Kwasi Kwarteng, business and energy secretary, announced the termination of the Green Homes Grant after just six months in a statement on Saturday.
Launched last September, the scheme aimed to help insulate the 19 million homes that need to be made more energy efficient to tackle emissions from Britain’s leaky, inefficient housing stock. Households could apply for grants of up to £10,000 to upgrade their heating systems.
But the scheme has struggled and after a government review, will be scrapped after Wednesday 31 March.
Nick Molho, executive director of the Aldersgate Group, said in a statement that it was a “premature end” and a “significant disappointment”.
He added: “Improving energy efficiency and slashing heating emissions from the UK’s homes is a vital, foundational step on the journey to achieve net zero emissions. It is also one of the most promising avenues to create jobs in the near-term as the UK economy recovers from the impact of the pandemic.”
Molho believes there are a variety of reasons for its failure. He said: “There are many reasons for the difficulties encountered by the grant, a key one being the lack of an adequately skilled supply chain, itself caused by the absence of a long-term policy on energy efficiency and low carbon heat for many years now."
According to the BBC, other issues included reluctancy from households because they feared catching Covid from contractors coming into their homes, installers overwhelmed by demand in some areas, payment delays and overcharging for work.
As a form of replacement, the government announced that it will transfer the fund to local authorities through the Green Homes Grant Local Authority Delivery Scheme and Social Housing Decarbonisation Fund Demonstrator, which will include green home improvements such as deep insulation, heat pumps and solar panels.
Kwarteng said: “Upgrading the country’s homes with energy efficiency measures means we can cut emissions and save people money on their energy bills.
“Today’s funding boost will mean even more households across England are able to access these vital grants through their local authority.
“This latest announcement takes our total energy efficiency spending to over £1.3 billion in the next financial year, giving installers the certainty they need to plan ahead, create new jobs and train the next generation of builders, plumbers and tradespeople.”
But Matthew Pennycook, the shadow minister for climate change, said: “The funding announced today doesn’t even come close to plugging the investment gap created by the government's decision to slash more than £1bn from its Green Homes Grant scheme and then scrap it altogether.
“Ministers might talk a good game on energy efficiency but their staggering ineptitude when it comes to decarbonising the country's housing stock speaks for itself.”
Solar Energy UK chief executive Chris Hewett said: “The decision to scrap the Green Homes Grants Voucher scheme is disappointing and a setback for getting homes net zero ready. We urge the government to swiftly plug the gap left as a result of closing the scheme early in its forthcoming Heat and Buildings Strategy.
“Closing the scheme early will hurt installation companies that have invested in staff in good faith to meet the strong demand for solar thermal technology and will inevitably lead to job losses.”