Green Homes Grant: Fact, Fiction and How to Manage Consumer Expectation
The Government’s communication on its plans for the Green Homes Grant have been, well, about as clear as its communications on face masks. And if you’re scratching your head you’re not alone.
CERTASS, the GGF – no one seems to be clear on how the scheme will move forward with the Department for Business, Energy and Industrial Strategy (BEIS), suggesting that it may be some time before we have the answer.
That leaves installers, who were enjoying a micro boom in demand, having to explain away a scheme which in theory promised so much (and may still deliver it!) but which has through the law of unintended consequences, led many homeowners to pause their purchases.
This document is designed to help you decipher fact from fiction while it also highlights a couple of strategies for managing homeowner expectation and keeping orders moving.
What is the Green Homes Grant?
The Green Homes Grant was announced by chancellor Rishi Sunak in the Summer Statement on 8/7/20 in a bid to create green jobs in the building and construction sector.
Homeowners and landlords will be able to apply for vouchers from September that will cover at least two-thirds of the cost of updating their property, up to £5,000 per household.
For low income households, Mr Sunak said the government will “go even further” with vouchers covering the full cost, up to £10,000.
How will it work?
Green Homes Grant will be provided in the form of vouchers which can be used towards making energy-efficient improvements to homes.
In order to obtain a voucher, homeowners will have to make an online application for recommended energy efficiency measures, with details forwarded to accredited local suppliers.
Homeowners and landlords will be eligible, and the chancellor confirmed that up to 650,000 homes will be covered by the grant.
This will be administered through https://www.simpleenergyadvice.org.uk
REALITY CHECK #1
It has been widely reported in the consumer media that homeowners will be able to spend vouchers on a myriad of improvements, including:
- Loft and floor insulation
- New, more efficient boilers
- Heat pumps
- Energy-efficient lighting
- And energy efficient windows and doors
This is what has prompted some owners to delay home improvements. There was, however, no specific reference to energy efficient windows and doors in Rishi Sunak’s speech on 8/7/20 [confirmed via Hansard, the parliamentary record for 8/7/20] or any detail on how the scheme will work.
Answers given to the GGF by the Department for Business, Energy and Industrial Strategy (BEIS) as published 14/7/20 imply that the scheme will ‘tier’ energy efficient improvements, prioritising those that deliver the ‘biggest bang for their buck’, for example loft insulation first.
The response from BEIS to the GGF’s question on the inclusion of windows and doors is below:
‘Yes, but as part of a wider refurbishment of homes aimed at achieving EPC Level C. The aim of the scheme is to significantly improve energy and heat efficiency, which can only be achieved by a number of measures.’
Given this we can draw out the following conclusions:
- If a property has an EPC [Energy Performance Certificate] of Level C or above, it is unlikely to qualify for the Green Homes Grant. This represents approximately 40% of UK housing stock.
- Where a property qualifies, windows and doors will only be included as part of a package of measures – not in isolation. This means that grants of up to £5,000 exclusively for the new windows and doors WILL NOT be available, only as part of a package
- This infers that windows and doors will have secondary – not primary status within the scheme
In short, if you are a homeowner who wants to buy a new set of bi-folding doors because you want to replace your 10-year-old PVC-U patio, think again. That’s not what the scheme is there for. It’s about boosting energy efficiency, particularly for low income households.
How do I become an ‘accredited local supplier’?
We’re going to refer to our friends at the GGF again as a starting point for this one. When asked by the GGF as to how to qualify as an accredited local supplier, BEIS replied, slightly unhelpfully that:
‘We do not have further details of the criteria at this stage. However, it’s fair to assume installers would need to be qualified and registered with a relevant body or scheme to demonstrate they are competent to perform the work and ensure appropriate consumer protection.‘
Corgi Fenestration, CERTASS, FENSA are competent person schemes and as such, it is inferred that membership would imply qualification – we are, however, adding ‘two and two’ together here, and this is not confirmed.
There is an argument to suggest that the scheme may be operated through TrustMark. Operated under license from BEIS it provides a guarantee of competency across multiple trades operating in the home improvement sector.
Pre-existing associations would Corgi Fenestration, CERTASS or FENSA as competent person schemes would extend qualification automatically to members.
Does the Green Homes Grant mean that homeowners should delay buying new windows and doors?
So, this is the million-dollar question. What advice should you – can you give – to homeowners when the Green Homes Grant is so sketchy?
Well let’s turn to consumer champion Martin Lewis. He warns that homeowners may need an assessment to get the vouchers – and makes the point that ‘not everyone may be able to get what they want’ but he does say it may be sensible to hold-off until the Government has put more meat on the bones of its plan.
