Hometree, a fast-growing residential energy services company, has strengthened its financial resources with a new £50 million mezzanine facility from CPP Investments, adding to the £250 million senior asset-backed debt facility it raised earlier this year from Barclays. This latest capital infusion, backed by CPPIB Credit Investments Inc., a subsidiary of the Canada Pension Plan Investment Board (CPP Investments), will be used to finance renewable energy systems such as solar panels, batteries, and heat pumps across 35,000 homes in the UK over the next two years.

The funding will contribute to Hometree’s larger mission of decarbonizing over one million homes by 2030, supporting the transition toward sustainable energy. The company is positioning itself as a leader in Europe’s residential energy market by offering a combination of hardware installation, financing, repairs, and ongoing maintenance through an integrated platform.

Expanding Renewable Energy for Homes

Hometree’s latest funding round is part of its broader ambition to make renewable energy accessible to homeowners across the UK. As energy prices continue to rise, exacerbated by regulatory decisions such as Ofgem’s recent energy price cap increase, many households are looking for ways to offset escalating costs through renewable energy solutions.

The demand for solar panels and other green technologies has surged. In 2023 alone, over 180,000 solar panel installations were completed in the UK. At the same time, applications for the government’s Boiler Upgrade Scheme—which incentivizes a switch from traditional gas heating to low-carbon alternatives—have more than doubled.

However, the high upfront costs associated with these technologies, which can range from £13,600 to £31,500, remain a barrier for many homeowners. This financial obstacle has hindered a more widespread adoption of renewable energy, slowing progress toward the country’s net-zero goals. To address this challenge, Hometree is stepping in with innovative financing solutions that make renewable energy affordable for ordinary households.

Collaboration with Industry Leaders

Since securing the Barclays debt facility earlier this year, Hometree has forged partnerships with leading players in the renewable energy sector. The company has teamed up with top installers, energy suppliers, and manufacturers, creating an extensive network that helps expand its financing offerings to a broader customer base.

Notably, Hometree has entered into agreements with Project Solar, the UK’s largest solar panel installer, as well as So Energy, a prominent energy supplier, and myenergi, a supplier of smart home energy technology. These collaborations allow Hometree’s financing options to be available to the customers of these companies, increasing its market reach and providing more households with the opportunity to adopt renewable energy technologies.

Innovative Financing Model for Homeowners

One of Hometree’s key innovations is its ability to provide affordable, long-term financing through a new securitization-backed asset class for renewable energy. Homeowners can take advantage of zero-deposit leases, low-interest rates, and payment plans that can stretch up to 25 years, making technologies like solar panels, batteries, and heat pumps more financially accessible. In some cases, homeowners may even benefit from a “pay as you save” model, where the savings generated by their renewable energy systems exceed their monthly payments, resulting in net-positive savings.

By creating this flexible financial infrastructure, Hometree is helping bridge the gap between homeowners and the capital markets, making the switch to green energy both feasible and financially attractive.

Strategic Investment from CPP Investments

The new £50 million mezzanine facility from CPP Investments is a significant milestone for Hometree, further strengthening its financial capability to accelerate the deployment of renewable energy technologies. Rory Duff, Managing Director of Hometree Finance, expressed the company’s enthusiasm for the partnership, stating, “We’re delighted that CPP Investments has joined us in our mission to help homeowners decarbonize their homes by installing solar panels and heat pumps. The energy transition will not happen without appropriate finance since very few people have the thousands of pounds needed for the upfront costs. CPP Investments understands the challenge we are facing and how bridging the gap between the capital markets and the residential sector can accelerate the affordable decarbonization of UK homes.”

CPP Investments, a global institutional investor, brings a wealth of experience in financing green energy projects in other major markets, including Germany and the United States. Ben Mason, Managing Director of European Credit at CPP Investments, highlighted the firm’s commitment to supporting Hometree’s growth, noting, “CPP Investments is an active participant in strategic financing transactions for innovative UK businesses in the energy transition sector. Our significant participation supports business expansion for Hometree while generating appropriate risk-adjusted returns for CPP contributors and beneficiaries.”

A New Era for Residential Renewable Energy

This latest round of financing will help Hometree achieve its goal of completing the first UK residential renewables public market transaction in the near future, tapping into the growing appetite for green finance products. The partnership with CPP Investments is part of a wider trend of financial institutions increasingly recognizing the importance of supporting the energy transition.

Hometree is poised to play a significant role in reshaping the UK’s renewable energy landscape, not only by providing homeowners with access to affordable clean energy solutions but also by pioneering new ways to finance the transition to net zero. With backing from major financial players like Barclays and CPP Investments, as well as its partnerships with leading industry players, Hometree is well-positioned to accelerate the decarbonization of homes across the UK, contributing to both environmental sustainability and long-term energy affordability.

Hometree’s £50 million financing deal with CPP Investments marks another significant step in its mission to make renewable energy accessible to UK homeowners. By offering innovative financing models, partnering with top industry players, and securing strategic investments, the company is at the forefront of the residential energy transition. With ambitious goals to decarbonize over a million homes by 2030, Hometree is well on its way to becoming a key player in Europe’s renewable energy sector, driving forward the sustainable transformation of residential energy.