GRANTS AND FINANCIAL MATTERS: A mid-2023 UPDATE
The Government’s Autumn Statement 2022 earmarked funds for the energy retrofit sector. This is resulting in wider availability of grants for retrofit work but is mainly limited to those over 60 or on benefits, or in social housing.
If you fall into these categories, there are two ways you can receive support. By far the most generous of these is the Social Housing Decarbonization Funded work.
The Green Homes Grant and the Social Housing Decarbonization Fund (SHDF) is administered by local authorities and aims to improve some of their most critical housing stock. It supports full internal insulation upgrades, double-glazing, air source heat pumps (in theory) and solar panels. Councils will provide grants of up to £10,000 for households with income up to £30,000 per annum in a home with Energy Performace Certificate (EPC) of D or worse. The funding is also available for landlords who may apply to the scheme on behalf of tenants. Landlords can receive up to £5,000 to cover 2/3 of works (so total work is limited to £7,500).
For so-called “able-to-pay” clients, the grants outlook is currently very limited and depends on where you live.
Zero-rated VAT:
Until 31 March 2027, the zero rate applies to the installation of certain specified energy-saving materials in, or in the curtilage of, residential accommodation in Great Britain.
Two important points:
The materials that are zero-rated is a limited list. It includes draught-proofing, insulation, heating controls (TRVs, thermostats, water heating timers, heating timers), any kind of heat pumps, solar PV and solar thermal but not double-glazing or upgraded doors. It is not clear whether the zero VAT on heat pumps is cancelled out if you are applying for the BUS grant as well (see below)
“Ancillary work” is also zero rated, which means that if you must cut a new loft hatch to install insulation then this would also be zero rated, and if you need to upgrade radiators and pipework to install a heat-pump, this will be ancillary and thus zero rated, BUT if you install a whole new roof, the insulation to that roof is NOT zero-rated since the insulation is considered “ancillary” to the new roof. And in the same vein, if you completely change your central heating system to a new system, it’s not zero rated (except if its grant-funded work!). So this is at best a little confusing and it would be prudent to discuss this with your supplier prior to confirming the price of work.
Finally (why?) if you contract to build an extension and you also include some retrofit work –say some radiator valves and insulation—this will not be zero-rated! The two need to be seen as separate contracts, carried out at a separate time.
For easy reference, this is the link.
https://www.gov.uk/guidance/vat-on-energy-saving-materials-and-heating-equipment-notice-7086#installations-of-energy-saving-materials
Its quite a confusing document as you can see from the above main points so be prepared for a few “what???” moments
Great British Insulation Scheme (GBIS) (replacing the ECO+ Scheme):
This grant will be available through some of the larger energy providers and also through suppliers, and though it is meant to cover insulation generally, will probably support mainly loft and cavity wall insulation, which are cheaper and easier to install. Recipients will be means tested but will also include homes with an EPC of D or below, and within council tax bands A-D in England and A-E in Scotland and Wales, irrespective of income. It is possible that it will only be offered through the larger energy providers, and there may be restrictions if your home is solid-walled or otherwise difficult to insulate. Roll-out date is not yet confirmed.
CAMDEN leading the way
Camden has been administering its Household Energy Efficiency Grant for some time now. Please let us know if you’ve found anything similar operating in another borough, since we haven’t!
They will pay up to £5,000 for energy efficiency upgrades, which includes any kind of wall, under-floor or roof insulation, replacement of gas boilers with an air source heat pump, or solar thermal.
The applicant will be required to appoint a retrofit professional to procure a ‘Whole House Retrofit Plan’ (WHRP) or equivalent. The plan will identify the most effective and appropriate measures to improve the energy efficiency of the property.
One of the benefits of the Whole House Plan is that Camden will consider supporting other measures if they are identified in the Plan.
The Boiler Upgrade Scheme (BUS):
This existing grant provides around 90,000 homes across Britain with £5,000 towards purchase of a heat pump. The grant is available through suppliers, who will submit the grant application on your behalf. The supplier must survey the home or otherwise prove that the home can support a heat pump. Uninsulated homes are not eligible but you could be eligible if your home has an insulated extension and insulated loft or loft extension.
Financial assistance other than direct grants:
Financing—essentially, loans for retrofit upgrades—has been anticipated for a number of years but movement has been slow. Some banks are rolling out pilot schemes whereby owners can receive funded advice (like a streamlined Whole House Plan) and apply for loans for the recommended improvements. This ensures that the money is being spent wisely; all advisors must be Trust-Mark registered and trained as Retrofit Assessors or Coordinators. The landscape is changing quickly and it is worth researching if this could be a solution for you.
Halifax is partnering with Effective Home (an installation company) to help with uptake by providing virtual consultations leading to a “solar plan” and £500 towards installation costs.
Further information may be found from the Energy Saving Trust at:
https://energysavingtrust.org.uk/energy-at-home/financial-support/financial-support-for-home-energy/
or check with your local council.
