What is the Green Home Finance Accelerator (GHFA) programme? The Green Home Finance Accelerator is a £20m innovation programme to support the development of innovative green finance products and services, enabling homeowners to decarbonise their homes and improve thermal comfort.
When will the competition be launched? The competition is expected to launch in early Autumn 2022.
How can I find out further information about the GHFA programme and the competition? Latest information will be available on the programme website. Please also check out the recording of a market engagement event held in July.
How do I register my interest, and keep up to date on the latest information on the competition? To keep up to date on the latest programme information, please register your interest by emailing us at email@example.com.
Who can I contact for further information? Please direct your queries to firstname.lastname@example.org
Where can I find the contact list of other interested stakeholders? A contact list has been circulated to those who have granted us permission to do so. If you would like to receive the contact list, please grant us permission to share your details (name, organisation and organisation type) by emailing us at email@example.com.
When will competition eligibility for grant funding criteria be confirmed? Eligibility criteria will be confirmed upon publication of competition guidance documentation in early Autumn 2022. Eligibility criteria information contained within these FAQs is indicative and subject to change.
What type of organisation can be the project lead? It is anticipated that there will be no restrictions concerning what type of organisation can lead a project, so long as the project will result in a viable proposal for the pilot of a green finance product.
Projects can be delivered by sole organisations or by consortia. For consortia, there should only be one lead organisation assigned to a project proposal. Grant Offer Letters for successful applicants will be made out to the delegated lead company and as such BEIS is only responsible for making claim payments to the delegated project lead. Payments to any collaboration partners or sub-contractors shall be the responsibility of the lead organisation.
We are not a finance lender, does this mean we can only join as part of a consortium, with the project lead a finance organisation? We do not anticipate setting any specific restrictions concerning what type of organisations can lead projects or can be included within project consortia, so long as the project can demonstrate it will lead to a viable proposal for the pilot of a green finance product.
Should a project not include a finance provider at the initial Discovery Phase, we would expect applicants to set out how they intend to recruit a suitable finance partner or partners during the Discovery phase to enable a green finance product to be successfully delivered during the Pilot Phase.
Our organisation is based outside the UK - are we eligible to apply? Projects must be delivered by UK-based organisations. UK-based is defined as an organisation must have an establishment or subsidiary registered in the UK.
Furthermore, over 50% of the project’s activities (as measured by total eligible project costs) must be conducted within the UK and any product pilot activities must take place in the UK with UK consumers.
Can banks who operate in non-regulated buy-to-let lending take part? Yes - we are keen to receive proposals for products which can support Private Rented Sector landlords to meet or exceed minimum energy efficiency standards, and proposals from lenders who are involved in non-regulated buy-to-let lending.
Can we include research organisations in the development of a proposed green finance product? Yes. We anticipate that research organisations could potentially be involved in the research and development of green finance products, and as such, could be included within project consortia. However, given that funded projects must lead to a viable proposal for the pilot of a green finance product, we would not expect research organisations to be sole applicants.
How do you define “able to pay”? Broadly speaking, we are defining “able to pay” as any household (owner occupier or privately rented) which is not in fuel poverty, and which is not eligible for any government fuel poverty related grants or other support (such as ECO or Home Upgrade Grant funding).
Will grant recipients be required to provide match funding? Yes. In line with subsidy control principles, only a portion of the total eligible project costs can be funded by BEIS grant funding and applicants will need to have private funding in place to cover the balance of the eligible costs.
Will the project lead need to be Financial Conduct Authority (FCA) certified? The project lead does not need to be FCA certified, however, project proposals must demonstrate they have a robust plan in place for acquiring (any necessary) FCA approvals in advance of the Pilot Phase. Deliverability will be a key part of the assessment criteria against which funding award decisions will be made.
What do you class as a product? Any novel green lending product that will allow homeowners (owner occupiers and/or private landlords) to invest in energy efficiency or low-carbon heating retrofit. We are keen to attract proposals for a range of finance product types (not just mortgage-based finance); the programme is about delivering outcomes to cross market audiences.
Will you consider asset finance-based propositions as opposed to green finance lending as part of the competition scope? Yes - we are interested in any products that would facilitate investment by owner occupiers and private landlords in their properties and the scope includes more than traditional loan-based products.
Can the maximum £2m grant for the Pilot Phase be used to cover platform development for a new start up in Fintech? Yes – it is anticipated this would be an eligible use of grant funding, so long as the funded activities are project specific, and clearly demonstrate that they will lead to a viable proposal for the piloting of a green finance product.
All funded activities must also fall within one or other of the following types of innovation activity: Industrial Research or Experimental Development.
