It’s only taxpayers’ money, so it doesn’t matter.

18th Oct 2021

 

This week we will have confirmation of the level of the Clean Homes Grant, designed to subsidise the installation of low carbon heating appliances in the home. Originally suggested at £4000 a time, speculation is that the figure could increase to £5000. If the total spending pot is worth £100 million, we’re talking about 20-25,000 units installed.

Image credit: Getty

Examining the proposal, it is difficult to conclude anything other than the money could be better spent.

Will the £5000 bring additional sales of heat pumps, ones that were not going to be made anyway? Some yes, but not all. With a subsidy available, any decent salesperson will just use it to sweeten the deal they were going to make anyway.

Will it bring down costs for the industry as a whole? Unlikely. If we accept that sales volumes won’t increase massively as a result of the subsidy, it won’t be bearing down on industry costs. And if something is going to cost you £5000 less than you thought, it’s possible that “inflation” may mean other material costs may just creep up a few hundred quid.

And who will get the subsidy? Well if our PM is right and they cost £10,000 to install, even with a £5000 subsidy, that still leaves half to pay. Who can afford to pay that extra £5 grand, well it isn’t going to be the fuel poor is it? So, the money is coming from all those who pay tax, to the relatively well-off who can afford to shell out £5000 for a new heating system.

It’s only taxpayers’ money so why worry?

In other news, last week the Committee on Fuel Poverty concluded that the Government, which missed its 2020 target on fuel poverty, was unlikely to reach their 2025 target too. The two stories are related, a futile waste of taxpayers’ money, wrongly targeted with few tangible benefits.

In further news, the Energy Savings Trust calculator suggests that the £100 million could fund 333,333 loft insulation measures fitted to average semi-detached homes, saving £135 per year and reducing carbon by 580kgs annually. Total carbon saving, additional, 193,333 tonnes and bill savings of £45 million a year.

But it’s taxpayers’ money, so doesn’t count.

 Best wishes

Mike Foster, CEO

Mike Foster

EUA's Chief Executive

 

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