Scotland’s independent Green Heat Finance Taskforce has urged the Scottish Government to collaborate with the Equity Release Council from 2024.
The aim is to develop an information framework and guidance for Green Retrofit Equity Release products, recognising the significant growth potential in financing climate-friendly heating and energy efficiency improvements in Scottish homes.
The Taskforce’s first report, published today, focuses on assisting property owners in finding optimal solutions for their situations. It includes nine recommendations to enhance private finance options for eco-friendly home improvements.
Additionally, the report examines obstacles in private funding for environmentally friendly heating systems, such as air source heat pumps. It highlights the potential for developing new financial products like green mortgages and equity release mechanisms on a larger scale.
The report concludes that the market for financing green heating and insulation is still nascent but growing. The number of green mortgage products has surged from four to over 60 in the past four years. It anticipates significant growth as demand for clean heating systems rises.
The Taskforce suggests the Scottish Government should lead in curating a variety of private financing options to aid consumers in managing the initial costs of installing clean heating systems.
Sara Thiam, Taskforce co-chair and chief executive of Prosper, said: “A robust economy is intertwined with social and environmental wellbeing. This report underscores the benefits – for our economy, planet, and individual health and wellbeing – of collaborative Government and industry efforts in funding and financing home transformations for the future.
“Understanding the scale of change needed across sectors and leveraging Scotland’s strengths in financial services and renewable energy are key to thriving in a global economy focused on Net Zero.”
Patrick Harvie, Zero Carbon Buildings Minister and Taskforce co-chair, expressed gratitude for the Taskforce’s contributions. He emphasised the importance of improving finance access and giving assurance to those aiming to make their properties more energy-efficient. Harvie noted that while the products identified are suitable for those who can afford them, a combination of public and private financing might be necessary for a broader transition to clean heat.
Jim Boyd, CEO of the Equity Release Council, added: “This recommendation can significantly innovate the later life mortgage market and contribute to a decarbonised housing market. Green equity release products are crucial for retrofitting homes and reducing the carbon footprint.
“They allow older consumers to invest in sustainable housing, benefiting future generations and aiding in the fight against climate change. We are eager to work with the Scottish Government and our members to implement the Taskforce’s recommendation.”
