Notice

Green Home Finance Accelerator Discovery Phase: Clarification questions (updated 13 December 2022)

Updated 19 May 2023

We have published responses to stakeholder questions which in our judgement were of material significance to the Green Home Finance Accelerator competition. All questions were submitted to uk_ghfa@pwc.com after publication of the Competition Guidance Notes, or raised during the Information Event held on 2 November 2022.

The Green Home Finance Accelerator GOV.UK page provides further programme details.

Section 1: Context

1. Where did the £1 billion funds that are being used to support the BEIS Net Zero Innovation Portfolio (NZIP) come from?

The £1 billion Net Zero Innovation Portfolio (NZIP) was announced in November 2020 as part of The Ten Point Plan for a Green Industrial Revolution

The £20m Green Home Finance Accelerator is part of our Net Zero Innovation Portfolio activities to support decarbonising our homes and buildings.

2. Why should we be thinking about green home finance beyond mortgages?

Of the UK’s 24.7m dwellings, 8.8m (36%) are owned outright without a mortgage, a further 4.8m (19%) are privately rented.

The issue of green homes is not just a question of buying a home to live in using a mortgage, but also ownership, including outright ownership (whether as an owner-occupier or a landlord). The Green Home Finance Accelerator aims to support development of a diverse green finance market which meets the needs of all homeowners and all circumstances.

3. Is there a customer segment that is particularly relevant for the GHFA?

To achieve a genuinely green home finance market in the UK, the market will ultimately need to progress towards developing products and services which cover the full range of customer segments – whether first-time buyers with a mortgage, private landlords looking to align with emerging regulations, or even outright owner-occupiers looking to release equity.

4. Finance products embedded within ‘one stop shop’ services which offer an end-to-end service for homeowners have been mentioned as an example of potential product proposals of relevance to this programme - do you consider these ‘one stop shops’ as being a national government led initiative or better sat with local or combined authorities?

Both public and private sector organisations are eligible to apply for GHFA funding. We expect applicants themselves, whether single organisations or consortia, to identify and demonstrate what organisation types are best placed to deliver their proposed product or service.

Any applicants looking to collaborate with other organisations who potentially can offer different types of expertise are welcome to register on the GHFA matchmaking platform

5. Can you please provide details of the recently launched government consumer advice services?

The Find ways to save energy in your home advice service provides recommendations for home improvements that could help make properties cheaper to heat.

The Check if a heat pump could be suitable for your home service helps inform consumers if a heat pump could be a suitable choice of heating system for their home.

6. Where can applicants find further details on the government telephone support service for consumers?

The Energy Security Strategy provides further details of a three-part energy advice provision.

It is anticipated further information on the telephone support service will be made available from late 2022 onwards.

Section 2: Competition Scope and Eligibility

7. Are research organisations eligible to apply for funding? If so, what are the match funding requirements of research organisations?

Yes – research organisations are eligible to apply for funding. Please see section 8.3 of the Competition Guidance Notes for details of how a research organisation is defined within the context of this programme.

Research organisations undertaking non-economic activity can be funded as follows:

• up to 80% of full economic costs (using the Full Economic Cost approach) if you are a higher education institution such as a university
• up to 100% of eligible costs for all other research organisations

Research organisations which are engaged in economic activity as part of their project will be treated as business enterprises for the purposes of funding - and the funding levels set out in Table 3 of the Competition Guidance Notes will apply.

When referring to economic and non-economic activity, BEIS uses the definition from the Framework for State aid for research and development and innovation

Please note that any applications that do not include a finance provider will be expected to set out how they intend to recruit a suitable finance partner or partners during the Discovery Phase to enable a green finance product to be successfully piloted during the Pilot Phase.

8. Are public sector organisations such as local authorities eligible to apply for funding?

Yes – public sector organisations are eligible to apply for funding.

Public sector organisations undertaking economic activity will be treated as business enterprises for the purposes of funding. In this situation, please note that the required match funding must not include funding attributable to any public authority (in the UK or elsewhere).

Public sector organisations may also be required to provide evidence to demonstrate that they are not receiving other public funding for activities for which grant funding is claimed through the GHFA Competition.

