Welcome to the first edition of the Green Home Finance Accelerator LinkedIn Learnings

The Green Home Finance Accelerator (GHFA), part of the Department for Energy Security and Net Zero ’s £1bn Net Zero Innovation Portfolio, was opened in October 2022 to fund the development and piloting of green finance products that enable the uptake of home energy efficiency, low carbon heat, and micro-generation measures in the non-fuel poor sector. The programme aims to drive activity in the green finance market, test consumer appetite for novel approaches, and support diverse green finance products that incentivise improvements in domestic energy performance.

The GHFA has developed partnerships between lenders, investors, energy efficiency, low carbon heating and property value chains. On top of supporting innovation in financial products, GHFA projects are addressing consumer barriers for green home retrofit more broadly to offer comprehensive end-to-end services for customers.

The programme opened with a six-month Discovery Phase during which 26 projects were awarded a total of £4.1M grant funding to research and develop detailed project proposals. After a rigorous assessment, 13 of these projects were awarded a total of £15.3M to pilot and test their solutions on the market.

Find out more about the programme here.

Over the course of the GHFA Pilot Phase, until March 2025, we will be sharing some of the vital project learnings to enable deeper collaboration, encourage further knowledge sharing in the sector, and help to reduce obstacles for others.

Some learnings from the GHFA Pilot Phase so far

Two separate approaches to using mortgages to fund green home retrofit piloted by Scroll Finance and Perenna

Mortgage lending is a primary means for homeowners to fund home improvements. Two separate GHFA projects from Scroll Finance and Perenna aim to make it equally commonplace to use mortgages to fund green home retrofit. Scroll’s product offers a second mortgage on a home to fund green improvements. In contrast, Perenna is piloting a retrofit discount feature on remortgage products that will reduce homeowners' interest rates by 0.2% if they install renewable energy technology*.

The projects’ consumer engagement work demonstrated that, alongside the challenge of selling green finance, a fundamental issue was the need to advise, educate and motivate customers to want to install retrofit measures. They needed to develop effective ways of delivering this advice, including via third-parties, as most people access mortgages via mortgage brokers who have not previously been expected to advise customers on home retrofit. Therefore, Perenna is providing mortgage advisors with tools to help them identify retrofit opportunities for homeowners as part of the mortgage advice process – including an interactive webinar, downloadable guides and a retrofit discount calculator.

The projects have learnt that, when developing advice for homeowners, it is particularly important for lenders not to mis-sell the benefits of green home retrofit measures. Therefore, rather than providing bill savings estimates, Perenna has focused on the potential monthly mortgage saving that can be made by retrofitting. In addition, it has educated homeowners about the eligible retrofit measures applicable to the pilot (solar panels and heat pumps). Scroll works only through trusted partners including Furbnow who will undertake a home survey to ensure that advice is robust and accurate.

You can find more information about these projects on the Green Home Finance Accelerator website, where you can also find the discovery phase reports.  Alternatively, to discuss the projects directly, you can reach out to Scroll at greenfinance@scrollfinance.com or Zoyah Ahmed from Perenna at za@perenna.co.uk.

*Terms and conditions apply

Customer research from GHFA projects reveals useful insights on the customer personas most likely to engage in green home retrofit.

Chameleon , People Powered Retrofit (PPR), and Snugg each conducted consumer research as part of their GHFA projects to identify the customer personas most likely to adopt green home finance products. Across these projects, several common traits emerged. Both Chameleon and PPR noted that a significant driver for adopting energy efficiency improvements is the desire to save on energy bills. Improving home comfort was also identified as a significant motivator: Chameleon found 48% of those surveyed were driven by the desire to improve home comfort and PPR also found its respondents predominantly sought warmer, more comfortable homes. Environmental concerns were another key motivation, particularly among PPR’s respondents who were keen to reduce their carbon footprint.

There were also useful insights about the demographics of potential customers. Snugg’s research highlighted three key life stages as times when financial products are often more necessary:

• People moving into a new home where they expect to stay for 10+ years, e.g. young parents starting a family. Natwest, who are collaborating with Snugg throughout this project, had research which echoed this, finding that under 35s and first-time buyers are more open to retrofit measures.
• Parents whose children are now leaving home, leaving them with more time and financial independence to improve their home.
• Families moving into their “forever home”. PPR also found this, with a key customer persona of people wanting to future-proof their home and add value to it for the next generation.

Each project also uncovered unique insights. Chameleon found that most customers use online research as their primary information source, and increasing property value was a significant motivator for many. PPR discovered that many credit union members had already completed some retrofit measures, with specific personas like “Climate Concerned” and “Home Builders” showing the highest levels of motivation. Snugg identified two key personas for advice provision: the first is a customer seeking broad education on home energy efficiency at the start of their retrofit journey whereas the second is looking for more tailored information and options for financial support.

For more information, please check out Snugg or reach out to Ian Spiby from Chameleon at ian.spiby@gengame.co.uk or Jonathan Atkinson from People Powered Retrofit at jonathan@retrofit.coop. You can also see more about each project on the Green Home Finance Accelerator website.

Upcoming events and webinars

We will host a series of webinars on the findings from the projects in early 2025. We are also excited to be planning GHFA participation in key industry events, including Futurebuild in March 2025.

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Resources

Discovery phase case studies Resources - GHFA (carbontrust.com) - summarise the headline findings from 9 of the Discovery Phase projects.

End of discovery phase reports Discovery phase projects - GHFA (carbontrust.com) – summarise the findings from projects during the Discovery Phase.

Discovery phase webinars Events - GHFA (carbontrust.com) short presentations from projects on their key findings and next steps.

Disclaimer: The Green Home Finance Accelerator (GHFA), funded by the Department for Energy Security and Net Zero’s (DESNZ) Net Zero Innovation Portfolio (NZIP), promotes finance propositions that encourage domestic energy efficiency, low carbon heating, and micro-generation retrofit in owner-occupied and private rented sectors. PwC is supporting DESNZ to administer the grants and manage the programme, they are not responsible for the design, development or viability of any financial products, services or projects directly. The Carbon Trust is supporting PwC by leading dissemination of project insights and learning. This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, The Department for Energy Security and Net Zero, PricewaterhouseCoopers LLP, the Carbon Trust and the Projects do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.