He also acknowledges that ‘this is likely to be a nightmare for the installers and sellers of these products. We’ve just come out of lockdown, they’re trying to kick-start their businesses, and the Chancellor has pre-announced an uncertain scheme that will likely stall people ordering’ [thanks Martin – you’re certainly right about that!] and that ‘consumers should behave ethically’.
REALITY CHECK #2
We aren’t convinced that delaying purchases makes sense. Especially where those decisions are being driven by aesthetics, not energy efficiency.
New windows and doors can deliver significant advantages over single glazing and very early double-glazing – you know, the aluminium type which spends most of its time drenched in condensation and mildew.
These old windows can account for around 20% of the heat lost from a home – critically this is after energy leaking roof space and walls.
The exact savings will be dependent each individual property and the windows previously installed but the Energy Saving Trust suggests that this can be as much as 75 per cent.
These are the properties, often rentals, which the Government is trying to target. Properties which wouldn’t be upgraded otherwise, which is why it is worth remembering that the Green Home Grant, should in the medium term deliver opportunity.
The problem for most homeowners and by default retailers here and now, is that in the majority of properties these windows have already been replaced once.
The latest figures published in the English House Condition Survey, show that of 23.2 million properties studied, it recorded that 85% of homes in England had full double glazing, up from 71% of homes in 2008.
Industry analysts go further, in fact, Palmer suggests that by the end of this year the figure will be nearly 95%.
The energy efficiency gains on installing new double-glazed or triple-glazed windows and doors over older double-glazed units shouldn’t be dismissed but they are unlikely to be enough to qualify in isolation for the Green Homes Grant.
On the same premise neither is the preference of the homeowner for pebble or agate grey windows over Rosewood; or a aluminium bi-fold over a PVC-U patio door.
If homeowners are buying doors because they want to enhance the aesthetic of their home or connect it to the space outside or improve the security of their property, everything we read suggests that in most circumstances their projects WILL NOT qualify.
This doesn’t negate the value of the Green Homes Grant to our own industry but we – and homeowners need – to be realistic in understanding that it will apply in very specific circumstances only.
How should installers manage homeowner expectation?
This is the other million-dollar question! The difficulty we all face is that while we can draw assumptions from what the Government is saying and read between the lines, we can’t be explicit.
And similarly, how do we turn something which appears to be a negative into a positive?
- Use the Green Homes Grant to tap into latent demand. Consumers have a heightened awareness right now of home improvements, not just because of the Green Homes Grant, but because of the time that they have spent in their properties during lockdown – it’s what’s driving much of the demand we’re seeing as an industry. Reach out and communicate with new prospects referencing the scheme but consider linking it back to your own promotions and offers. These can be linked to ‘Green discounts’, ‘window scrappage schemes’ – it’s perfectly valid to tap into popular sentiment and increased consumer awareness to support your own promotions. Ensure that you are transparent and don’t imply that they’re part of the Government scheme.
- ‘Order now – buy later’. The industry is working to order books six to as much as 12 weeks in advance. If you’re a member of a competent persons’ scheme, and on the assumption that you qualify as an accredited supplier, consider running promotions which encourage homeowners to ‘beat the rush’ and order now, with a view to delivery from September. You can say that you will accept vouchers as ‘contributory payment on qualifying orders’. This means reviewing your terms and conditions and by definition not all jobs will qualify. However, it delivers a direct benefit to the customer, putting them ‘ahead of the rush’ should they qualify. If they don’t, the impact is softened because they haven’t wasted time going through an unsuccessful application and delayed their purchase/installation.
- Put in plans for regular communication with those customers who ‘pause’ jobs to see if the scheme applies to them. Use the material in this document as a starting point: ‘How does the Green Homes Grant Work’, ‘Will energy efficient windows and doors qualify?’. If someone has put things on hold, keep the lead warm and explain the lie of the landscape. Right now, it looks unlikely that the majority of homeowners and certainly those with EPCs of C or higher will qualify. Explain that and incentivise them to make purchases now.
- Reach out to those homeowners and landlords that are likely to comply. Letting agencies may be prepared to forward tie-in promotions to their clients.
- Promote the Green Homes Grant through your blog and website, provide open and honest advice to homeowners on the scheme, how it’s going to work (we don’t have all the answers but we certainly have some) and make sure that when people are searching online for the Green Homes Grant + ‘Your area’, your business has a profile online. You can update it regularly with new comment and detail as the scheme develops.
Insulating the UK’ least energy efficient homes is a good thing. It helps people out of fuel-poverty and it helps us reduce our impact on the environment. In the medium term the Green Homes Grant will generate opportunities for window and door companies, also supporting jobs, while helping many of the least well off in our society.
It has, however, muddied the waters and taken some of the shine off a boom in retail. Clarity from Government and industry bodies is key.
As is perspective. We remain in post-lockdown boom. Lead times were already long and the market could afford to lose a little heat in the short-term. Pushing work on a few weeks may not necessarily be a bad thing.