9. We are funded by a public sector organisation and cannot participate as a project consortium member as the required match funding must not include funding attributable to any public authority (in the UK or elsewhere). Is our organisation eligible to a participate as a sub-contractor?

In line with subsidy control principles, only a portion of the total eligible project costs can be funded by BEIS grant funding and applicants will need to have private funding in place to cover the balance of the eligible costs. Such funding may come from an organisation’s own resources or external investors, but it may not include funding attributable to any public authority (in the UK or elsewhere).

There are no restrictions on organisations taking part as sub-contractors, so long as lead organisations and consortium members meet the subsidy and match funding requirements.

However, under these specific circumstances, where a sub-contractor is funded by a public sector organisation, the applicant organisation and relevant sub-contractor may also be required to provide evidence to demonstrate that the sub-contractor is not receiving other public funding for activities for which they are also receiving payment funded through the GHFA Competition.

10. By when must applicant organisations have an establishment or subsidiary registered in the UK to meet competition eligibility criteria? At the time of application? Or when grant funding is disbursed?

To be eligible to apply for GHFA funding, applicants must be UK-based (i.e. have an establishment or subsidiary registered in the UK) by the application submission deadline at 12:00pm (noon) on 14 December 2022.

11. Can one organisation submit multiple funding applications? If so, how will applicants submitting multiple applications be assessed in terms of eligibility?

Yes – organisations are eligible to participate (as either a project lead and/or consortium member) in a maximum of up to three funding applications. However, organisations must not apply for funding for the same piece of work more than once.

Any applicants submitting multiple funding applications must clearly demonstrate that they have sufficient resources and capabilities available to successfully deliver multiple projects in response to assessment “Criterion 2 – Deliverability” and “Criterion 3 – Skills and Expertise”.

If an organisation is participating in multiple applications, each project should be independent of each other i.e. the feasibility of delivering any projects should not be dependent upon successfully securing funding for one or more further GHFA funding applications.

12. Are sole traders or newly created legal structures (e.g. start-ups) eligible to apply?

Sole traders are not eligible to apply for funding.

Start-ups are eligible to apply, however, they must satisfy the due diligence, financial and organisational checks required prior to receiving public funds. These will include looking at the latest independently audited accounts filed on the Companies House database.

Where a start-up does not have any financial history, other financial information shall be requested to enable an appropriate financial viability review to be undertaken.

13. As a start-up do we need to have incorporated as a company prior to making the application?

To be eligible to apply for GHFA funding, applicants must be UK-based (i.e., have an establishment or subsidiary registered in the UK) by the application submission deadline at 12:00pm (noon) on 14 December 2022. All organisations will be checked prior to receiving public funds, which will include looking at the organisation’s status on the Companies House database.

14. As a start-up company we would not initially be VAT registered. Can a project be run through a VAT registered company, even if that company has no relation to the project?

A company does not have to be VAT registered to apply. Please note that the grant will count against income for the business, and this might mean that you pass the threshold and need to get registered if you are successful in winning a grant. Grant recipients cannot charge recoverable VAT on invoices submitted for payment to BEIS.

The lead organisation must have a direct relationship with the project. Grant Offer Letters for successful applicants will be made out to the delegated lead organisation and as such BEIS is only responsible for making claim payments to the delegated project lead. Payments to collaboration partners or sub-contracts are the responsibility of the lead company.

15. The Application Form includes lead organisation maturity options from pre-startup and above. Does this mean that a non-incorporated entity is eligible to apply?

No, competition eligibility criteria require applicants to be registered in the UK by the application submission deadline at 12:00pm (noon) on 14 December 2022.

16. What constitutes a conflict of interest within the context of this competition? For example, does shareholding or employment constitute that? Are there any issues with shareholding/employment as a declared conflict of interest?

Conflicts of interest cannot be evaluated until they have been formally declared with details of how they have been or will be mitigated.

A declaration of interest will not necessarily mean that an individual or organisation cannot work on a project, however, it is essential that any interest or conflict is declared so they can be considered openly.

17. Can you provide advice to individual applicants on determining the correct category for the research and development costs?

We cannot provide advice to individual applicants on categorising their research and development costs.

