Perenna receives grant to accelerate decarbonisation

We’re excited to share that Perenna is part of the UK Government’s Green Home Finance Accelerator (GHFA) competition, aiming to speed up the UK’s move towards lower carbon homes.

Teaming up with Heatio and Energy Systems Catapult, we’ve secured grant funding to develop and launch the Perenna Retrofit Mortgage – a long-term fixed rate mortgage which offers the reward of a lower mortgage rate for customers who retrofit.

This exciting development marks the next phase in the Accelerator competition. The Pilot Phase will see Perenna introduce this innovative product to the market and evaluate its effectiveness in motivating homeowners to undertake retrofitting projects.

We know that nearly every existing property in the UK, equivalent to 29 million homes, will require some form of retrofit. This underscores the challenge of decarbonizing homes to mitigate climate change, and the urgency with which we need to get going.

This project aims to address significant obstacles to reducing carbon emissions in UK properties by rewarding homeowners for taking action and helping them understand which measures are right for their homes.

Unlike conventional green mortgages, the Perenna Retrofit Mortgage will target homes in need of upgrading rather than those which are already efficient. The product will give consumers all the advantages of our flexible long-term fixed-rate mortgage, launched in Q4 2023, along with the benefit of a Green Discount. Upon completing a qualifying retrofit, customers will enjoy a lower mortgage rate and reduced monthly payments for the remainder of their term.

Our ‘Green Discount’ will serves as a significant incentive for homeowners to undertake retrofits, potentially saving them over £60 per month, £720 per year, and £21,600 over 30 years (assuming they don’t remortgage). This combined with energy bill savings makes the business case for home retrofits more appealing to a broader range of homeowners.

As part of the GHFA project, Perenna will also provide customers with the option to incorporate a data-driven, digital approach to energy assessment, facilitated by a home energy management system (HEMS) from Heatio. In addition, upon the product’s launch, Energy Systems Catapult will conduct qualitative and quantitative research to assess the consumer experience at key touchpoints.

This GHFA project is funded by the Net Zero Innovation Portfolio (NZIP) under the Department for Energy Security & Net Zero. The GHFA was established to facilitate the creation of innovative green finance products that promote domestic energy efficiency improvements and the installation of low-carbon technologies.

The project’s duration is set for 12 months, with the consortium aiming to launch the pilot in summer 2024.

Perenna’s founder and CEO, Arjan Verbeek, said, “Perenna wants to change the narrative on renewable energy technologies. There are too many obstacles currently to retrofitting a property, with confusing offers and unclear steps on what to do. This needs to change if we want to solve one of the biggest challenges for achieving net zero.

“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 an innovative mortgage product that combines long term security with improvements in home energy efficiency.”

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. 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.”

Energy Systems Catapult, Homes business lead, Rebecca Sweeney, said: “During the first phase of the pilot, Energy Systems Catapult partnered with Perenna to gather key consumer insights from around 1,000 homeowners and potential homeowners to determine what would most appeal when considering longer term green mortgage. During the second phase we will conduct both qualitative and quantitative research to really get under the skin of the real-world consumer experience, to ensure the retrofit improvements match the quality of the financing product.”

References

1 – 29m homes reference – https://ukgbc.org/our-work/retrofit/

2 – £250bn reference – UK Climate Change Committee, 6th Carbon Budget (Dec 2020), https://www.theccc.org.uk/publication/sixth-carbon-budget/

3 – Savings reference –