Climate Week Guide:

Funding Warmer, Lower-carbon Buildings

As part of Sisalwool’s support for Scotland’s Climate Week, we are sharing useful information to help turn good ideas into real projects. Retrofit can feel like a major commitment, whether you are improving a family home, a workshop, an office, a community building or a larger commercial property….but funding, grants and affordable finance can make the first step a little easier…..

There is no single grant that covers every project or every type of insulation. Support changes over time, eligibility rules matter, and many schemes require you to apply before work begins. The best starting point is to understand the building, get impartial advice, and see where insulation and other fabric improvements fit within a wider plan.

This guide highlights some of the routes currently available in Scotland, and signposts  support elsewhere in the UK….

Support for Businesses

For Scottish businesses, the most useful place to start is Business Energy Scotland. It offers free, impartial advice to small and medium-sized enterprises (SMEs), charities and not-for-profit organisations that want to cut energy use, carbon emissions and costs. Its advisers can assess opportunities and produce a report that can support an application to the Scottish Government’s SME Loan Scheme.

Business Energy Scotland reports that it has delivered more than £200 million in savings for organisations and typically delivers savings of 24%, although each project will differ.

Scottish Government SME Loan Scheme

The principal route to finance for many eligible Scottish businesses is the SME Loan Scheme. It is designed to help businesses invest in energy- and carbon-saving measures, including improvements to a building’s fabric….

Eligible applicants can apply for:

• An unsecured, interest-free loan of £1,000 to £100,000 for eligible upgrades.
• A cashback grant of up to £30,000 for eligible equipment and improvement projects.
• Finance for a package of measures, which may include insulation and other building-fabric upgrades, heating, ventilation and air-conditioning improvements, lighting, controls and renewable technologies.

The scheme is intended for Scottish SMEs, charities and not-for-profit organisations that have been trading for at least 12 months. A Business Energy Scotland report is required before applying, so it is worth speaking to an adviser early, before committing to a specification or starting work.

For an insulation project, that could mean positioning the work as part of an overall plan to improve the building: retaining heat, reducing energy demand and making heating upgrades work more effectively.

In some cases, it may be more practical to combine insulation with lighting, heating controls, ventilation or renewable-heat measures than to view it as a standalone purchase.

A sensible next step

Business Energy Scotland can help organisations identify opportunities and access the SME Loan Scheme, but funding rules and eligible measures can change.

Speak to its advisers early, develop a clear scope of works, and keep quotes, energy information and building details to hand. Learn more at Business Energy Scotland or call 0808 808 2268.

Support For Homeowners

For homeowners in Scotland, the main first stop is Home Energy Scotland. It provides free, impartial advice and administers the Scottish Government’s Home Energy Scotland Grant and Loan scheme, which can help fund insulation, clean heating and other eligible energy-efficiency improvements.

Home Energy Scotland Grant and Loan

Owner-occupiers in existing homes may be able to access a combination of grant support and an optional interest-free loan. You do not need to be receiving benefits to apply, but the property must be your main or only home. Private landlords, businesses and developers are not eligible for this scheme.

For energy-efficiency measures, including eligible insulation, the scheme currently offers:

• A grant covering up to 75% of the combined cost of energy-efficiency measures, capped at £7,500.
• An optional interest-free loan of up to £7,500 for eligible energy-efficiency work.
• An additional rural and island uplift of up to £1,500 for energy-efficiency grants, where eligible.

The exact funding available depends on the measure. Current examples include up to £7,500 of grant funding for solid-wall insulation, while loft, cavity-wall and underfloor insulation may attract grant funding of up to £1,500 per improvement. Please check the latest rules before planning costs around a specific figure.

There are important conditions. Applicants need an Energy Performance Certificate (EPC), and the proposed improvement generally needs to appear as a recommended measure on that EPC. If the EPC recommends loft or cavity-wall insulation, those measures normally need to be completed before you claim for other energy-efficiency improvements. Funding is not available for spray-foam insulation under the scheme.