Please refer to section 5.4 of the Competition Guidance Notes for the applicable definitions to inform categorisation of innovation activities. To be eligible for a ‘Subsidy for Research and Development Projects’, you will be required to demonstrate that your project activities meet the definition of industrial research or experimental development as defined within the Competition Guidance Notes.

Whilst BEIS will check the information provided to try and ensure that applicants meet the requirements of the subsidy categories, it is the responsibility of applicants to establish that they fall within the competition rules before submitting applications.

18. What support is available for new self-build initiatives?

Self-build and new build related projects are out of scope for this competition.

Find more information on existing self-build support

19. What stage of product concept development or commercial readiness does an applicant have to demonstrate to meet eligibility criteria? How is commercial design stage defined?

There is no minimum commercial readiness level that applicants must demonstrate to meet competition eligibility criteria.

It is anticipated that potential applicants could be at varying stages of commercial readiness when initially applying for funding. The programme is therefore structured in two phases to allow all funded projects to undertake a Discovery Phase period of product research and development prior to applying for Pilot Phase funding.

Rather than evaluating minimum commercial readiness, all eligible applications will be assessed against the assessment criteria set out in the Competition Guidance Notes.

However, please note that BEIS cannot fund the development of processes, technology or products which are already at commercial design stage at the start of the Discovery Phase, or which are already commercially or widely deployed in the UK or internationally.

Commercial design stage in the context of this programme applies to any products that have already progressed to commercial readiness level 3b and above.

Please see Annex 2 of the Competition Guidance Notes which defines Commercial Readiness Levels.

20. The assessment criteria (Criterion 1 - Addressing the competition objectives) requires applicants to “set out your proposed approach for developing suitable expertise in energy efficiency and/or low carbon heating, installation verification, customer advice services, and the necessary IT infrastructure to incorporate energy efficiency and/or low carbon heating into investment decisions.” Can we gain this expertise by hiring external consultants or employees with the required skills, would you consider this a part of the development project?

We cannot advise on the most appropriate approach for meeting assessment criteria expertise requirements as this may vary considerably across applicant organisations and individual projects.

Applicants should clearly identify what expertise is required to deliver their project (which could include technical expertise and financial expertise), outline how this expertise will be secured, and provide justification to support this approach.

21. The competition Additionality eligibility criteria and Criterion 4b – Costs assessment criteria ask questions relating to why the project would not be taken forward without public funding, can you please explain this requirement in further detail and clarify with an example the kind of evidence you would require?

The competition additionality eligibility criteria states that projects can only be funded where justification can be provided that the innovation would not be taken forwards (or would be taken forwards at a much slower rate) without public sector funding.

This could include, but should not necessarily be limited to, explaining why your project would not be able to go ahead without public funding, outlining what other sources of project funding have been considered, detailing what would happen with the project if it does not secure public funding, outlining the barriers currently preventing the project from proceeding, and explaining how GHFA funding can overcome these.

22. The assessment criteria (Criterion 1 - Addressing the competition objectives) requires applicants to “describe how the project will widen the evidence base for consumer demand for green home finance products.” Can you please provide detail on how projects can fulfil this requirement? For example, should it include market research and feedback, customer interviews, actual homeowner transactions, etc?

We have not set specific evidence requirements in this instance as our preference is to see a wide range of materials emerging across the Discovery and Pilot Phases. We expect applicants to propose the most appropriate approach to gathering and delivering meaningful evidence based on the specifics of their green finance product and/or service.

Examples of potential evidence could range from (but would not be limited to) the results of behavioural insights, consumer segmentation and focus group work conducted during the Discovery Phase (identifying broad consumer preferences and trends), through to evaluations of specific marketing collateral which has successfully attracted real households to the product/service during the Pilot Phase.

23. The assessment criteria (Criterion 2c – Deliverability) requests details of project success factors, risks and management measures – does this refer to the Discovery Phase, or both the Discovery and Pilot Phases?

The Application Form assessment criteria and questions relate to Discovery Phase projects only.

All Discovery Phase projects will be issued a separate Application Form to apply for Pilot Phase funding.

