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Solar panels are becoming increasingly popular among homeowners in the UK as energy prices rise: about 1.3 million households across the nation have opted for this renewable energy option.
For a three-bedroom house, the average cost of solar panels comes in at around £9,100 (with a battery). Despite the hefty initial outlay, once installed, solar panels can potentially save you £1,190 on your annual energy bills, meaning you could break even within eight years.
While a solar panel system is expensive, there are ways to lower the costs. If you receive government benefits, for example, there’s a good chance you’ll be eligible for a grant to help with the upfront costs. Solar panel grants offer free solar panels to qualifying households, and there are several other schemes available, too. Our experts have examined the latest grants and schemes to help you understand how to make the most from these solar energy funding opportunities.
UK homeowners can benefit from several solar panel grants and other incentives designed to encourage the switch to renewable energy systems and reduce household bills.
We regularly review solar panel funding, updating our information with the latest government and financial organisations’ announcements. Last updated 24 May 2024.
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The eligibility requirements for grants for solar panels vary greatly from scheme to scheme. For example, in order to benefit, you may need to live in a particular area or type of property, meet certain income or financial requirements, or live in a building with particularly poor energy efficiency.
To avoid wasting time and energy, before you start an application, make sure you understand and meet all the eligibility criteria for that particular grant. The exact details of these requirements will be outlined by the organisation administering the grant and can usually be found on the relevant scheme’s website.
The Energy Company Obligation (ECO) is a UK government scheme managed by Ofgem. It places a Home Heating Cost Reduction Obligation (HHCRO) on medium and large energy suppliers and works to improve the performance of the country’s least energy-efficient homes – those with an Energy Performance Certificate (EPC) of D or lower. The scheme also targets low-income families and other vulnerable households receiving government benefits, such as income support or child benefits.
The ECO has run multiple phases, each with slight changes in focus and eligibility criteria. If you receive any of the following benefits, you could qualify for ECO4 funding:
Anyone who receives additional Department for Work and Pensions (DWP) benefits could also be eligible for ECO4, regardless of whether they receive Universal Credit.
The main focus of this grant is on owner-occupied homes. However, it will offer support to energy-inefficient social housing and privately rented residences, provided the property owner grants permission for work to take place.
Applying for an ECO4 grant is quick and straightforward, and it’s available through several solar companies and installers. You can find installers through an online search. No matter which company you pick, the application process is generally the same:
LA Flex is an extension of the ECO4 scheme. Under this initiative, local authorities can determine eligibility for energy efficiency measures and award households that may not have qualified under the national criteria. Circumstances might include:
Private tenants can qualify under LA Flex with their landlords’ permission. If you’re eligible under ECO4 or LA Flex, you could be entitled to up to 100 per cent off the cost of your solar panels.
For a deeper understanding of how the ECO4 grant works, our researchers spoke with Kevin Henney, Director at ECO4 Hub.
Independent Advisor (IA): First, please tell us a little about yourself and your role.
ECO4 Hub Director Kevin Henney (Henney): I currently serve as Director at ECO4 Hub. I am responsible for managing and overseeing all the activities related to the ECO4 grant programme. This includes reviewing grant applications, coordinating with local authorities and ensuring the smooth and efficient installation of energy-efficient systems for our clients.
IA: How many grants have been approved over the past year? Have you seen an increase in grant applications over the past 12 months?
Henney: Over the past six months, we’ve successfully finished more than 60 installations, and we currently have more than 100 slated for the near future.
Over the last 12 months, we’ve indeed observed a significant uptick in grant applications. This surge can be attributed to the rise in the cost of living and energy, as well as increased awareness about the grant.
IA: Can you give us an idea of how much money people are awarded? Is there a range or an average amount you can share?
Henney: The amount of money awarded per grant varies greatly depending on the work required for each individual property. Our goal under the regulations is to maximise energy efficiency.
We’ve dealt with diverse projects, from single-measure installations such as a boiler replacement worth £5,000 to comprehensive energy makeovers involving internal wall insulation, loft insulation, an upgrade to an air source heat pump and the installation of solar panels, with a total value exceeding £80,000.
