A failed attempt at a building energy retrofit program in the United Kingdom could offer lessons for governments in Canada and the United States as they prepare to launch their own plans.
The US$2-billion retrofit granting fund launched last fall in the UK went “very, very wrong,” reports Grist, thanks to a failure to consult with builders—who ended up being mobilized to do the work in an absurdly short time—and to the disastrously inefficient administration of the associated grant program.
Unveiled last summer, Prime Minister Boris Johnson’s “build back better” stimulus package relied on retrofits as its beating heart. The plan promised to create 100,000 jobs and upgrade 600,000 homes, all while getting the country closer to its net-zero promises.
The program was cancelled in late March “after a shambolic six-month run that may have killed more jobs than it spurred.”
Mapping the chaos, Grist writes that things began to go awry pretty much the moment the Green Homes Grants (GHG) initiative opened for business last September. Under the GHG program, “most UK homeowners and landlords could receive up to about $6,900 to help pay for insulation, electric heating systems, and various other energy-efficient fixes like new windows, doors, and heating controls.” Low-income homeowners could receive as much as $14,000.
Trouble was, in order to apply for a grant, the home or building owner had to submit a quote that had been calculated by an accredited installer. Few installers were accredited, and those who were not “were reluctant to go through the time-consuming and expensive process of getting accredited without a longer-term assurance that there would be work.”
They were right to be wary: homeowners lucky enough to actually hear back about their grant applications were frequently told their estimates were too high, and that a second opinion would be needed for approval.
Plus, builders “had been burned before,” writes Grist. A similar UK retrofit program was cancelled in 2015 after just two years, “resulting in a steep drop in demand for this kind of work.”
Builders (and homeowners) were also very poorly served by the bizarrely short timeline for the program, which was originally scheduled to end this March.
While Johnson agreed in November to extend the funding through 2022, builders and homeowners were unimpressed with the concession. Any money unspent from the original fund was not rolled over, and several builders testified to the Environmental Audit Committee of the British Parliament “that a much longer-term commitment was needed to provide the certainty that the industry, and particularly small installers, needed to make the investment in accreditation.”
Then there was the “chaotic” administration of the program. Grist writes of homeowners “waiting months to hear back about their application,” with no way to call or speak to any administrators directly.
Then, it got even worse.
“On December 24, the program sent notifications to thousands of applicants that said it was unable to verify their identity, and that their quotes were too high,” reports Grist. “Many homeowners dropped their retrofit plans altogether,” much to the dismay and anger of the installers who had been preparing for the work.
Those installers who did manage to proceed with projects and submit approved vouchers often found themselves waiting, with no sign of repayment. Grist cites a January report in The Guardian that spoke of installers being left “nearly $120,000 in the hole” and of being forced, in turn, to lay workers off.
According to one installer who testified before the Environmental Audit Committee, participating in the GHG program reduced his revenue “by at least 40%” while increasing costs by a whopping 300%.
Grist writes that the Environmental Audit Committee issued a “damning assessment” of the program in late March. The committee demanded that it be renovated, extended, and fully funded to provide “a genuine long-term stimulus to the domestic energy efficiency sector,” and warned that it “should not be scrapped or quietly wound down.” A few days later, the GHG program was indeed scrapped.
The final tally of a sorry tale? Fewer than one-sixth of the targeted 600,000 homeowners applied for GHG vouchers, and of those, less than half received them.