Liverpool-based clean tech specialist Heatio will partner with Perenna Bank and Energy Systems Catapult to launch a long-term fixed-rate green mortgage that rewards homeowners with a preferential interest rate for retrofitting their homes with low-carbon technologies. The collaboration aims to facilitate broader adoption of low-carbon, energy-efficient solutions and address financial barriers hindering access to green energy.
Recognising that the capital costs may be a barrier for some homeowners, the initiative will enable them to spread the costs over a longer period by adding the amount to their mortgage when they apply. Homeowners can secure extra funds to cover the upfront expenses associated with adopting new technologies and upgrading their homes. Importantly, this borrowing will be seamlessly integrated into the long-term mortgage.
Long-term Fixed Rate Green Mortgage
The consortium will introduce the Green Mortgage solution to incentivise homeowners to make energy-efficient improvements to their homes. Those considering the installation of clean technologies such as heat pumps, solar PV, or battery storage will be rewarded with a lower interest rate on their mortgage once the improvements have been completed and validated by the Heatio Flexx platform & home energy management system.
The project is supported by the Department for Energy Security & Net Zero through its Net Zero Innovation Portfolio (NZIP), as part of the department’s Green Home Finance Accelerator (GHFA). The GHFA was established to fund innovative green finance products, promoting the uptake of home energy efficiency and low-carbon heating measures.
Recent research conducted during the 2023 GHFA Discovery Phase by the consortium revealed that the largest barrier to getting low-carbon technologies is cost, followed by a lack of financial support available. Many don’t know where to start making energy-efficient improvements and acknowledge that they would need some form of finance to help them afford the upgrades required in their home.
The initiative will deliver a complete wraparound service, providing homeowners with tailored insights on what home improvements they can make through to the specification and installation of technologies.
As a core component of the service, the Heatio Flexx Home Energy Management Solution will implement a data-driven approach to deliver an accurate energy profile and home insights to generate a bespoke roadmap of improvements, supporting homeowners with ways in which they can achieve energy efficiency.
Heatio Flexx will also specify energy-efficient technologies tailored to individual households based on their actual energy usage patterns and property characteristics. It will provide accurate sizing and specification of low-carbon technologies to deliver consumer confidence in reducing energy costs, maximising energy efficiency and lowering their carbon footprint. Validation of the installation of these new low-carbon technologies will also be provided digitally via the Heatio Flexx platform.
Thomas Farquhar, Co-Founder of Heatio, emphasised the significance of incentivising energy-efficient home improvements. "Our initiative with Perenna and Energy Systems Catapult is a bold step towards making energy-efficient upgrades not only financially accessible but also rewarding. This next-generation Green Mortgage drives energy reductions, not just rewarding those who are already efficient or low carbon. It’s important that we convey the idea that decarbonisation is not only achievable but beneficial. By making the transition to alternative heat and energy sources more seamless and appealing to homeowners we can drive forward the enthusiasm of homeowners to participate.
The integration of the Heatio Flexx Home Energy Management Solution ensures a personalised and data-driven approach, providing homeowners with the tools and insights needed to embark on a journey towards a more efficient home. Supporting consumers with accurate information, based on actual in-home data, simplifying the process and giving accuracy and confidence to consumers will remove barriers to adoption. Driving positive change in the residential energy landscape, one home at a time."
Arjan Verbeek, CEO of Perenna Bank, "We are delighted to be part of the Green Home Finance Accelerator and have the opportunity to work with Heatio and Energy Systems Catapult to pilot this innovative mortgage product that combines long-term security with improvements in home energy efficiency."
Heatio is spearheading the drive to true energy independence for UK homes with a data-driven approach to home energy usage. To support & validate the deployment of the initiative, Heatio will deliver its Home Energy Management Solution – Heatio Flexx. This provides accurate system specification, predicted performance, in-home optimisation and impact validation.
Will lead the project, design, launch and market the financial product, and work with Heatio to ensure the data and validation will meet its internal and external requirements.
Energy Systems Catapult
Energy Systems Catapult provides technical, commercial and policy expertise to drive innovation across the whole energy system. Their independent and technology-agnostic approach has built a trusted track record in delivering thought leadership, collaborative R&D and commercial commissions. Drawing on whole systems expertise coupled with a range of products, services, models, tools, labs – from world class Net Zero modelling and cutting-edge systems engineering – through to digital & data science and real-world innovation trials that drive start-ups to success.
The Department for Energy Security and Net Zero
The Department for Energy Security and Net Zero provides dedicated leadership focused on delivering security of energy supply, ensuring properly functioning markets, greater energy efficiency and seizing the opportunities of net zero to lead the world in new green industries.
The funding from the Green Home Finance Accelerator comes from the department’s £1 billion Net Zero Innovation Portfolio which provides funding for low-carbon technologies and systems and aims to decrease the costs of decarbonisation helping enable the UK to end its contribution to climate change.