Solar panel grants make it cheaper and easier to switch to green, renewable energy. Find out how you can qualify in 2024.

Solar panel grants are becoming increasingly popular for homeowners to reduce their carbon footprint and lower energy bills – in some cases by £1,190 annually. Designed for low-income households and properties with a poor energy performance rating, UK government grants for solar panels enable homeowners, landlords and tenants to enjoy the benefits of the best solar panels. While the  ECO4 grant offers free solar panels to those eligible, there are several other financial incentives that can reduce the cost of solar panels.

Our researchers have assessed the solar panel grants and other incentives available in the UK, who qualifies, how to apply, potential savings, and in what form financial aid is received.

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Are there any government grants for solar panels in the UK?

In the UK, there are currently several solar panel grants and incentives available for homeowners with an aim to encourage domestic renewable energy and reduce your bills in the long run.

UK solar grants available

UK Solar grantsRun timeEligibilityPotential savings
Energy Company Obligation 4 (ECO4) inc LA FlexApril 2022 – March 2026Homes in England, Scotland, or Wales. Eligibility determined by local authoritiesUp to 100%
Solar TogetherOngoingHomeowners and renters living in a participating council areaSavings vary (savings of 10–25% have been made previously)
Home Energy Scotland Grant and Loan schemeOngoingHomes in Scotland£6,000 for solar installation or £5,000 for solar water heating system

As well as the above, there are two other solar panels incentives available for UK residents – Smart Export Guarantee (SEG) and 0% VAT until 2027. There were several government grants for solar panels in the UK which have since expired, these are listed below.

UK solar schemes, available and expired

SchemeRun timeEligibilityPotential savings
Smart Export Guarantee (SEG)OngoingHomes with a Microgeneration Certification Scheme (MCS) certificate or equivalent document. Installation must include an export meter and have a maximum capacity of 5MW1p – 24p per kWh of excess electricity produced by solar panels
Zero per cent VATApril 2022 – March 2027Solar panel purchases and installations made in England, Scotland, and WalesSavings dependent on solar panels cost
Feed-in TariffExpired 1 April 2019 (Those registered before this date will continue to benefit for the remainder of the 20-year period they signed up for)Owners of solar panels, wind turbines, and micro combined heat and power (micro-CHP) systemsGeneration Tariff – 6.38p – 13.88p per kWh Export Tariff – 4.77p per unit
Green Homes GrantExpired 31 March 2021All homeowners in EnglandUp to two-thirds of the total cost (up to £5,000); or up to 100% (maximum of £10,000) for those on qualifying benefits
Renewable Heat Incentive (RHI)Expired 31 March 2021Owners of biomass boilers, heat pumps, and solar thermal collectorsUp to £2,981
Free Solar Panel SchemeExpired March 2019All homeownersEntirely free solar panel system (in exchange for your installer receiving all Feed-in Tariff payments)

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Solar subscription plans – get solar panels with no upfront cost

A solar subscription plan allows homeowners to enjoy the benefits of solar energy without the upfront cost of installing solar panels. Several panel providers offer subscriptions and they typically work in one of two ways:

  • The installer retains ownership of the panels and you buy the generated energy at a cost far cheaper than grid supplied electricity
  • You own the panels and can use or sell the generated electricity

Either option avoids the initial outlay, allowing you to pay a monthly subscription. This often includes maintenance, repairs, warranty and in some cases, replacement batteries.

Installers offering subscription plans include:

 

  • Sunsave: From £69/month, includes 20-year warranty, replacement battery, fixed monthly fees
  • Effective Home: £99 onboarding fee, includes maintenance, 5-year fixed energy tariff
  • Otovo: 20-year warranty, includes maintenance 

This model allows for immediate savings on your electricity bills, with the added advantage of contributing to a greener environment. It’s an appealing choice if you’re looking to switch to solar with no initial investment.

What residential solar grants are available?

Several solar panel grants and incentives are available in the UK, with differing eligibility criteria and application processes.

two workmen fitting a solar panel

Ofgem is responsible for running the ECO4 scheme. (Image credit: Adobe)

Energy Company Obligation (ECO4) scheme (including LA Flex)

The UK government scheme Energy Company Obligation (ECO) managed by Ofgem focuses on improving the country’s least energy-efficient homes – and is primarily aimed at low-income and vulnerable households. Through the scheme, larger energy suppliers must provide energy efficiency measures for UK homes.  