24. Should sample homeowner finance transactions have taken place by the end of Discovery Phase or can market validation be supported by research and other methods alone? At what stage, if at all, are applicants expected to progress on securing a pipeline of customers ahead of the Pilot Phase start?

We have not set specific requirements concerning various product development activities that must be achieved by the end of the Discovery Phase. Sample homeowner finance transactions are therefore not a specific requirement for the end of the Discovery Phase. The outputs of approaches such as high-quality focus group work, behavioural insights and other customer data driven modelling are indicative examples of demonstrating potential product market and consumer appeal.

Details of the assessment criteria for the Pilot Phase are outlined within section 17.2 of the Competition Guidance Notes. It is recommended applicants review these in detail when considering what product development and evidence gathering activities to undertake during the Discovery Phase.

25. The Competition Guidance Notes refer to lending products in more detail than green finance services for homeowners. Can you please confirm whether a green finance service-based solution for homeowners is within scope?

Both green finance lending products and services for homeowners are within competition scope, although all proposals should include green finance elements as a minimum.

Please do however note that should the proposal not include a finance provider at the initial Discovery Phase, we expect applicants to set out how they intend to recruit a suitable finance partner or partners during the Discovery Phase to enable a green finance product or service to be successfully piloted during the Pilot Phase.

26. If the green finance only covers “net zero solutions”, does that eliminate those that may not initially seek green improvements, but could be persuaded to look at those if the finance was there to incentivise any retrofit?

The competition is designed to support the development of green finance products that enable homeowners to meet some, or all, of the costs of home energy efficiency, low carbon heating and/ or micro-generation improvements.

This could include finance products which enable homeowners to fund a blend of green and non-green improvements. We would not however consider proposals which sought to provide funding primarily for non-green measures (with green retrofit only featuring as a possible/non-guaranteed add-on) to meet eligibility criteria.

27. Are hydrogen projects within competition scope? For example, would you consider funding projects involving hydrogen for otherwise hard to decarbonise buildings?

Hydrogen related projects are out of scope for this competition.

See details of BEIS Net Zero Innovation Portfolio activities to catalyse innovation and address blockers to the uptake of hydrogen technologies across the whole hydrogen value and supply chain, from production, supply, storage to end use.

28. Are domestic EV chargers considered within competition scope, either standalone and/or in conjunction with other home energy efficiency, low carbon heating, and/or micro-generation improvements?

The GHFA competition is designed to support the development of green finance products that enable homeowners to meet some, or all, of the costs of home energy efficiency, low carbon heating and/or micro-generation improvements.

Proposals for products which provide funding for EV chargers as part of a package of energy efficiency, low carbon heating and/or micro-generation measures would be considered eligible. However, proposals for products which fund EV chargers only would not be considered within scope.

29. We are developing a Virtual Power Plant based solution that does not require a finance product. Is our solution eligible to apply for funding?

The competition is designed to support the development of novel green finance products and services that enable homeowners to meet some, or all, of the costs of home energy efficiency, low carbon heating and/or micro-generation improvements.

Any application which did not feature green finance for retrofit as a key component would not be considered eligible.

See details of BEIS Net Zero Innovation Portfolio activities to support flexibility services and technologies, as well as non-conventional storage at varying technology readiness levels.

Section 3: Commercial

30. Does match funding mean I need to provide private funding that matches the level of grant funding provided by BEIS? When do I need to provide evidence of this?

No, the level of public funding that can be provided for a GHFA project will vary depending on the type of innovation activity and size of organisation.

Please refer to section 8.3 of the Competition Guidance Notes where Table 3 sets out the maximum level of public funding that can be provided as a percentage of the project’s total eligible project costs. The balance of eligible costs (or match funding) will need to be covered by private funding – but this will not necessarily equate to the same level of grant funding provided.

All grant recipients must provide evidence that their required match funding has been secured within 3 months of the commencement date of their grant funded activities.

31. How should a micro-business that is part of a larger organisational group calculate their match funding requirements?

Under such circumstances it will be necessary to establish which data needs to be considered and assessed against the business definitions set out in section 8.2 of the Competition Guidance Notes.

See Annex 1: Business Definitions: Further Information for further details.

