Lender innovation and strategic partnerships are fuelling growth in the UK’s unsecured green home loan market. With the majority of the UK’s 29 million homes requiring energy-efficient upgrades, a diverse range of financial solutions will be essential to support homeowners in their investment.

Unsecured Green Home Loans Explained

An unsecured green home loan is a specialised form of unsecured consumer financing tailored specifically to assist homeowners with financing energy efficiency and green home upgrades. Offered by lenders, unsecured green home loans are characterised by borrowing smaller amounts of money over shorter periods, compared to mortgage finance.

The shorter borrowing term of unsecured finance can mean a lower total cost over the loan’s lifespan than a mortgage (depending on the rate and term length). This type of flexible financing can be well-suited to the purchase of individual technologies like solar panels or heat pumps, or individual home improvement projects like installing insulation.

Overcoming risk in the unsecured loan market

The expansion of the green home finance market poses unique challenges and risks for lenders. The Green Finance Institute’s Built Environment team has been innovating a series of solutions to overcome these risks to make affordable, flexible finance available to consumers for home retrofit. We are now working with the market to bring these solutions to fruition.

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Resources

Unsecured green home loans : Demystifying the market

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Unsecured green home loans : Managing Risks

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Lender’s Handbook on Green Home Retrofit and Technologies

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Company Name	Product Name	Link to Product	Launch Year	Specific use of funds? (e.g. Solar Panels)	Whole of Market / Tied?*	Validation Required?	Aligned or supporters to the GHFPs?
Lendology CIC	Energy Efficiency Loan	https://www.lendology.org.uk/loans/energy-efficiency-loans/	2005	Customers can only use the funds for specific works as approved by their local council – for energy efficiency that would be windows, draught proofing, insulation, and heat pumps. Works must be approved prior to commencement of the works. Funds can also cover the deposit.	TiedOnly available in areas where Lendology has a partnership with the local council	Full quotes and an invoice required prior to releasing any loan funds.	Aligned
Lendology CIC	Renewable Energy Loan	https://www.lendology.org.uk/loans/renewable-energy-loans/	2010	Customers can only use the funds for specific works as approved by their local council – for a renewable energy loan that would be solar panels or other renewables. Works must be approved prior to commencement of the works. Funds can also cover the deposit.	TiedOnly available in areas where Lendology has a partnership with the local council	Full quotes and an invoice required prior to releasing any loan funds.	Aligned
Sunsave Energy Limited	Sunsave Plus	https://www.sunsave.energy/sunsave-plus	2024	Financing the installation of retrofit solar panels and batteries.	Whole of Market	Sunsave are both the lender and the installer for the green technologies under Sunsave Plus, meaning that any loans dispersed are validated as green.	Aligned
Tandem Bank	Green Home Improvement Loans	https://www.tandem.co.uk/borrow/home-improvement-loans	2019	Solar panels & Battery storage, heat pumps, double glazing/energy efficient windows.	TiedThrough approved retailers/ installers.	Funds paid directly to installer for approved goods and installation.	Committed to align
Propensio Finance	Energy & Renewables	https://www.propensio.co.uk/our-products/renewables/	2019	Solar panels, battery storage, EV chargers, Air source heat pumps.	Whole of Market	Use of funds validated through EPVS.	Aligned
Plend	Make My House Green	https://www.makemyhousegreen.com/	2023	solar panels, heat pumps	Whole of Market	Make My House Green/Switched takes care of this	No
Santander UK	Home Energy Cashback	https://www.santander.co.uk/personal/support/greener-living/greener-homes/green-improvements	2024	We have a range of retrofitting measures via partners (Octopus, Vibrant, MakeMyHomeGreen)	TiedCurrently only available to existing Santander mortgage and / or current account customers	The installation (and cost) needs to be verified by the supplier / installer	Committed to align

* to denote availability to specific customers

Table last updated in April 2024.