The Green Finance Institute (GFI) has announced a partnership with the Greater Manchester Combined Authority (GMCA) to trial and scale innovative financing solutions for home energy efficiency improvements.
The collaboration means that thousands of people across Greater Manchester will receive support to make their homes more energy efficient and cut fuel bills, Greater Manchester Combined Authority (GMCA) has said.
Homeowners and landlords will be funded to pay for better insulation and low carbon heating as GMCA aims to upgrade 60,000 homes in Greater Manchester per year.
The homes will be supported using a mix of public and private sector finance, unlocked through a string of targeted intervention.
One measure will be the launch of a green bond from GMCA, with proceeds raised set to go towards projects that train retrofit professionals and deliver retrofitting schemes in social housing and other energy-inefficient homes. The council will put money towards the bonds but also enable businesses and individuals to invest.
Other interventions set to be made include the introduction of green mortgages and rental agreements, with the GFI and council collaborating with landlords, lenders and mortgage intermediaries to design and implement the contracts.
Green mortgages and rental agreements provide an incentive for the buyer or landlord to renovate buildings, through the offering of a lower interest rates and/or access to a larger loan amount.
For those who may own their property outright, or do not wish to have a green mortgage or rental agreement, the partnership will introduce a new structure through which groups of homes interested in retrofitting can be ‘aggregated’.
It’s believed that carrying out retrofitting on multiple properties at the same time can bring down installation costs.
The partnership between GMCA AND GFI will test what it claims is the UK’s first property-linked finance scheme in which property owners can sign up for support to pay for energy efficiency projects. The money is then repaid through the property tax bill. Repayment obligations typically pass to the new owner if the property is sold. This has proven successful for commercial buildings in the US.
As the UK’s first property-linked finance scheme, this initiative would allow residents to invest in the net-zero agenda by providing funding for council decarbonisation projects and energy efficiency measures and boost the development of green mortgages.
The scheme is part of GMCA’s retrofitting strategy to improve homes and buildings to enable Greater Manchester to become carbon neutral by 2038.
The Council’s lead for green city-region and waste, Cllr Martyn Cox, said “A key part of this is lessening how reliant our homes are on high carbon fuel and making them more energy efficient.
“However, it’s crucial that as we become greener, we become fairer, so people are not left behind. That means making sure people are less reliant on carbon-intensive energy at home, whilst reducing their energy bills.”