see much uptake.

In contrast, the streamlined – and more generous – GDHIF proved so popular that DECC announced on Tuesday that it would be cutting the maximum payout from today, as almost half (£50m) of the budget had already been dished out.

The remaining £70m was reportedly grabbed by 9,500 applicants all looking to cash in before time (and money) ran out. The figure suggests that all applicants must have applied for a figure close to the maximum payout – which is awarded for those seeking to insulate solid walls.

Reactions to the news

Jonathan Reynolds, shadow energy minister said, ‘This is a shocking act of incompetence. It will leave many customers who have paid £100 for a green deal assessment out of pocket, with little prospect of them having the work they were promised done, and an insulation industry in despair at the stop-start nature of this government’s policy.’

The sector reacted furiously, with some questioning the legality of the move. Richard Twinn, policy and public affairs officer at the UK Green Building Council, said, ‘The sudden and immediate closure of this fund is another setback for the energy efficiency industry because companies have specifically geared up to market and deliver through this scheme.

‘These constant changes are not helpful to industry. We now need urgent clarity as to whether government will bring forward any more money to ensure continuity of Green Deal work.

‘This does demonstrate that we need long-term drivers, not short-term pots of cash to avoid this continual cycle of boom and bust.’