The ECO has gone through a series of phases in regard to eligibility criteria and the focus of the scheme, including the expired ECO3. You could be eligible for the ECO4 funding if you receive any of the following benefits: 

  • Income-based Jobseekers Allowance (JSA)
  • Income-related Employment & Support Allowance (ESA)
  • Income Support (IS)
  • Universal Credit (UC)
  • Housing Benefit
  • Working Tax Credit (WTC)
  • Child Tax Credits (CTC)
  • Pension Credit Guarantee
  • Pension Credit Savings Credit

The Child Benefit income threshold to qualify for ECO4 varies depending on how many children you have and whether you’re a single or two-parent household.

Single-parent households:

  • One child – £19,900
  • Two children – £24,800
  • Three children – £29,600
  • Four or more children – £34,500

Two-parent households:

  • One child – £27,500
  • Two children – £32,300
  • Three children – £37,200
  • Four or more children – £42,000

Those with additional Department for Work and Pensions (DWP) benefits –regardless of whether you receive Universal Credit – may also be eligible for ECO4. This also applies to households on disability benefits, including Disability Living Allowance (DLA), and Personal Independence Payment (PIP).

The ECO4 grant’s focus is primarily on homes occupied by their owners. However, the scheme can also be extended to support energy-inefficient social housing and privately rented properties (so long as the property owner allows).  

Properties with an energy performance certificate, or EPC, rating of D or above are not eligible for the ECO4, and for homes of F and lower, the improvements should raise them to an EPC rating of at least D.

LA Flex (Local Authority Flexible Eligibility), an extension of the ECO4 scheme, allows local authorities to identify households that may not have met the criteria or been eligible under the national criteria. Through LA Flex local authorities can decide eligibility for energy efficiency improvements – this is usually based on the following:

  • The household is defined as low-income and is at risk of fuel poverty.
  • The property is hard to heat, often due to poor insulation or lack of a central heating system.
  • The residents are vulnerable in some way, such as being elderly, disabled, or having young children.

It should be noted that for private tenants to be eligible for LA Flex, they would need their landlord’s permission. 

Those who are eligible under ECO4 or LA Flex could be entitled to up to 100% off their solar panels. 

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How to apply for the ECO4

You can apply directly via your energy supplier or assess your eligibility by filling out the ECO4 eligibility questionnaire. A surveyor will then evaluate your premises and determine whether they’re suitable for solar panels.

To learn more about the ECO4 grant application process, our researchers spoke with Kevin Henney, Director at ECO4 Hub. Kevin has been managing the activities related to the ECO4 grant programme, including grant applications, local authority coordination and client installations, for almost two years, so is in an ideal position to give advice on what to expect when applying for an ECO4 grant. 

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Applying for the grant is easy, provided you avoid these common mistakes

  • Tip #1: When applying, make sure you have the necessary documentation to hand. You’ll need your council tax bill, ID, and evidence that the household income is under £31,000 per annum – this can be in the form of a pension statement, three months’ payslips and bank statements or a P60 dated in the last six months. If you are in receipt of benefits, you are required to sign a consent form which is verified by the Energy Saving Trust and provide a copy of a utility bill.
  • Tip #2: Double check that your name is spelled correctly at every step of the application process. Mistakes can hold up the process.

Grants can be approved in under a week

  • Tip #3: If you’re receiving eligible benefits, a survey can be arranged with the installer soon after this is verified. This process could take less than a week.
  • Tip #4: The Local Authority Flexibility scheme has different eligibility criteria depending on your local council and this could take a few weeks for approval to be granted.

Your solar panels could be installed within a week

  • Tip #5: Once your grant is awarded and you’re happy with the proposed work, a date will be arranged for the installation.

Grants exceeding £80,000 have been awarded for large-scale projects

  • Tip #6: The amount of money awarded varies depending on what work is required to maximise the property’s energy efficiency.
  • Tip #7: The project can involve a single-measure installation, such as a boiler replacement worth £5,000, right up to a comprehensive energy makeover involving internal wall and loft insulation, an air source heat pump and a solar panel installation, with a total value exceeding £80,000.

There’s been a significant increase in ECO4 grant applications

  • In the last year, increasing numbers of households are applying for the ECO4 grant.
  • This is attributed to rises in the cost of living, higher energy prices, and a greater awareness of the grant.

Solar Together

Solar Together is a group buying scheme for solar panels and battery storage that operates in local council regions in the UK. The scheme aims to make solar power more affordable and accessible for both homeowners and small businesses within the UK. 

Through Solar Together, interested parties can register and solar panel providers have the ability to then bid for the opportunity to install a group’s solar panels. The process usually creates a competitive installation price which tends to be lower than an individual household’s quote. 

