Energy efficiency still suffering from “stop-start” funding

The Green Deal Home Improvement Fund (GDHIF)’s £30 million re-launch last month was mostly allocated within 24 hours, fuelling concerns about ongoing uncertainty for the energy efficiency industry.

The fund, which incentivises households to install energy efficiency measures, was revived in December after overwhelming demand forced a sudden closure earlier in July 2014. 

To avoid a similar ‘boom and bust’ cycle this time around, the fund’s new budget of £100 million will be gradually released on a quarterly basis to spread the flow of applications. 

In addition, the application process has been made more complex and funding is being separated into ring-fenced pots to ensure that cash is better distributed between expensive solid wall insulation and other energy efficiency improvements.

Solid wall insulation

However, these changes have failed to temper the stop-start nature of the scheme, with the £24 million set aside for solid wall insulation in December’s £30 million budget completely allocated just one day after its launch

According to the most recent data available from the Department of Energy and Climate Change (DECC), solid wall insulation makes up over 60 per cent of measures funded through the GDHIF. 

‘Gold rush’

The remaining £6 million remains open for applications for other energy saving measures, but Richard Twinn, policy and public affairs officer at the UK Green Building Council, criticised the Government for failing to learn from past experiences.

“This is a clear illustration of the stop-start policy regime around energy efficiency,” he said.

“This latest gold rush will have been exacerbated by the high profile around the sudden closure of the previous funding over the summer. 

“Government need to learn from this ongoing debacle that we need long-term drivers for energy efficiency.”

Election uncertainty

Debate over long-term confidence for the industry is likely to hinge on the 2015 General Election, with concerns also being voiced about the future of the Energy Company Obligation (ECO) scheme, which has delivered 97 per cent of the efficiency measures installed through the Government’s domestic energy efficiency programme over the last two years.

Speaking to BusinessGreen, shadow energy and climate change minister, Jonathan Reynolds, said: “Everyone seems to agree the ECO will be completed well before [its target in] 2017, so there’s a real risk of hiatus for the industry.

“There seems to be no thinking about what will replace ECO, nothing about how to extend the Renewable Heat Incentive (RHI), little on the smart meter roll out. These are all big jobs, but I don’t think they are thinking much about it.”

Posted under Climate Change and What it Means to You, Environmental Regulations and Legislation, Construction, Energy and Renewables and Environmental Technologies on 5 January 2015