Barclays launches reward scheme for green home improvements

Barclays is piloting a new reward scheme for homeowners who are keen to make green improvements to their home but are deterred by the costs.

Its residential mortgage customers can receive up to £2,000 under the Barclays’ Greener Home Reward Initiative once they’ve carried out a qualifying home energy efficiency improvement – such as the installation of solar panels or a heat pump.

Customers are not required to take out additional lending in order to apply.

It comes as research by Barclays found three quarters  of homeowners intend to make energy-efficient changes to their homes but around the same figure report being unable to afford energy-efficient upgrades.

Separate analysis by agents including Savills has suggested buyers are willing to pay a premium for more energy efficient homes.

Barclays customers can choose to install any one of several home improvements including an air-source heat pump, double or triple-glazed windows, solar panels, or home insulation. 

The chosen home improvement must be completed by a TrustMark-registered business or tradesperson 

C.S. Venkatakrishnan, group chief executive of Barclays Bank, said: “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.

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

Barclays is also introducing a new Sustainability Hub for its retail customers that will focus on educational content relating to ‘Greener Homes’ and ‘Greener Travel’. 

Barclays behavioural economist Dr Pete Brooks added: “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. 

“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.

“To overcome this, our latest initiative helps provide a more immediate reward to our residential mortgage customers to help with the cost of making energy efficiency-related home improvements. Couple this with providing helpful information to consumers to help them make informed choices and we hope to encourage more people to overcome their human biases.”