Bank lends its support to renewable energy industry
D
espite an initial slowdown, after
the latest Feed-in Tariff cuts,
the domestic renewable energy
sector is picking up momentum
again. Government figures for January 2016
show 18,772 solar PV installations, compared
to a figure of 8,527 during the same period last
year. The sector is maturing, stabilising and
showing sustainable growth, so why have so
many lenders left this space?
Domestic purchasers often look to obtain
finance to spread the cost of their investment in
renewable energy products over a term that suits
their budget. Being able to offer a loan through
a third-party lender gives retailers a safe and
secure financing option that helps ensure they
maximise sales conversion. Industry growth
is strong and there is a clear market need for
consumer finance. So why are lenders reticent?
Paul O’Leary, Partner Director, Ikano
Bank, states: “We feel that many lenders have
a distorted view of the renewable energy
sector, and the risks associated with it. With
an emphasis on lenders taking equal liability
for responsible sales practices, many have
chosen to exit the market rather than nurture
and educate an industry that already exhibits
excellent selling behaviours.”
Paul Wingfield, Communications Manager,
The Home Insulation & Energy Systems
Contractors Scheme (HIES), explains: “It’s clear
that the domestic renewable energy sector
is experiencing a period of change driven in
no small amount by the latest drop to Feed-in
Tariffs. We have been working with lenders
such as Ikano to re-evaluate their relationship
with the market place, understanding that they
share equal responsibility in ensuring ethical
and honest sales practices and nurturing high
industry standards. We’re confident if ethical
and responsible traders can continue to access
high-quality finance that consumers will
continue to invest in renewable products.”
Ikano has been working closely with HIES
over the past year to ensure that it can effectively
and sustainably service the renewable energy
sector. Having developed a method of robust
vetting, training and compliance support, the
bank has ensured that it can manage risk whilst
servicing a wide portfolio of respected retailers.
The consumer receives the finance that they
need, as well as the peace of mind that they are
dealing with a reputable and trusted retailer.
“We’re proud to be the industry leader
in lending to the customers of renewable
energy retailers,” O’Leary says. “The renewable
industry is arguably one of the most important
sectors required to underpin economic growth
and sustainability in the UK. No longer are
domestic renewable energy investments seen
as a quick way to make money; instead they are
viewed as