Recent news that E.ON has entered into a partnership with personal finance company BNP Paribas was welcomed by many green energy experts. Designed to deliver the home improvements we need to realise a low carbon future for millions of home owners, it could be the first step in a new revolution.
After past initiatives like the Green Deal were closed down by the Government and Feed in Tariffs greatly reduced on installations such as solar, support for helping homeowners move to a low carbon future have been sadly lacking.
According to Michael Lewis, CEO at E.ON:
“Green mortgages have the potential to be a game changer in the delivery of affordable finance and we are ready to meet the challenge for home-owners motivated to take the step into energy efficient living.”
What Are Green Mortgages?
Green mortgages have been around for a while now but haven’t really taken off in the UK. The actual definition varies from lender to lender which can often add to the confusion. Some use it to provide home financing products for buyers who select properties which are built through sustainable, eco-friendly practices. Barclays Green Mortgage, for example, is aimed at buyers of new builds that are highly energy efficient.
Key to the success any green mortgage is providing low cost financing for those who want to make their homes more sustainable and greener.
What is E.ON Offering?
The E.ON financing and installation service is designed to help home buyers to make the right choices when it comes to various green technologies for their property. It’s important to note that the vast majority of housing stock in the UK wasn’t built with this new green energy future and sustainability in mind. That means old stock requires a substantial amount of investment to bring it up to the standards required to meet carbon emissions reductions over the next few years.
The truth is that around 70% of homes in the UK still fall below the EPC band rating of C that we all need to achieve. The green mortgage product that E.ON is looking to develop will make financing more readily available to first time buyers, home movers and those re-mortgaging their properties. The pilot scheme is part of the EU Energy Efficient Mortgage Action Plan (EeMAP) and, if successful, could see a major change in the way that many domestic green energy initiatives are implemented in the UK.
As part of the arrangement, BNP Paribas would provide the financing and E.ON the installation service for a variety of green infrastructure projects. That could include everything from improving insulation in your home or putting in new double glazing to updating heating systems, installing heat pumps and even installing solar panels and battery storage. Other green initiatives such as EV charging points for cars could also be included in the service provision once it’s up and running.
The move by E.ON has been greeted positively. According to BNP Paribas CEO, Stephen Hunt:
“As a pioneer in positive banking we are proud to play an active role in both driving forward new sustainable business opportunities and helping the local communities in which we work throughout the UK.”
Whether other energy providers begin to follow suit when it comes to green mortgages and other financing remains to be seen. If we are to move towards a low carbon society, however, it’s initiatives like this that are going to make it possible.