Solar Panel Grants and Funding Explained

Many people are looking to solar panels to reduce their electricity bills and lower their impact on the environment. However, the purchase and installation of solar panel technology can be quite high. To help overcome this challenge, the UK has a variety of solar panel grants and schemes that make it easier for lower-income households to take advantage of solar energy.

For those who are new to the renewable energy space, we’ll begin by taking a look at the benefits of solar. We’ll then unpack the various solar panel grants and schemes that could help you become the owner of a solar panel system and reap the benefits it has to offer.

Why are UK homeowners installing solar panels?

Before we unpack solar panel grants and schemes in the UK, you might be wondering why so many people are installing solar panels for their homes.

Solar technology offers households many benefits, including the following:

1. Reducing your electricity bills

The initial cost of purchasing and installing solar panels may be high, but they last for anywhere from 15 to 25 years, allowing you to save money by generating your own solar electricity over their lifespan. These savings are further emphasised when events occur that affect the price of electricity produced using fossil fuels, with certain disruptions causing massive price volatility while energy produced using solar panels remains fixed.

You can also sign up for the Smart Export Guarantee (SEG) feed-in programme that allows you to earn money per unit of excess electricity that you feed back into the grid. This money can go towards your energy bill or towards other household costs. For example, the So Energy fixed-rate tariff offers you 7.5p per kWh, which your excess solar energy could be earning for you.

2. Improving your energy security

With solar panels, you can protect your household against potential outages during the day, while the addition of a backup battery to your solar photovoltaic (PV) system will ensure energy security at night as well. Ultimately, a solar PV system provides you with extra peace of mind thanks to the ability to generate your own electricity for your household.

3. Reducing your carbon footprint

Every year we hear about the increasing impact of climate change on the world around us. By switching to renewable energy sources, such as a solar panel system, you reduce your impact on the environment and do your part to combat climate change.

All you need to know about solar panel grants and schemes in the UK

Now that you understand some of the benefits you gain from installing a solar power system in your home, it’s time to unpack the solar panel grants and schemes that are available to homeowners and renters in the UK.

Are there solar panel grants in the UK?

Yes, there are several solar panel grants and schemes that you can take advantage of in the UK. There are also other programmes, such as the Smart Export Guarantee (SEG) feed-in programme (where you earn money for excess solar energy that you feed back into the grid) and Zero per cent VAT incentive (all solar panels are currently VAT free), that you can make use of in combination with the solar panel grants.

What solar panel grants and schemes are currently available in the UK?

Numerous solar panel grants and schemes exist in the UK, each with its own benefits. The table below provides a brief summary of each grant and scheme, followed by a more detailed breakdown.

Energy Company Obligation (ECO4), which includes Local Authority Flexibility (LA Flex)

ECO4 is a government scheme aimed at reducing carbon emissions and improving energy efficiency in low-income households with an Energy Performance Certificate (EPC) of D or less across the UK. This is achieved through grants for the installation of solar panels and various energy-saving technologies. This programme brings UK homes one step closer to carbon neutrality.

This grant is available until March 2026.

Am I eligible for solar panel funding under ECO4 and LA Flex?

To qualify for solar panel funding under ECO4 and LA Flex, you need to meet the following criteria:

• Live in Brighton, Croydon, Peterborough, Portsmouth, Southampton, or West Sussex
• Have a household income less than £30,000 or receive a state benefit and pension
• Have a home with an EPC (Energy Performance Certificate) rating of D or below

Home Energy Scotland Grant and Loan Schemes

The Home Energy Scotland Grant and Loan Schemes programme is designed to provide people with grants or interest-free loans that can help them improve the energy efficiency of their homes. This includes funding the purchase of solar panels and other heating systems. Different grant amounts are available, depending on whether you’re an urban or rural resident. Urban residents qualify for a maximum grant of £7,500 while rural residents qualify for a maximum grant of £9,000.

This grant is subject to availability.

Am I eligible for solar panel funding under the Home Energy Scotland Grant and Loan Schemes?

To qualify for this grant or interest-free loan, you must:

• Live in Scotland
• Be a homeowner and be living in your home
• Be in the process of building your own home

Home Upgrade Scheme (HUG2)

The Home Upgrade Scheme Phase 2 (HUG2) is a government programme that helps low-income households that aren’t connected to the gas grid by improving the energy efficiency of their homes.

This grant is available until March 2025.

Am I eligible for solar panel funding under HUG2?

To be eligible for HUG2, you must:

• Live in a home without mains gas heating
• Live in a lower-income area based on the Index of Multiple Deprivation (IMD)
• Receive £36,000 gross or certain income-related benefits

Solar Together

Solar Together is a group-buying scheme that allows residents, small and medium-sized enterprises (non-domestic), and Commonhold Associations to come together to get more competitive pricing than they would individually. Participants in the Solar Together programme save anywhere between 10% and 25% of the costs associated with a solar installation.

This scheme is currently ongoing.

Am I eligible for solar panel funding under Solar Together?

All you need to do is register on the Solar Together website to take part in this group-buying scheme.

Welsh Government Warm Homes Nest Scheme

The Welsh Government Warm Homes Nest Scheme is a Welsh government programme that aims to improve the energy efficiency of lower-income households and other needy individuals in Wales. This is achieved by providing free information and free home energy solutions.

This grant is currently ongoing.

Am I eligible for solar panel funding under the Welsh Government Warm Homes Nest Scheme?

You are eligible for solar panel funding if:

• You live in Wales
• The property is owned or rented and has an Energy Performance Certificate (EPC) of E, F, or G
• A household member receives a means-tested benefit or income below a specific amount
• A household member has a qualifying physical or mental health condition