32. Can you please confirm what proportion of eligible project costs can be incurred by a subcontractor and what percentage of eligible project costs constitutes a consortium partner?

There are no formal limits on the eligible project costs attributed to being a consortium partner or subcontractor. However, please note that applicants are required to provide detailed justification for the use of subcontractors, particularly where these are incurring a substantive proportion of eligible project costs.

33. We will need to engage specialist sub-contractors during the Discovery Phase to develop our product, what market price point should we budget for?

It is the responsibility of applicants to outline where the use of sub-contractors is required and to identify which specific sub-contractor organisations are best placed to meet these requirements.

Applicants are required to clearly state and justify the amount of sub-contract spend (if any) within project costs. We would also expect applications to ensure sub-contractors deliver fair market value and to include confirmation that suitable arrangements are in place for managing any sub-contractors.

34. What personnel costs can we allocate to our start-up project team members (including founders)?

We cannot advise on personnel costs for specific project team members. Any project team member labour costs should be actual costs only. The basis of these costs should be clearly described and justified within application form responses.

The Competition Guidance (in the section on “Guidance on Costs of Key Senior Staff”) confirms that: BEIS would not normally expect to see staff in key, more senior positions, e.g. CEO, FD, etc, included in applications as core project staff. Exceptionally, where BEIS is willing to provide a grant which covers the cost of staff in key senior positions, the day rate attributed to each member of key staff within the project must be agreed with BEIS at the outset and cannot be varied without written agreement.

BEIS recognises that the senior staff in start-ups or very small organisations may work as part of the core team on a GHFA project. BEIS will review all proposed staff day rates as part of the due diligence checks on successful applicants.

35. Are applicants permitted to use overhead rates that they have pre-agreed with BEIS, rather than being restricted by the “Guidance on Overhead Rates” within the Competition Guidance Notes?

No, all organisations must adhere to the overhead rates as set out in Annex 4 of the Competition Guidance Notes.

BEIS normally calculates overheads as a fixed percentage of all direct labour costs at 20%, but in exceptional circumstances, that must be fully detailed in the application, BEIS will generally pay overhead rates between 10% and 40% of labour rates. The overhead rate is agreed with BEIS before the grant award documents are issued and cannot be changed during the work.

36. Can grant recipients generate income during the grant funding period from the products or services for which they are receiving grant funding to pilot?

The definition of Experimental Development set out in section 5.4 of the Competition Guidance Notes states activities “may include the development of a commercially usable prototype or pilot which is not necessarily the final commercial product, and which is too expensive to produce for it to be used only for demonstration and validation purposes.”

In these circumstances, grant recipients are permitted to use income from their commercially usable prototypes as part of their match-funding.

Section 4: Competition Structure, Timetable and Application Process

37. We are planning to draft our application using the MS Word version of the application form so that multiple colleagues can work on it at the same time. Is it possible to submit our application by email?

No - only applications submitted using the online application form by 12pm (noon) on Wednesday 14 December 2022 will be accepted.

We recommend spending time familiarising yourself with the online application form and also watching the short how to apply video available on the GHFA website, to help you access and navigate the online application form.

38. The Application Form requests details of lead organisation status – what does this mean (particularly in the context of a start-up)?

For all organisation types this should be a brief introductory description of the lead organisation which sets the scene for assessors. Applicants should use language that can be understood by individuals without specialist knowledge or expertise.

Responses to this question are not scored. They will however be used by assessors to gain a high-level understanding of the lead organisation before they commence their detailed application assessment.

39. The Application Form requests details of the number of employees in the lead organisation – does this mean the number of employees in the project team or the actual organisation?

The number of employees in the lead organisation refers to the whole organisation, not just the project.

40. The Application Form requests details of the number of partner organisations supported to deliver the project – does this include both project consortium members and sub-contractors?

The number of partner organisations supported to deliver the project refers to the number of organisations within the consortium (if applicable).

It is important to note that sub-contractors are not considered project consortium members. Sub-contracting work to a third-party therefore does not classify as collaboration when considering the maximum level of public funding that can awarded to a project (see Table 3 of the Competition Guidance Notes).

41. Are applicants allowed to upload videos to their application? If not, are they allowed to include a link to a video?

No, video uploads and links cannot be submitted in response to Application Form questions.

