Lenders will be able to draw on a fund of up to £20m to develop products that provide homeowners with “upfront and affordable capital” to make their homes greener and cheaper to run, says the government.  

The new fund is designed to accelerate plans “to scale up the green finance market” and provide households with more options to retrofit their homes, according to the Department for Business, Energy & Industrial Strategy.  

It says the cash funding will be used to support banks, building societies and other providers to develop, test, and pilot innovative green finance products through the Green Home Finance Accelerator scheme.  

The move is part of the government’s wider effort by 2035 to get as many homes as possible to an energy performance certificate band C level, which is rated as an adequate standard.  

The department says 20% of emissions come from buildings and nearly two-thirds of owner-occupied homes are below energy performance certificate C, with the average owner-occupied home rated at band D.  

Minister for business, energy and corporate responsibility Lord Callanan says: “Green finance products will allow households with greater means to spread costs over time, empowering them to be able to invest in their properties, improving their energy efficiency and resale value.  

“Today’s funding will give more companies in the financial sector the opportunity to create and offer these products, and in so doing help households reap the benefits both in the investment to their properties, and in the savings they can make on their energy bills.”  

The government adds that its £12bn Help to Heat schemes includes the £450m Boiler Upgrade Scheme, which opened to voucher applications in May.