After a winning provider has been chosen, the registered group usually receives a personal recommendation tailored to each individual’s home within the registered group. The group is then able to decide whether or not to proceed with the installation. 

Solar Together focuses on helping UK residents save money on their energy bills by providing a way to have access to renewable energy for a more affordable price. As well as this, the platform helps reduce carbon emissions and provides a high-quality installation service, full technical surveys and attentive customer service throughout the installation process. 

Home Energy Scotland Grant and Loan scheme

The Scottish government, in a bid to combat high energy bills and improve insulation in homes with low energy ratings, launched a series of grants and loans under Warmer Homes Scotland. This programme funds solar panel installations, provided they are part of a series of energy efficient home improvements.  

Warmer Homes Scotland targets households in the lower income bracket, including both homeowners and private tenants, who have lived in their homes for a minimum of six months. 

Residents can receive £6,000 (£1,250 grant, plus £4,750 optional loan) towards their solar panel installation or a £5,000 loan for a solar water heating system. 

To be eligible, you must:

  • Be a homeowner or the tenant of a private-sector landlord
  • Live in the home as your main residence
  • Have lived there for at least at least six months (unless in receipt of an SR1, a DS1500 or a BASRiS form)
  • Live in a home with a poor energy rating – this will be assessed by Warmworks
  • Live in a home with a floor area of 230m2 or less (typically up to five bedrooms).
  • Live in a home that meets the tolerable living standard set out in the Housing (Scotland) Act 2006 or, where the home does not meet the tolerable living standard, this will not impact the effectiveness of the recommended improvements for installation under the programme
  • Live in a home where the council tax band is A-F
  • Eligible households must include either a person who is over 75 with no central heating, a person who is in receipt of a DS1500 or BASRiS certificate completed by a medical professional or a person who is in receipt of at least one of the passport benefits, at any level or rate at which the benefit is paid.

The Smart Export Guarantee (SEG)

The Smart Export Guarantee (SEG) scheme was introduced by the UK government and replaced the previous Feed-in Tariff scheme; taking effect on 1 January 2020. The SEG obliges larger energy suppliers to offer an export tariff to their customers who generate their own renewable electricity via solar panels or wind turbines.  

Those who install solar panels or wind turbines with a capacity of up to 5kW can qualify for the SEG scheme. Another requirement is for them to have an export meter installed and a Microgeneration Certification Scheme (MCS) certificate, or equivalent document. For the eco-conscious, installing a solar storage battery is a welcome addition that will eliminate surplus waste – though this is not necessary to qualify for the SEG. 

How to apply for SEG

To receive SEG payments, you’ll first need to apply directly to a supplier which offers an SEG tariff. Suppliers who offer tariffs are listed on the Ofgem website.

It’s important to note that your energy provider does not need to be your SEG tariff supplier – these can be two separate companies. Any suppliers who are part of the SEG are obliged to offer you a tariff, and this can be either fixed or variable; with the terms and conditions being set by the supplier. Tariffs can change over time, so be sure to carry out regular checks on whether your tariff is still competitive.  

Homeowners who have a storage battery or an electric vehicle that has the capability of importing and exporting electricity 

Zero VAT

Under the government’s green incentives selected energy-saving materials and equipment (including solar panels) qualify for a reduced VAT (Value Added Tax) rate. While typically sitting at 20%, for energy-saving goods and services, it will be set at 0% until 31 March 2027. This applies to both the supply and installation of solar panels in England, Scotland and Wales. 

 

Are there any other ways to finance solar panels?

There are several other organisations which offer assistance to fund solar installations, which focus on mortgage holders specifically. 

SchemeRun timeEligibilityPotential savings
Barclays Greener HomesOngoingFirst-time claimers with Barclays residential mortgage customers who pay by direct debit£1,000
Lloyds Bank Eco Home RewardRegister by 31 October 2023Lloyds Bank mortgage customers£500 cashback
Halifax Green Living RewardRegister by 31 October 2023Halifax mortgage customers£500 cashback

Barclays Greener Homes

Barclays has launched the Greener Home Reward Scheme as part of its commitment to support energy-efficient home-related improvements. Barclay’s scheme is available to its residential mortgage customers and aims to aid the installation of solar panels. Registered customers can enjoy a financial incentive towards solar panels, so long as they are eligible. 

A cash reward of £1,000 is offered under the scheme to its registered mortgage customers who have already installed and fully paid for their solar panel system. It’s important to note that homeowners’ solar installation must have been carried out by a business registered with TrustMark in order to ensure quality. 