Start by contacting Home Energy Scotland or calling 0808 808 2282. An adviser can explain the process, check the current rules and help establish which route is most relevant for the property.

Other Scottish support

Depending on household circumstances and where you live, other routes may be available:

• Warmer Homes Scotland can provide support to eligible households facing fuel poverty, helping make homes warmer and more energy efficient.
• Area Based Schemes are delivered through local authorities and can support targeted local improvements, often in communities with a high proportion of less energy-efficient homes.
• Your local council may also run time-limited energy-efficiency, housing-repair or fuel-poverty programmes, so it is always worth checking locally.

Eligibility for these options can depend on income, benefits, the household’s circumstances, the home’s condition and local priorities. Home Energy Scotland remains the simplest impartial starting point.

What About Green Mortgages?

A green mortgage is a product designed to reward, or help fund, homes that are more energy efficient.

They work in different ways depending on the lender. Some offer a lower interest rate or cashback when you buy a home with a high Energy Performance Certificate rating (usually EPC A or B). Others provide preferential terms, cashback or additional borrowing when you are remortgaging or releasing equity to pay for eligible improvements, such as insulation, solar panels, windows or low-carbon heating.

In simple terms, a green mortgage may help in one of two ways:

• Buying an efficient home: the lender may offer a discounted rate or cashback if the property meets its energy-performance criteria.
• Improving your existing home: the lender may offer finance, a preferential rate or a cashback incentive for qualifying retrofit work.

They are not a government grant and do not replace the need for a proper retrofit plan. You are still borrowing money, so affordability checks, interest rates, product fees, loan-to-value limits and the cost of the work all matter. The “green” label also varies considerably between lenders: some products only apply to efficient homes at purchase, while others support improvements after you own the property.

Before proceeding, ask a lender or mortgage adviser:

• Does the product apply to buying, remortgaging or improving a home?
• Which EPC rating or improvements qualify?
• Should the work be completed before the mortgage offer, or can it be funded afterwards?
• Are there limits on the type of work, installer or evidence required?
• Is the overall mortgage deal genuinely better once interest rate, fees and repayments are considered?

For a major retrofit, it can be sensible to explore green-mortgage finance alongside grants and interest-free public loans. However, check scheme rules carefully: some public funding cannot be combined with other funding for the same measure.

Support elsewhere in the UK

Funding is different across the wider UK, so homeowners outside Scotland should use national advice services rather than relying on Scottish eligibility rules.

• England: The Energy Company Obligation (ECO) supports qualifying low-income and vulnerable households with energy-efficiency improvements. The Great British Insulation Scheme ended on 31 March 2026, so households should check current successor schemes, ECO support and local-authority options rather than assume it remains available.
• Wales: The Welsh Government’s Warm Homes Nest scheme offers free advice and, for eligible lower-income households and qualifying privately rented homes, may provide fully funded energy-efficiency improvements. Measures can include insulation, heating improvements and solar PV following assessment.
• Northern Ireland: The Northern Ireland Sustainable Energy Programme supports energy-efficiency projects for domestic and non-domestic customers, with most funding directed at vulnerable or priority households. The Affordable Warmth Scheme may also help eligible owner-occupiers improve heating and energy efficiency.

Don’t Make Assumptions - Seek Advice

Funding can help make an improvement possible, but it should support, not dictate, the right solution for a property.

A good retrofit starts with understanding the building: where it loses heat, how it manages moisture, the condition of its walls and roof, how it is ventilated, and which measures should come first.

For homeowners, speak to Home Energy Scotland before starting work or ordering materials. For businesses, begin with Business Energy Scotland and use its advice to build a credible plan. That way, an insulation or retrofit project has the best chance of improving comfort, reducing energy demand and delivering value over the long term.

READ MORE....CHECK OUT OUR GUIDE TO DOMESTIC INSULATION GUIDES HERE