The UK Coalition government has closed the Low Carbon Buildings Programme (LCBP) to new applications, effective from May 24.
The closure is part of the government's commitment to making £6bn of departmental spending cuts in 2010/11, with the Department of Energy and Climate Change (DECC) contributing £85m to this total.

A total of £3 million of savings is being taken from the programme resulting in its immediate closure to new applications.

The DECC said LCBP has been successful in increasing the UK's uptake of low carbon buildings technology and developing the assembly, supplier and installer base. The LCBP grant programme has provided 20,000 grants for the capital and installation costs of microgeneration equipment of which, to date, 11,000 have been for thermal technology.

A statement from DECC stated: 'It was anticipated that support for the proposed Renewable Heat Incentive for heat under LCBP would continue up until its proposed introduction in April 2011 however demand for grants has been unprecedented and we had very little unallocated funding remaining. It has been decided that by closing the programme now, these unallocated funds will contribute towards DECC's overall savings'.

It added: 'Since the election, government have moved very quickly to identify necessary areas of savings in line with public announcements. LCBP has not been 'singled out' for cost savings, it is one of a number of areas where savings have been identified during a thorough review of expenditure. To make sure that savings could be maximised, it was decided that closure of LCBP (and other areas) should be made immediately to prevent a run on remaining funds'.

DECC said applications that were received before the programme was closed and which are currently considered by its programme contractor BRE, will not be effected by the closure.

Applications worth £63 million for payment in 2010-11 for installation of heating renewable heating technologies are not affected by the cuts and where grant offer letters have been issued they will be processed to protect investment, innovation and jobs.

A spokeman for BEAMA (British Electrotechnical and Allied Manufacturers Association), which represents 150 UK companies, has expressed disappointment over the decision.

'Given the economic situation we appreciate cut backs are inevitable and not an easy task but BEAMA expresses concern over the funding gap presented by the LCBP closure', said Kelly Butler, BEAMA's marketing director.

She said:'Government has rightly recognised that the Renewable Heat Incentive (RHI) would take up the role of incentivising renewable heat technologies such as heat pumps. But, we are also concerned that government has not now made a clear statement showing support for the RHI, which would give confidence to the market'.

She added: 'The RHI consultation closed during April 2010 and BEAMA calls for fast announcements on RHI levels, with firm government support for their introduction in April 2011. 'Without this commitment, we question the UK's ability to ensure 12% of heat is renewable by 2020 - that is the heat contribution to the overall renewable target.'