What type of innovation activity is allowed? These innovation projects must be carrying out Industrial Research or Experimental Development, as defined below:
Industrial Research involves the planned research or critical investigation aimed at the acquisition of new knowledge and skills for developing new products, processes or services or for bringing about a significant improvement in existing products, processes or services.
It can include the creation of components parts of complex systems and may include the construction of prototypes in a laboratory environment or in an environment with simulated interfaces to existing systems as well as of pilot lines, when necessary for the industrial research and notably for generic technology validation.
Experimental Development involves acquiring, combining, shaping and using existing scientific, technological, business and other relevant knowledge and skills with the aim of developing new or improved products, processes or services.
This may also include, for example, activities aiming at the conceptual definition, planning and documentation of new products, processes or services.
Experimental development may comprise prototyping, demonstrating, piloting, testing and validation of new or improved products, processes or services in environments representative of real-life operating conditions where the primary objective is to make further technical improvements on products, processes or services that are not substantially set. This may include the development of a commercially usable prototype or pilot which is necessarily the final commercial product, and which is too expensive to produce for it to be used only for demonstration and validation purposes.
Experimental development does not include routine or periodic changes made to existing products, production lines, manufacturing processes, services and other operations in progress, even if those changes may represent improvements.
Activities undertaken may include prototyping, demonstrating, piloting, testing and validation of new or improved products, processes or services in environments representative of real-life operating conditions where the primary objective is to make further technical improvements on products, processes or services that are not substantially set. This may include the development of a commercially usable prototype or pilot which is not necessarily the final commercial product and which is too expensive to produce for it to be used only for demonstration and validation purposes.
Can any of the £2m grant for the Pilot phase be used for underwriting the capital that would need to be accessed, or is it only for revenue costs for the project partners? Grant funding will be awarded to support industrial research and experimental development innovation activities only. Any form of capital underwriting or financing of energy measures will not be considered an eligible use of grant funding.
Will this grant cover both secured and unsecured innovations for green financing? Yes, the competition is keen to receive proposals for both unsecured and secured green finance products.
Will the SAP band or EPC data be a reporting metric? How is this impacted by the current restrictions around EPC data sharing? Projects may be asked to suggest relevant and appropriate reporting mechanisms within their project outputs, however, no decisions have been taken yet on future reporting metrics. Any decisions around this will be communicated in due course on a project-by-project basis.
Fabric first and retrofit are obviously key, but does this mean using the PAS 2035 process or using an EPC only? It will be the responsibility of the lender/applicant to decide how rigorous they want their minimum quality assurance process to be. We would however expect that each project will have a quality assurance process in place which provides reasonable assurance that the consumer finance has been used for the intended purposes, and that retrofit measures have been installed to an agreed/expected standard.
Would you consider proposals (e.g., around Property Linked Finance) that would require changes to legislation to be successful? Proposals should be for products that will be ready to pilot from summer 2023. If there is no credible proposal for piloting which aligns with current legislation, then the proposal would not be acceptable. However, projects may explore how the product could operate in an alternative legislative context as part of the Discovery Phase. For example, a proposal around Property Linked Finance could use the Green Deal Mechanism – which is already in place – but also explore how the product could be adapted with new legislation in future.
You mention that applicants should propose installation verification methodologies as part of the competition scope. Are these methodologies expected to be used to verify the emission savings from measures being installed? Proposals are expected to include a methodology for verifying that customers have used the green finance funding for its intended purpose, and that the energy efficiency and/or low carbon heating measures installed have been done so to a satisfactory technical standard. Verification methodologies could include, but are not necessarily limited to, measurement of emissions savings from installed retrofit measures.
Proposed verification methodologies should be clear, measurable, and consumer friendly, however, we are not intending to prescribe specific verification approaches.
Green Home Finance Innovation Fund (GHFIF)
What was the GHFIF? The Green Home Finance Innovation Fund (GHFIF) was a previous BEIS innovation competition which launched in 2019. The aim of the GHFIF was to promote the establishment of green mortgage products for homeowner occupiers for energy performance improvements. To overcome the barrier to innovation posed by high initial development costs in an untapped green finance market, the programme provided funding for the initial development and piloting of a limited number of green mortgage products and related services.
How is the GHFA different from the GHFIF? The GHFA builds on the work of the GHFIF to stimulate innovation in the green home finance market yet with a stronger focus on attracting a diverse range of products above and beyond just green mortgage products, and ones which appeal to a broader range of able-to-pay homeowners.
Where can I find further information about the GHFIF? Please see the GHFIF website for the latest information, reports and learning from the GHFIF programme.
The Green Home Finance Accelerator is being supported by PwC and the Carbon Trust.