Replicating international approaches to retrofit finance could reduce bills in 675,000 UK homes a year
- Adopting learnings from successful international examples to drive demand for energy efficiency will bolster Government’s commitments on Warm Homes
November 28, London: Today, the Green Finance Institute unveils its latest analysis, ‘Unsecured Green Home Loans: Consumer Protection and Scale in International Markets’, analysing how international innovation and consumer protection can be applied in the UK to accelerate home retrofits required for the decarbonisation of the built environment.
The Department for Energy and Net Zero’s next steps for the Warm Homes Plan, announced last week, is welcomed to support retrofitting UK homes, however, provisions needs to be made in the UK for solutions to offer the low-interest loans and grants outlined in the labour manifesto and scale-up low-cost finance for the 23.3 million privately owned homes which contributed to 20% of the UK’s greenhouse gas GHG emissions in 2022[1]. The GFI’s latest report compares the UK’s green loan market with international counterparts including Ireland, Belgium and Germany. It identifies areas to inform legislative efforts and leverage learnings that open pathways to a scaled unsecured green home loan market and support a more competitive green finance market.
The unsecured green home loan market is experiencing rapid growth in the Republic of Ireland, driven by the need to meet sustainability targets and consumer demand for green housing solutions. The report estimates that if the UK developed a government-coordinated national programme, proportionate to Ireland’s Home Energy Upgrade Loan Scheme (HEULS), it could be expected to support retrofit of up to 675,000 homes per year, exceeding the Climate Change Committee’s recommended pathway by 175,000[2].
By increasing the availability of financing, underpinned by an enabling policy environment, homeowners will be able to take the measures needed to improve energy efficiency and resilience of homes, in turn reducing bills, fostering robust supply chains and driving growth across the UK, ultimately supporting the whole retrofit market, including private-rented and social housing.
Ryan Jude, Built Environment Programme Director at the Green Finance Institute says:
“The new government’s commitment to the Warm Homes Plan is welcome¸ to both reduce consumers’ bills and contribute towards our climate goals. By learning from successful international models on scaling up green home loan markets, the UK can quickly develop a government-backed scheme to significantly increase the number of energy efficient homes in the UK.”
[1] Families and households in the UK – Office for National Statistics, The-Housing-Stock-of-the-United-Kingdom_Report_BRE-Trust.pdf
[2] June 2022 Progress in reducing emissions 2022 Report to Parliament (theccc.org.uk)