Lloyds Bank Eco Home Reward

If you are applying for a Lloyds Bank mortgage, already have one, or are borrowing funds for home improvements, you might be eligible to claim up to £500 cashback for a solar installation. 

After you’ve registered either online or in person and checked your eligibility, install your solar panels via your chosen supplier, once completed you’re able to claim your cashback.

Halifax Green Living Reward

You’re eligible to claim up to £500 cashback for installing solar panels if you’re an existing Halifax mortgage holder, in the process of applying for one, or are securing funds for home improvements. 

To reap the benefits of this offer, you’ll need to register and verify your eligibility. Once completed, you can go ahead with installing your solar panels using your chosen supplier. After the installation is completed, you’re able to claim your cashback. 

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Which solar panel grants have expired?

Several government grants have expired in recent years, and the table below lists these.

UK solar grantsStatusEligibilityPotential savings
Feed-in TariffExpired 1 April 2019 (Those registered before this date will continue to benefit for the remainder of the 20-year period they signed up for)Owners of solar panels, wind turbines, and micro combined heat and power (micro-CHP) systemsGeneration Tariff – 6.38p – 13.88p per kWh Export Tariff – 4.77p per unit
Green Homes GrantExpired 31 March 2021All homeowners in EnglandUp to two-thirds of the total cost (up to £5,000); or up to 100% (maximum of £10,000) for those on qualifying benefits
Renewable Heat Incentive (RHI)Expired 31 March 2022Owners of biomass boilers, heat pumps, and solar thermal collectorsUp to £2,981
Free Solar Panel SchemeExpired March 2019All homeownersFully free solar panel system (in exchange for your installer receiving all Feed-in Tariff payments)

Expired: Green Homes Grant

The Green Homes Grant was a government grant launched in 2020 as part of a broader strategy to improve the energy efficiency of homes, and reduce carbon emissions.

Under the Green Homes Grant, homeowners and landlords in England could apply for vouchers covering up to two-thirds of the cost of hiring professionals to install energy-saving home improvements. The maximum value of the vouchers was £5,000, although low-income households could receive vouchers covering the full cost up to £10,000.

The types of improvements covered under the grant were separated into two categories –  primary and secondary measures. Primary measures included insulation and low-carbon heating solutions, and only after installing one of these could homeowners apply for a secondary measure, such as double or triple glazing, energy efficient doors, or heating controls.

While the Green Homes Grant did not specifically cover the installation of solar panels, it did provide support for solar thermal systems, which generate hot water using energy from the sun.

However, the scheme faced a number of administrative challenges and was closed to new applications in March 2021, less than a year after it was launched.

In an effort to introduce solar technology as a mainstream home improvement, the government used to offer various incentives and grants that were very enticing. 

Expired: Renewable Heat Incentive

First launched in 2014, the Renewable Heat Incentive (RHI) scheme closed for new applications on 31 March 2022. Through the RHI, the government would pay quarterly payments of 20.66p/kWh for seven years after installation of solar panels, eventually amounting to a saving of £2,981. 

The RHI only included heat-generating renewables, so those with thermal solar panels benefitted, while solar PV panels were excluded. The Boiler Upgrade Scheme, launched in April 2022, is its natural successor, but does not include solar panels.

Expired: Feed-in Tariff

The Feed-in Tariff (FiT) was launched in April 2011 and closed to new applicants in April 2019. During these eight years, homeowners would receive payments for any surplus electricity (paid by kWh) generated by their domestic solar panels that was then supplied back to the grid. 

Those who signed up for the scheme will receive payments for 20 years from the date of registration with payments depending on the size and type of the solar PV array.

Expired: Free solar panel scheme

For a time, if you could not afford the upfront costs to install solar panels, companies would essentially rent roof spaces, install PV panels for free and absorb the costs of maintenance. In return, homeowners would benefit from the FiT payments. Schemes like this in the majority stopped running in 2019 as FiT ended. 

When will you break even?

The amount of time it takes for you to break even from your initial solar panel investment depends on:

  • Your initial solar panel cost
  • Where you live
  • Your energy consumption
  • Price of electricity
  • If you have a solar battery or not
  • If you’re part of the SEG scheme

Frequently Asked Questions about solar panel grants

Conclusion

Solar panels are the most affordable they’ve ever been, and with grants like ECO4, you can soon start reaping the rewards of clean solar energy. You can also save on energy costs and even receive payments when you send excess energy to the National Grid via the SEG scheme.

We recommend considering whether you’re eligible for funding and further researching the advantages of solar energy. You might assume switching to solar energy is out of the question, but with the help of 0% VAT and various funding schemes, solar panels could be much more within reach than you think.