So, you want to retrofit but are not sure how you’re going to finance it? Depending on where you are in the world, you might be fortunate to get some help. Some countries seem very committed to decarbonising existing building stock, putting their money where their mouth is with retrofitting funds. Others… well, they still have some catching up to do. The following links provide information or resources for financing your very own projects.
A note of caution: whether government-backed initiatives or private bank loans, we don’t endorse any of the products listed here, nor do we investigate the small print. But this should give you an idea of what’s out there, and a starting point for your own research – after all, every building and every occupant has their own needs, so it’s advisable you take a look and find your best fit.
Ireland
Sustainable Energy Authority of Ireland (SEAI) offers a range of grants for insulation, heat pumps, heating controls, and solar powered hot water and electricity, as well as support for setting up community energy projects. Check back occasionally for new funding rounds of the now-expired deep retrofit grant. Those in receipt of social benefits can also apply for free insulation upgrades.
The ProEnergy Home Scheme from the Credit Union Development Association (CUDA) funds end-to-end projects – covering a project from conception to implementation. Services offered include a property assessment, assigned project manager, and a partial loan to cover all expenses.
Green personal loans from AIB and Green Home Improvement Loans from the Bank of Ireland both support home retrofit projects.
Europe
When launched, the EU’s Social Climate Fund will be a temporary finance pot that will support vulnerable households to invest in emission-reducing measures and underpin innovation in decarbonising the transport and building sectors.
USA
Property Assessed Clean Energy Programs (PACE) offers a form of loan that finances upfront upgrades and repairs to private property. This is repaid over an average of 10-20 years through increased property tax. There are some known complications, including a lack of understanding of the financial mechanisms among the contractors who ‘sell’ the loans.
Energy Efficient Mortgages (EEM) are available for Americans to purchase properties certified by Energy Star, or to improve existing homes. Benefits include a higher lending rate than normal mortgages, due to the potential savings enabling occupants to pay back higher sums faster.
Mexico
The Green Mortgage Programme has proven a success since its conception in 2007. It specialises in giving low-income earners a chance to own their own home, combined with improved wellbeing and savings made through energy-efficient technologies. It even supports purchasing of ecological toilets and water-saving sprinklers and taps.
Guyana
Green loans for businesses are starting to take off in Africa. One lender, GBTI, offers up to 50 million USD for large-scale air quality, solar power, and low carbon upgrades. Not one for the average homeowner, but it does indicate a shift in the local green financing landscape.
Australia
Mozo, the money saving zone, has a handy list of green home loans that residents can consider for bringing their properties in line with the antipodean NatHERS energy rating system. They’re not all suitable for retrofitting so, like with any financial commitment, do your homework.
UK
The Government’s Green Deal offers loans and links to local grant possibilities for making energy-saving improvements at home. This is the second iteration after a similar scheme closed in 2015 due to lack of interest. See the case study below for details.
Community Energy England lists an exhaustive choice of funds including location-based grant programmes, community energy crowdfunding platforms, and post-COVID stimulus packages.
The Home Heating Cost Reduction Obligation grant funding scheme offers low-income households the chance to make improvements that raise the comfort of their abode. Saving on heating costs can be achieved through upgrading or replacing broken or ineffectual heaters.
The Domestic Renewable Heat Incentive (RHI) offers UK properties already using heat pumps “quarterly payments for seven years for the amount of clean, green renewable heat it’s estimated their system produces”. It applies to homes and non-domestic buildings. By 2021, almost 45,000 heat pumps had been purchased this way. Rules for payments are periodically updated, and changes apply to new and existing participants, so stay informed.
Apply to the Thrive Renewables Community Benefit Programme for grants of up to £4,000 to add heat controls, draught-proofing, LED lighting, or insulation to community buildings, such as a village hall.
Localised policies and funding sources can be found under the Home Retrofit button of this interactive map from the UKGBC. Even rural counties are in on the game: Suffolk, for example, runs a Greener Homes Loan Scheme for households to replace their boilers or install renewables, and Plug In Suffolk is a chance for parish councils to fit EV charging stations.
It Ain’t Easy Being Green: The UK’s Green Grants – A Short Case Study
A lot can be learnt from what has gone before. The UK is making waves in the retrofitting world, but pioneers don’t always get it right. The important thing is not to see this as a failure, but as foundations to build upon better. A brief look at the country’s attempts at national grant schemes offers us some helpful conclusions about future funding packages.
The UK’s first Green Deal folded in 2015, a victim of its own ambition; 25-year loans paid for retrofits upfront but were seen as an extra tax for the middle classes and far too daunting for low-income households already struggling to pay their household bills. People want incentives, not burdens, so retrofits slowed. Only 14,000 households (0.05% of expected rates) applied for loans in 2013-15.
Not to be deterred, Blighty bounced back with the Green Homes Grant, which offered “£5,000 or £10,000 to put in insulation or low-carbon heating”. Low-income households especially were set to gain, being offered the higher amounts so as not to need to contribute to upgrades.
It was scrapped in March 2021 after only 6 months.
What Went Wrong?
A confusing application process, bureaucracy, and a lack of coordination with the construction sector are blamed for scaring away the public.
Furthermore, these costs were attached to the house, not the occupant. Taking steps to increase a home from D to A/B rating in the UK raises the value by up to £24,766. It is possible, though, that this raises property taxes. To make matters more complicated, new residents would inherit the bill with a change of tenancy. All in all, this made retrofitted homes harder to sell or rent out.
A report released by the National Audit Office (NAO) claimed the downfall as in the implementation: a rushed design (in just 12 weeks!); unrealistic expectations put on tradespeople, including pricy accreditation courses and timeframes; vouchers not being made available for applicants; limitations in the renovations applicable (thermal upgrades, but no solar panels, for example); and delays for contractors to receive payment for work already completed.
Recommendations for Grant Schemes
The collapse of retrofit-ready grants leaves a vacuum in efforts to decarbonise and emphasises why robust, easy-to-use, supported schemes are essential.
Based on the guidance the NAO report provides, here are our tips for how we can do better next time:
- Measure what did work and build upon it, especially regarding the success rates of engagement with low-income and vulnerable households.
- Talk to a subset of each stakeholder group to ask what worked for them and what didn’t. Scrap the uninteresting and or repulsive elements; it makes sense to run with far fewer winning ideas than stretching resources over many that fall flat.
- Understand our cities’ fabric and target subsidised retrofits at the worst offending properties. Upgrading relatively efficient properties isn’t the most cost-effective approach.
- Ensure application processes are easy to follow and supported. That support must be made available. That means in terms of flexible times of the day/week, safe and inviting public places, with well-trained and personable professionals who are sympathetic and respectful to individuals’ circumstances.