Any videos or links shall not be reviewed as part of the application assessment process.

42. Do you have any advice for first-time grant funding applicants?

We would recommend all applicants review the ‘how to apply’ video which includes some general tips to follow when preparing an application.

How to apply video

We would encourage all applicants to ensure that they read the Competition Guidance Notes and Application Form in full before submitting their application. These documents are designed to inform applicants about the specific types of information that should be submitted. They should therefore be referred to throughout the application process. It is also recommended that applicants ensure that they are addressing competition assessment criteria within their application responses.

43. Are there any templates available for the Risk Register, Gantt chart or Organogram?

We cannot provide Gantt chart or organogram templates as these tend to be specific the needs of individual projects.

The risk register can be in the form of a table which covers at minimum all the requirements set out in section 16.1.4.2 Criterion 2 – Deliverability of the Competition Guidance Notes.

44. When would you expect the GHFA Discovery Phase to start?

We expect Discovery Phase grant funded projects to commence delivery from mid-March 2023.

45. We are keen to understand the level of detail and reporting requirements in the Discovery Phase. Can you please share details of interim reporting updates and a template for the Discovery Phase report?

Projects will be required to submit a project progress report every quarter. This is expected to be a concise report covering as a minimum the requirements set out in section 13.2 of the Competition Guidance Notes.

The template for the Discovery Phase report will not be available until a later date. The report will however be structured in line with requirements set out section 7.1 of the Competition Guidance Notes.

46. Does BEIS have a target for how grant funding will be allocated across the home retrofit value chain?

Our aim is to support the establishment of a diverse range of green finance products which incentivise domestic energy efficiency, low carbon heating, and micro-generation retrofit for owner occupiers and private landlords of existing homes. However, we will not be setting targets for how funding is allocated across the value chain.

Eligible applications which pass the minimum score threshold will be placed in a ranked list with the highest scoring project first. The funding will be allocated starting with the highest scoring project. Remaining funding will be allocated to the next highest ranked projects in order, until the funding has been allocated or until no more projects meet the minimum funding criteria.

Please see section 9.2 of the Competition Guidance Notes for further details of how Discovery Phase funding will be allocated.

Section 5: Miscellaneous

47. How can we engage with potential funding application consortium partners?

It is recommended that any organisations looking to develop cross-sector partnerships register on the Meeting Mojo matchmaking platform so that other potential applicants can find out about your organisation and products.

48. We are a home retrofit solution provider that has limited relationships with the finance sector. Will this programme provide us with the opportunity to establish partnerships with the finance providers to develop home retrofit finance solutions?

Yes, a key objective of the Green Home Finance Accelerator is to enable development of partnerships between lenders, investors, energy efficiency, low carbon heating and property value supply chains.

Please do however note that should an application not include a finance provider at the initial Discovery Phase, we expect applicants to set out how they intend to recruit a suitable finance partner or partners during the Discovery Phase to enable a green finance product to be successfully piloted during the Pilot Phase.

49. Can you please confirm whether the list of validation methods in the Competition Guidance Notes is exhaustive?

The list of verification options set out within the Competition Guidance Notes was included to stimulate thinking and it is not intended to be exhaustive. Applicants are welcome to propose additional and alternative validation methods.

50. What level of evaluation input will be required from grant recipients? How will this compare with other BEIS programmes such as Heat Pump Ready which have Trial Support and Learning workstream?

Specific evaluation requirements of GHFA projects will be dependent upon the scale, scope and type of projects funded, but these are likely to include:

• 3-4 one-hour meetings with the lead and partner organisations to discuss project delivery and impact with an independent evaluation contractor. These are expected to occur at project start, during project delivery, and following project completion.
• Supporting access to stakeholders that projects work with and engage during the Discovery and Pilot Phases, such as consumers, installers, and other stakeholders in the retrofit supply chain, who can provide evidence of project delivery and impact. This will involve sharing contact details of these stakeholders with an independent evaluation contractor, and projects are expected to seek explicit and informed consent for the sharing of this information through data sharing agreements and/or privacy notices with these stakeholders.

