Long-term mortgage provider Perenna is set to introduce lower-cost loans for homeowners who commit to enhancing their properties’ energy efficiency.
In collaboration with Heatio and Energy Systems Catapult, Perenna has obtained funding from the UK Government to support the introduction of its innovative Perenna Retrofit Mortgage. This initiative is part of the Net Zero Innovation Portfolio (NZIP) under the Department for Energy Security & Net Zero, which aims to promote the development of sustainable finance solutions designed to incentivize domestic energy efficiency and low-carbon heating retrofits.
According to the UK Green Building Council, almost every residential property in the UK—approximately 29 million homes—requires some form of retrofit. The Climate Change Committee projects that around £250 billion will be necessary for the complete decarbonization of housing by 2050.
In contrast to typical green mortgages, the Perenna Retrofit Mortgage targets homes that require upgrades rather than those that are already energy efficient. Set to launch in Q4 2023, Perenna will provide a flexible long-term fixed-rate mortgage featuring a green rate discount, rewarding homeowners for reducing energy consumption. Customers who successfully complete an approved retrofit will see their mortgage interest rate reduced for the duration of the loan.
Perenna anticipates that some borrowers with larger mortgage amounts could save over £60 monthly, totaling £720 annually, and up to £21,600 over a 30-year term.
The mortgage will leverage a data-driven, digital framework for energy assessments, with installation and energy savings verification supported by a home energy management system (HEMS) provided by Heatio. Following the product’s launch, Energy Systems Catapult will perform qualitative and quantitative research to assess consumer experiences at crucial interaction points.
The project will span 12 months, with the pilot scheme expected to commence in summer 2024.
Arjan Verbeek, founder and CEO of Perenna, emphasizes the need for change in the renewable energy sector, stating, “Perenna aims to reshape the conversation around renewable energy technologies. Numerous barriers persist in retrofitting homes, including complicated offers and vague directions on the necessary steps. This situation must evolve to tackle one of the principal challenges in our journey toward achieving net zero.”