Barclays offers to help homeowners go green

Barclays will start paying up to £2,000 to its mortgage holders to help them ‘green’ their home as three in four say they cannot afford the changes they want to make within the next five years.

The bank said it would run a trial to pay back customers who install new insulation, heat pumps or solar panels, among other solutions.

It said that most of the homeowners it surveyed wanted to improve the energy efficiency of their homes.

But most are only making small-scale improvements which do not cost much up front.

PILOT PROGRAMME

This can include changing old light bulbs for more energy efficient versions – something which has only a small impact on a home’s carbon emissions.

“There is a clear need to improve the energy efficiency of UK housing, but as our data indicates, cost remains a barrier to turning desire into action,” said Barclays chief executive CS Venkatakrishnan.

“We hope this pilot will go some way towards encouraging consumers to make energy efficiency-related home improvements.”

TRUSTMARK

The work will have to be performed by a TrustMarkregistered business or tradesperson.

TrustMark is a government-backed scheme. Barclays said it would use the data it collects during the pilot project to help roll out wider home improvement support measures in the future.

Its initial research found the best way to drive more energy efficiency improvements in people’s homes was simply to give them cash to do so.

COST CONCERNS

The bank said cost was the main thing holding back 73% of homeowners from retrofitting their houses, while 56% do not have enough cash up front at all. Around a quarter of people said the payback period on the investment puts them off spending the cash up front.

PAYOFF DELAY

Dr Pete Brooks, a behavioural economist at Barclays, said people liked to see results straight away.

“When weighing up the costs and benefits of retrofitting, a behavioural bias called ‘hyperbolic discounting’ often comes into play, which in essence means that we tend to prefer smaller, immediate rewards over larger payoffs further down the line, he said.

“With the expected payback period for some home improvements clocking in at over a decade, these larger options may be overlooked.

“Even if the long-term benefits might be greater, the end result is often inaction.”

UP TO £2,000

The full £2,000 will be available for homes installing heat pumps, while those opting for solid wall insulation or solar panels will be able to get £1,000, and a smaller £500 payment will be available for loft insulation or new windows, among other initiatives.

“Clear need to improve energy efficiency

INCENTIVE: Barclays is offering to pay up to £2,000 towards work to improve energy efficiency, which could include installing a heat pump, insulation or solar panels. Meanwhile, owners can switch to low energy bulbs.