These requirements are in addition to project monitoring and reporting requirements set out in section 13 of the Competition Guidance Notes. Where monitoring and reporting information is sufficiently detailed, BEIS will make use of this evidence for evaluation purposes and seek to reduce the contact time required of organisations themselves.

The GHFA programme does not include a workstream equivalent in scale to Heat Pump Ready Trial Support and Learning activities and the same level of engagement is therefore not expected across both programmes.

51. The Competition Guidance Notes (Annex 5: Social Value – Tackling economic inequality) indicates Pilot Phase applicants will be required to “demonstrate collaboration throughout the supply chain” – what does this mean in practice?

The Model Response Guidance within Annex 5 of the Competition Guidance Notes sets out indicative measures to ensure supply relationships relating to the grant will be collaborative, fair and responsible. These include engagement, co-design/creation, training and education, partnering/collaborating, secondment and volunteering opportunities.

52. We want to share as much information as possible to help achieve the aims of the GHFA programme, however, we also want to ensure we protect our commercial IP. What information would we have to share publicly on the results of the project?

Please refer to section 7.1 of the Competition Guidance Notes for details of the only project deliverables that will be shared publicly.

Deliverables for publication will not be expected to include any information that may impact on an organisation’s Intellectual Property (IP), is confidential or commercially sensitive.

Please see section 13.1 of the Competition Guidance Notes for further information on intellectual property and the Model Grant Agreement (see GHFA GOV.UK webpage) for full details on the proposed arrangements for intellectual property rights material.

53. Are PricewaterhouseCoopers (PwC) or the Carbon Trust eligible to be a consortium partner?

No - PwC, supported by The Carbon Trust, has been contracted by BEIS to support the delivery of the programme and they are not permitted to apply for grant funding.

54. We have noted that Part C of Declaration 5 - Northern Ireland Protocol Questionnaire contains some information beyond the scope of the Green Home Finance Accelerator.  Can you please issue an amended version of this document? (question published 13 December 2022)

Any Great Britain-based businesses that are potentially in scope of the Northern Ireland Protocol are advised to proceed with submitting their application form without completing Part C of the Northern Ireland Protocol Questionnaire.

An updated version of the Northern Ireland Protocol Questionnaire will be issued to relevant applicants during grant award due diligence processes.

Annex 1 - Business Definitions: Further Information

The following information is aligned with the methodology set out within the European Commission: User guide to the SME Definition. Please note that applicants must use the Business Definitions set out in Table 2 of the GHFA Competition Guidance Notes to determine whether their organisation is an SME - the EU SME user guide definitions are not applicable. The user guide can however be used to reference illustrative case studies and further useful information.

1. Background Info

When a business is applying to the GHFA, the organisational structure for that business, that is the relationships that the business has with other businesses (direct or indirect), need to be taken into consideration when determining which Business Definition (micro, small, medium or large as set out in section 8.2 of the Competition Guidance Notes) is applicable to the applicant business.

Where an applicant business has relationships with other businesses, it must first establish using the guidance in section 2, 3 and 4 below, whether it is:

• an autonomous business
• a partner business; or
• a linked business

The applicant can then use the guidance below on ‘Establishing which data to take into account’ in section 2, 3 or 4, to calculate which business definition (i.e. SME category) is applicable.

Depending on the type of its organisational structure, a business may have to take into account:

• only its own data (if it is an autonomous business)
• a proportion of the data of any partner business, or
• all the data of any business considered linked to it

Businesses that draw up consolidated accounts or that are included by way of full consolidation in the consolidated accounts of another business are usually treated as linked businesses.

2. Am I an autonomous business?

A business is autonomous if:

• it is totally independent, i.e. it has no participation in other businesses, and
• no business has a participation in it

or

• it has a holding of less than 25 % of the capital or voting rights (whichever is higher) in one or more other businesses; and/or
• any external parties have a stake of no more than 25 % of the capital or voting rights (whichever is higher) in the business;

or

• it is not linked to another business through a natural person in the sense of the definition (see below) of a linked business.

Establishing which data to take into account (when calculating the appropriate business definition):

If an applicant business is autonomous, it uses only the num­ber of employees and the financial data contained in its annual accounts to check if it respects the thresh­olds set out in section 8.2 of the Competition Guidance Notes.

