Building Energy Retrofit

Finance and Funding


What is whole house retrofit?

Deep retrofit of three homes saves around one ton of CO2 a year.
30 mln UK homes could save 10 mln ton of CO2 a year.

Deep retrofit takes a holistic approach, aiming to improve the building fabric (walls, windows, floors and roofs), the heating system and to install renewable energy where possible (heat pumps and solar panels). Such approach needs an innovative funding mechanism that Renew Finance has created and offers below.

Retrofit Works

Renew Finance is an Advocate Member of the Whole-House Retrofit cooperative RetrofitWorks and supports retrofit activity in Cambridgeshire. RetrofitWorks offers its services at the lowest possible cost.


Sources of funding and finance for retrofit

With over 25 years’ and over £1bn assets under management, Renew Finance works to unlock low-cost finance for building energy retrofit. We have strong relationships with providers that specifically finance energy retrofit.  FCA authorised credit brokers and investment managers we guarantee the lowest cost of capital.


Retrofit Investment Fund

To enhance private investment in domestic retrofit, Renew Finance established the Retrofit Investment Fund.


Types of finance: 
  • Grants
  • Debt Capital
  • Investor Funding
  • Exit


There are tens of government environmental programme that provides financial incentives, including:
  • Domestic and Non-Domestic Renewable Heat Incentive (RHI)
  • Feed-in Tariffs (FIT)
  • Renewables Obligation (RO)
  • Renewable Energy Guarantees of Origin (REGO)
  • Smart Export Guarantee (SEG)
  • Non Fossil Fuel Obligation (NFFO) / Scottish Renewable Obligation (SRO)
  • Energy Company Obligation (ECO)
  • Warm Home Discount (WHD), to name a few.


You can benefit from programs if you meet certain requirements, for example:
  • Your refurbishment will deliver in the region of 20% energy saving / carbon benefits
  • You are undertaking a refurbishment / retrofit project in a public sector building
  • Your funding requirement is between £3m and £20m.
  • Sustainable residential, including single and multi-family buildings and social housing.

To help you find which opportunity and retrofit route is best for you, we update our database on a regular basis to monitor ongoing, new and expired sources of funding.

Please find below some examples of funding opportunities as of 1 April 2021: 


  • Feed-in Tariffs (FIT) scheme
  • ELENA – European Local Energy Assistance


  • Smart Energy GB
  • Interreg Urbact


  • LIFE programme
  • Horizon 2020
  • Coronavirus Loan Schemes


Loans or Debt Capital a is tax-deductible and the interest must be paid regardless of business revenue.


Light & Heavy Refurbishment and Retrofit Loans

We have lenders on our panel who have a very strong interest in community projects or eco-friendly developments and energy retrofitting.


Bridging Finance

If you require a refurbishment loan for a short period of time or need to release funds quickly in order to complete a project, bridging finance may be an option for you.


Refurb-to-Term Loans for Investment Properties

They combine all the speed and flexibility of bridging finance with the traditional buy-to-let mortgage.


There are three basic types of investor funding:

  • loans,
  • equity, and
  • convertible debt.


Corporate bonds

Institutional investors normally invest in large offerings (£100 million +). Good for established companies as a lighter alternative to bank debt.


ORB LSE listed bonds

The Order Book for Retail Bonds is generally for those seeking £25-£100 million of medium-term funding.



RCB (Retail Charity Bonds) enable charitable organisations to raise a secured or unsecured loan of £10 million or more on the London Stock Exchange. Loan finance can enable them to expand their activities.


Community Bonds

To raise funds of £1 million or more from your own supporter network.



Equity Capital is generated by the sale of stock. The main benefit of equity financing is that funds need not be repaid. The cost of equity is higher, and is more suited to businesses that are looking to grow.

Common equity finance:

  • crowd-investing from large groups of people, generally through an online platform
  • angels as accredited and experienced investors who provide financing and mentoring to start-ups
  • venture capital invests below $10 million and mostly deals with startups in bio -and clean technology
  • private equity firms invest $100 million and up and buy 100% ownership in mature companies
  • IPO


Private debt placements

A way to raise debt finance of £15 million or more directly with a single or small number of investors.


Bi-lateral private placements

Negotiated directly between a lender and a housing association. Minimum £10m, typically for 25 to 40 years.


Pool deals

Housing associations seeking to borrow less than £10m often find their choices very limited. Renew Finance offers private placements where three or more housing associations pool their assets together to raise a critical mass of funds in excess of £20m


Sale and leaseback

The housing association sells properties to a fund, which then leases them back to the housing association for a specified period (typically 25 to 45 years). The fund retains ownership of the properties when the lease expires


Lease and leaseback

Alternatively, the housing association sells properties on a long lease to a fund, which then leases them back to the housing association on a shorter lease. The housing association can buy back the properties when the lease expires.

Exit strategy

To find the right mix of debt and equity financing you better need the experienced and UK certified investment manager like we are. We will help youto increase your business value. This could eventually lead you to an exit idea and we will be happy to assist you till the very end of your business journey.

Social homes are provided by housing associations or local councils that own, let, and manage rented housing.

Homes England welcomes new partners – developers, for-profit providers, community-led organisations and others who have an ambition to develop affordable homes. Please check the Capital Funding Guide for more information

Retrofit in the social housing sector gets funding in the form of direct government grants or through energy supplier obligations such as the Energy Company Obligation (ECO).

ECO funding for social housing

Two of ECO’s three funding streams are available for social housing:

  1. Carbon Emissions Reduction Obligation (CERO) – this funding prioritises solid and cavity wall insulation, loft insulation and district heating.
  2. Carbon Saving Community Obligation (CSCO) – this funding is targeted at insulation measures and connections to district heating systems in low income and rural areas.

Visit the Ofgem website for the ECO toolkit which includes the full list of ECO measures here.

The private rented sector has the largest proportion of distressed and energy inefficient homes.

Half of households living in such properties are in fuel poverty. Each 1 from 20 homes or about 1 million households in England have the bottom bandings F or G and do not meet requirements to be let. The new regulations will raise the standard further to a ‘D’ rating by 2025 and a ‘C’ by 2030.

Domestic retrofit programs are very costly and there is a big gap between demand and available public funds. As might be expected, private funding in retrofit is four times the level of public funding. The government encourages the ‘able to pay’ households to invest more in retrofitting. It is likely to prove a difficult task and Renew Finance is here to help with our Retrofit Investment Fund initiative.

For more information and guidance on retrofit financing or any other type of commercial finance please submit an enquiry from our contact form or call 0333 444 0963.