Warm Home Loans Scheme Launches to Fund Low-Carbon Home Upgrades

The government-backed Warm Home Loans scheme was introduced earlier this week to let UK households finance heat-pump, battery and solar-panel installations with interest-free or low-interest borrowing. Loans range from £7,500 to £35,000; up to £10,000 can be used for an air-source heat pump and up to £35,000 for a ground-source unit. Energy suppliers such as British Gas and E.On have partnered with lenders—including Tandem Bank, Homeserve, HTG Finance, Propensio, Secure Trust Bank, Selina Finance, South Manchester Credit Union, Sunsave, The Money Co-op and This Bank—to offer the products at rates below those of high-street lenders.

The Guardian

The government estimates that installing a heat pump, battery and solar panels could reduce a household’s energy bill by as much as £550 per year, with an additional £300 possible under a time-of-use tariff. A recent E.On trial in Coventry showed fuel-poor customers saved more than £250 annually by pairing a home battery with such a tariff. Existing grant support can cover up to £9,000 a year for homes off the gas grid, helping to meet the typical £13,600 cost of a heat-pump system.

The Guardian

Energy Secretary Miatta Fahnbulleh said the scheme is intended to keep energy affordable and enable families to upgrade homes without upfront costs. E.On UK chief executive Chris Norbury described the loan programme as a way to “remove barriers to low-carbon technologies” after his company’s trial demonstrated significant savings for vulnerable customers.

The Guardian

The Warm Home Loans programme is funded from a £2.7 billion five-year budget. Sources indicate that Treasury officials plan to trim “hundreds of millions of pounds” from that allocation, arguing the subsidies have primarily benefited middle-class households. Nonetheless, the grants for off-grid homes are expected to remain, allowing them to be combined with the low-interest loans to cover full installation costs.

The Guardian

• “Energy is an everyday essential that must be affordable for everyone. These government-supported loans will help families across the UK upgrade their homes with no upfront costs to make them warmer and cheaper to run.” — Miatta Fahnbulleh, the energy secretary

The Guardian