Exceptions

A business may still be considered autonomous, and thus as not having any partner business, if the 25 % threshold is reached or exceeded by any of the following types of investors:

• public investment corporations, venture capi­tal companies and business angels;
• universities and non-profit-making research centres;
• institutional investors, including regional de­velopment funds;
• autonomous local authorities with an annual budget of less than GBP 9 million and fewer than 5 000 inhabitants.
• One or more of the above investors may indi­vidually have a stake of up to 50 % in a business, provided they are not linked, either in­dividually or jointly, to the business in question (see below: ‘Am I a linked business?’ for the notion of linked business).

3. Am I a partner business?

This type of relationship describes the situation of businesses that establish certain financial partnerships with other businesses, without one exercising effective direct or indirect control over the other. Partners are businesses that are nei­ther autonomous nor linked to one another.

Definition

A business is a partner business if:

• the business has a holding equal to or great­er than 25 % of the capital or voting rights in another business and/or another business has a holding equal to or greater than 25 % in the business in question; and
• the business is not linked to the other business (see below: ‘Am I a linked business?’). This means, among other things, that the business’ voting rights in the other business (or vice versa) do not exceed 50 %.

Establishing which data to take into account

With respect to partner businesses, the business in question must add a proportion of its partner’s staff headcount and financial data to its own when determining which business category it falls within.

This proportion will reflect the percent­age of shares or voting rights — whichever is higher — that are held.

For example, if a business has a 30 % stake in another business, it adds 30 % of the partner business’ headcount, turnover and balance sheet total to its own figures. If there are several partner businesses, the same type of calculation must be made for each partner business situated immediately upstream or downstream from the business in question.

In addition, the proportionate data of any business that is linked to any of a business’ partners need to be taken into account. Data of a partner of a partner, however, are not to be considered.

Further data may be required on a case-by-case basis (e.g. consolidation by equity) to establish the relationships between the business to be as­sessed and potential partner or linked businesses.

What about the data of a partner’s partner?

When a partner business itself has other partners, only the data of the partner business(es) situated immediately upstream or downstream need to be taken into account.

What if a partner is linked to another business?

In this case, 100 % of the data of the linked business must be included in the data of the partner business (see below: ‘Am I a linked business?’).

The applicant business in question should then include in its own data the percentage equal to the holding of the partner business (see below: ‘How to calculate the data of linked businesses’).

4. Am I a linked business?

Linked business are those that form a group through the direct or indirect control of the ma­jority of voting rights of a business by another or through the ability to exercise a dominant in­fluence on a business.

Definition

Two or more businesses are linked when they have any of the following relationships:

• one business holds a majority of the share­holders’ or members’ voting rights in another;
• one business is entitled to appoint or remove a majority of the administrative, manage­ment or supervisory body of another;
• a contract between the businesses, or a provi­sion in the memorandum or articles of associ­ation of one of the businesses, enables one to exercise a dominant influence over the other;
• one business is able, by agreement, to exer­cise sole control over a majority of sharehold­ers’ or members’ voting rights in another.

A typical example of a linked business is a wholly owned subsidiary.

Where a relationship of this kind occurs through the ownership of one or more individuals (acting jointly), the businesses involved are considered as linked if they operate on the same or adjacent markets.

Establishing which data to take into account

With respect to linked businesses, 100 % of the linked business’ data must be added to those of the applicant business in question to determine if it meets the staff headcount and one of the finan­cial thresholds of the Business Definition.

How to calculate the data of linked enterprises

(The percentages given below are purely illustrative).

My enterprise A owns 51 % of C and 100 % of D, while B has a 60 % stake in my business.

As the holding in each case is above 50 %, I take 100 % of the data from each of the four enterprises concerned when calculating my headcount and financial thresholds.

My total = 100 % of A + 100 % of B + 100 % of C + 100 % of D.

Summary

Whether a business draws up consolidated accounts or not, the ultimate data to consider should include the data of:

• any partner company;
• any company linked to it;
• any company linked to any of its partners;
• any of the companies linked to its linked com­panies;
• any of the partners of the linked companies