How To Offer Finance For Home Energy Upgrades

Customer finance for energy upgrades: what it really means

Offering finance means giving your customer a way to spread the cost of a home energy upgrade, while you get paid for the job without waiting months for savings to “pay back”. In practice, you present a monthly payment option alongside the cash price, then a regulated lender funds the purchase once the customer is approved. For businesses selling heat pumps, solar, insulation or EV chargers, this turns a high-ticket decision into a manageable commitment, particularly as green lending has moved firmly into the mainstream, with a growing range of UK loan products designed specifically for energy-efficiency measures.

If the upgrade lowers bills, customers often judge affordability by monthly cost, not the headline price.

Why customers choose finance in this market

Home energy upgrades are often motivated by rising running costs, comfort, and resilience, not just “going green”. But even with 0% VAT on many qualifying measures and a wide landscape of grants and support, households can still face a meaningful gap between what they want to install and what they can pay upfront. At the same time, large lenders have increased their focus on energy improvements, including interest-free or preferential borrowing routes for eligible customers and mortgage-linked options that reward better EPC outcomes. The result is a customer who is increasingly primed to ask one question at the point of sale: “What will it cost me per month?”

How finance can lift conversion rates and average order values

When you offer finance, you reduce friction at the point where many quotes stall: the jump from intention to action. Instead of delaying until savings build up, customers can proceed while VAT relief and seasonal install capacity are in their favour. Finance can also increase average order value, because customers are more likely to bundle measures (for example, solar plus battery, or insulation plus a heat pump) when the total is expressed as a monthly figure. And because green finance options have expanded rapidly across high-street banks, building societies, specialist lenders and local schemes, customers increasingly see finance as normal rather than niche.

Standout takeaway: present “cash price” and “monthly cost” together, every time.

Typical transaction values in home energy upgrades

What you can put on finance

1. Air source heat pumps (including commissioning and controls)

2. Solar PV systems

3. Battery storage

4. Insulation (loft, cavity, solid wall where applicable)

5. Heating controls and smart thermostats

6. Radiator and pipework upgrades linked to heat pump installs

7. EV home charger supply and installation

8. Servicing plans and extended warranties (where suitable)

FCA and compliance: the essentials

If you introduce customers to regulated credit, FCA rules apply. Your business must be appropriately authorised or act as an appointed representative, and promotions must be clear, fair and not misleading. That means presenting representative examples correctly, avoiding pressure selling, and ensuring customers understand key terms such as APR, total amount payable, and what happens if they miss payments. You should also handle personal data carefully, keep records of finance communications, and follow the lender’s processes for eligibility and affordability checks.

How introducer and broker-led models operate

Most installers and retailers do not fund loans themselves. Instead, you act as an introducer: you present finance as an option, capture the right details, then the broker and lender handle application, underwriting and payout. A broker model can be particularly helpful in a market where customers may have multiple routes available, such as unsecured green loans, specialist energy-efficiency products, local council-delivered schemes, or mortgage-related additional borrowing for eligible homeowners. The goal is to match the customer to a suitable product without you becoming the lender. Done well, it protects the customer, supports your sales team with training and compliant materials, and gives you a reliable process from quote to completion.

A clear customer journey (step by step)

1. Quote the project properly: itemise the scope (equipment, install, upgrades, warranties) and show the total price including VAT treatment where relevant.

2. Offer two prices upfront: show the cash price and an indicative monthly cost, so the customer can compare like-for-like.

3. Explain what affects approval: highlight that lending is subject to status, with affordability and credit checks completed by the lender.

4. Customer starts the application: collect the required consent and details, then pass the customer into the broker-led application flow.

5. Lender decision and agreement: the customer reviews the pre-contract information and e-signs the credit agreement.

6. Confirm installation dates: schedule work once approval is in place and any deposit requirements are clear.

7. Complete installation and sign-off: ensure the customer confirms delivery and completion promptly to avoid payout delays.

8. Payout and aftercare: funds are released in line with the lender process, and you maintain service standards to minimise disputes.

Getting live with Kandoo

Kandoo is a UK-based retail finance broker, so our role is to help you offer finance in a way that supports conversions while staying within the rules. We’ll start by understanding what you sell, your typical job values, and how your customers decide. From there, we help you shape a finance offer that fits the buying journey, including how you present monthly payments, how you handle customer handover, and what your team can and cannot say. Because green home lending has broadened across mainstream and specialist providers, a broker-led approach can also help you navigate different customer needs, from straightforward unsecured borrowing to customers who may explore mortgage-linked routes for larger multi-measure projects.

Next steps you can take this week

• Audit your last 20 quotes and identify where the decision stalled on price

• Add a “monthly cost from” line to your quote template (with the right compliance wording)

• Train your team on three concepts: APR, total amount payable, and eligibility being subject to status

• Decide where finance is introduced: first call, survey visit, or quote presentation

FAQs

What’s the difference between a green loan and a standard personal loan?

A green loan is designed for specific energy-efficiency purposes such as solar, insulation, heat pumps and EV charging, and may be priced or structured to encourage uptake. Standard personal loans are general-purpose and may not be tailored to upgrade projects.

Do customers always need unsecured finance?

No. Some customers may use savings, grants, or local support schemes. Others may explore mortgage-related additional borrowing or remortgaging for larger packages, where rates can be lower but terms and eligibility differ.

Can finance be used alongside grants and incentives?

Often, yes. Many households use grants or support to reduce the upfront cost, then use finance to cover any remaining balance or to add measures that are not fully funded.

Is 0% finance available for home energy upgrades?

Some lenders have offered interest-free borrowing routes to eligible customers for energy improvements. Availability depends on the customer’s circumstances and the lender’s criteria, so it should be presented as subject to status and specific product terms.

What do I need to show on my website or in adverts?

You must ensure finance promotions are clear, fair and not misleading. Where required, include representative examples, key terms such as APR and total amount payable, and the appropriate “subject to status” messaging, following the lender or broker guidance.

Will offering finance slow down my sales process?

A well-designed process typically speeds decisions up, because the customer can assess affordability immediately. The key is to introduce finance early, keep the application flow simple, and align install scheduling with approval and payout steps.

Do I need FCA authorisation?

If you introduce customers to regulated credit, you will need the correct permissions or an appropriate arrangement (for example, operating under a compliant structure). Kandoo can help you understand the route that fits your business model.

How should my team explain APR without overcomplicating it?

Keep it practical: APR helps customers compare the cost of borrowing across products, but what they will feel month to month is the payment amount and the total amount repayable over the term. Your job is to present it clearly and consistently, without giving personal financial advice.