How To Offer Finance For Energy Efficiency Improvements

Customer finance, explained for energy efficiency firms

Customer finance lets your customers spread the cost of energy efficiency improvements over time, while you get paid promptly for the work you deliver. For installers and retailers, it turns a large, sometimes uncertain outlay into a manageable monthly payment that customers can compare with expected bill savings and comfort benefits. It also creates a clearer way to discuss “total project cost” when grants reduce the headline price but rarely remove it altogether. In today’s market, where unsecured green home loans have moved into the mainstream and demand for measures like heat pumps, solar and insulation has grown sharply, finance is increasingly part of the buying decision rather than an afterthought.

Standout point: If customers can understand the monthly cost, they are far more likely to commit to the full scope of works.

Why homeowners look for finance in this market

Energy upgrades are typically motivated by a mix of rising running costs, the desire for warmer homes, and the push towards low-carbon heating. Even when government schemes contribute, customers still face deposits, specification upgrades, or measures that fall outside eligibility rules. For example, in England and Wales the Boiler Upgrade Scheme can contribute up to £7,500 towards an air or ground source heat pump, yet the remaining balance can still be substantial. Meanwhile, programmes such as Help to Heat, ECO and regional grants can fund insulation and whole-house approaches for eligible households, but many owners either do not qualify or need a “top-up” to complete the project. Finance fills that gap and gives customers a way to act now rather than delay another winter.

The commercial upside of offering finance

Offering finance can increase sales by reducing price friction at the point of decision. Instead of a customer weighing a five-figure quote against competing household priorities, you can present a choice of monthly payments and terms that fit their budget. That shift often improves conversion rates, increases average order value (because customers opt for a more complete package), and reduces cancellations caused by last-minute funding issues. It can also strengthen lead quality: customers who engage with finance options are typically closer to purchase and clearer on affordability. Done properly, finance supports a more consultative sales conversation, centred on outcomes like comfort and long-term savings, rather than a single upfront figure.

Typical transaction values (guide)

What customers can finance in practice

1. Air source and ground source heat pumps (including cylinders, controls and installation)

2. Solar PV systems and associated electrical works

3. Home battery storage and smart energy management controls

4. Insulation packages (loft, cavity, solid wall, underfloor) and ventilation improvements

5. High-performance windows and doors

6. Heating controls, zoning, smart thermostats, and system upgrades

7. Hybrid heating solutions where appropriate

8. Related enabling works that are part of the overall upgrade scope

FCA and compliance essentials to get right

Because you are introducing customers to finance, compliance matters as much as conversion. Financial promotions must be clear, fair and not misleading, with representative examples shown where required and key risks explained in plain English. Customers should understand that finance is subject to status, affordability checks, and lender approval, and that terms, interest and total payable can vary. Your sales process should avoid pressure, keep records of what was presented, and ensure staff know where to direct customers for finance-specific questions.

Introducer and broker models: how they fit together

Most energy efficiency firms do not want to become lenders, and they do not need to. In an introducer model, you introduce the customer to a broker or lender and stay focused on surveying, quoting and delivering the installation. The broker supports the customer with lender options and applications, and you receive payment for the work in line with the agreed process once finance is in place. This structure is particularly useful when projects combine multiple measures and grant contributions, because the finance element can be aligned with the customer’s net cost after any support. It also helps you maintain a clean separation between “advice on the installation” and “arranging finance”, keeping your customer experience straightforward and professional.

Short, standout line: Keep the sales conversation about outcomes, and let the finance process do the heavy lifting.

A clear customer journey (step by step)

1. Initial enquiry and needs check: confirm property type, goals (comfort, bills, low-carbon), and desired timescales.

2. Indicative budget discussion: share a range and introduce monthly payment examples as an option, not a push.

3. Survey and specification: finalise measures, including any enabling works.

4. Grant and eligibility signposting: highlight relevant schemes such as Help to Heat routes, ECO-style support, devolved schemes in Scotland, and the Boiler Upgrade Scheme where applicable.

5. Final quote and net-cost clarity: present the total project cost, likely grant contribution (if applicable), and the customer’s remaining balance.

6. Finance application: customer completes an application via the finance partner, with identity and affordability checks as required.

7. Approval and agreement: customer reviews and accepts the finance agreement and key terms.

8. Scheduling and installation: book the job with confidence that funding is in place.

9. Completion and handover: provide commissioning, documentation and aftercare information.

10. Ongoing support: handle warranty and servicing queries, and keep communications consistent with customer expectations.

Practical next steps you can implement this week

• Add “pay monthly” messaging to your quote templates and proposal emails.

• Train your team to explain APR, term length, and total payable in everyday language.

• Create a simple “grant plus finance” explainer so customers understand their net cost.

• Track the uplift in conversion rate and average order value once finance is live.

Getting started with Kandoo

Getting started is about building a finance offer that suits your typical job size, customer profile and sales process. Kandoo can support you as a UK-based retail finance broker by helping you present finance clearly, route customers through an application journey that fits your brand experience, and align the process with the realities of energy efficiency projects where grants may reduce but rarely eliminate the customer’s bill. Once set up, your team can introduce finance early in the conversation, keep quotes focused on outcomes and performance, and rely on a consistent process that supports both customer confidence and business cashflow.

FAQs

What types of finance are commonly used for energy efficiency work?

Most customers use unsecured fixed-sum loans for home improvements, designed to spread the cost over a set term with predictable monthly repayments.

Can customers combine grants with finance?

Yes. Many customers use grants to reduce the overall cost and finance the remaining balance, particularly when a scheme contribution does not cover the full scope of works.

Does the Boiler Upgrade Scheme cover the full cost of a heat pump?

Typically no. In England and Wales, the scheme can contribute up to £7,500 towards an air or ground source heat pump, so customers often fund the remainder via savings or finance.

What should we say about APR?

APR helps customers compare the cost of borrowing. The key is to explain the monthly repayment, total amount repayable, and that rates and acceptance depend on lender checks.

Are green loans a niche product in the UK?

Not any more. Unsecured green home loans have grown rapidly in recent years as demand for measures like insulation, solar and heat pumps has increased.

Do we need FCA authorisation to offer finance?

It depends on what you do and how you do it. If you are introducing customers to a finance provider, you must ensure the process and promotions are compliant. Kandoo can help you structure this appropriately.

Will offering finance slow down the sales process?

When the journey is designed well, it can speed decisions up by removing uncertainty. The customer can confirm affordability immediately rather than delaying to source funds.

How do we present finance without sounding pushy?

Position it as a choice: “pay upfront or spread the cost”. Tie it to customer outcomes, and let the customer decide whether monthly payments suit their budget.

Can finance increase our average order value?

Often, yes. Customers are more likely to choose a fuller package, such as solar plus battery, or insulation plus heating controls, when the cost is presented monthly.

What should we measure after launching finance?

Track conversion rate, average order value, cancellation rate, and the percentage of customers who choose finance. Compare performance by channel and by product type.