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Models of public/private finance for the “able-to-pay” retrofit market

photograph of solar panels on house roofs

Project Summary

The Net Zero Hub collaborated on this early-stage scoping study with Lendology CIC, Bath & North East Somerset Council and Sedgemoor District Council to explore the possibility of expanding the size of current funds available to lend to the Able-to-Pay (ATP) retrofit market through a partnership between public and private sector finance.


Lendology is a social enterprise lender providing home improvement loans to homeowners, including ATP retrofit customers.

The study explored the possibility of expanding the size of current funds managed by Lendology from approximately £9 million to £100 million through joint local authority/private finance for ATP customers. Current or proposed models in the market, and similar markets, were investigated and a detailed summary of the legal, financial and governance elements that would be required for this project to be viable was delivered.

Our Role

The Hub undertook background research into the current financial markets seeking evidence and knowledge in an effort to understand the sector and the likelihood of this proposal being valid. The Hub designed and managed the procurement process and project managed the research.


The modelling carried out by the project was limited to 21 local authorities in the South West region that currently support Lendology.

Financing and ownership

The fund proposed in the early–stage scoping project would be a partnership between local authority/public sector finance and the private sector with a £15 million/£85 million split respectively.


Nationally housing accounts for 35% of all the energy in the UK and emits 20% of the carbon dioxide emissions. The project has provisionally modelled significant economic benefit and value at this stage including:

  • A total saving in household energy bills of around £70 million is estimated over 10 years
  • Carbon savings estimated to be in the region of 450,000 tCO2 over 10 years
  • Positive impact on employment levels in terms of jobs created in the installation of retrofit measures financed by the Loan Fund over 10 years

This project highlights the potential of increasing the amount of affordable finance available to help a significant proportion of homes to reduce their energy usage, and that significant public sector support is required to stimulate the market.