IA: How long does it typically take for someone to get their grant approved?
Henney: The approval time for a grant depends on a few factors, but there are two main routes that can be followed:
IA: Once a grant is approved, what are the next steps for a homeowner? How long does it take from grant approval to solar panel installation?
Henney: Upon approval of a grant and once the client confirms they’re happy with the proposed work, we can proceed to installation. In some cases, we’ve even completed installations within the same week of approval.
IA: Are there any common mistakes people make when applying that can delay the grant approval process?
Henney: The most common errors made during application that delay the process include not using the exact spelling of the applicant’s name and not having the necessary documentation for local authority approval, such as a council tax bill. It’s essential to pay attention to these details to ensure a smooth application process.
IA: What documentation is required when applying for the ECO4 grant?
Henney: If you receive benefits, you must sign a consent form, which the Energy Saving Trust verifies, and provide a copy of a utility bill. If you’re applying under LA Flex criteria, you’ll need your council tax bill, ID and evidence that the household income is under £31,000 per annum, which may be in the form of a pension statement, three months’ payslips and bank statements or a P60 dated in the last six months.
Solar Together is a group buying scheme for solar panels, operating in local council regions of the UK. It aims to make solar power more accessible and affordable for homeowners and small businesses.
The scheme brings together households and local authorities to create a collective buying group for solar panels. Interested parties register, and solar panel companies bid for the chance to install their panels for the group. This typically results in a more competitive installation price – lower than an individual household could typically negotiate.
Once a provider is selected, each of the registered participants receives a personal recommendation tailored to their specific needs. At that point, they can then decide whether to go ahead with the installation.
The Solar Together scheme aims to promote the use of renewable energy, reduce carbon emissions and help households save money on their energy bills. Not only does it provide a platform for more cost-effective and higher-quality solar panel installations, but it also offers full technical surveys and thorough customer service throughout the process.
How to apply for the Solar Together scheme
Homeowners living in a participating council area just need to register on the Solar Together website.
The HUG2 scheme has been running since April 2023 and will continue to accept applications until March 2025. It supports low-income families by awarding grants of up to £10,000 for solar panels and other energy-efficient home improvements.
Privately rented property eligibility is limited to landlords with a portfolio of no more than four properties. Landlords must contribute one-third of the total cost of any upgrades.
To be eligible, you must:
How to apply for HUG2
For homeowners, check whether your local council offers the scheme, and, if so, apply directly. If you live in a privately rented property, your landlord will need to make the application.
Available to all homeowners in Scotland, the Home Energy Scotland Grant and Loan scheme is designed to either award grants or provide interest-free loans for energy-efficient home improvements.
A rural uplift is also available to provide extra support to rural and island homes, which can face higher costs for home upgrades.
The Scottish government’s scheme can help with:
How to apply to the Home Energy Scotland Grant and Loan scheme
If you’re a homeowner, you can apply for the grant by contacting Home Energy Scotland by email, phone or Whatsapp.
The Warm Homes Nest scheme from the Welsh government offers free advice on improving energy efficiency at home. Eligible households may qualify for free home improvements, including solar panels.
You could be eligible for free solar panels if you meet all three conditions below:
How to apply to the Nest scheme
If you have queries about the scheme or your eligibility, you can call Nest for free advice. The Welsh government website also provides information and guidance.
Introduced by the UK government on 1 January 2020, this replaced the previous Feed-in Tariff (FiT) scheme. The SEG mandates that larger energy suppliers must offer an export tariff to customers who generate their own renewable electricity.
Anyone who installs a renewable energy system – such as solar panels or wind turbines – with a capacity of up to 5MW can qualify for the SEG. Applicants must also have installed an export meter and have been issued an MCS certificate or equivalent document. Including a solar storage battery in your system isn’t required to qualify for the SEG, but it could be beneficial to prevent wasting surplus energy.
To receive payment under this scheme, you’ll need to apply directly to an energy supplier that offers SEG tariffs. You’ll find a list of participating companies on the Ofgem website.
It’s worth noting that the supplier who provides your energy doesn’t need to be your SEG tariff supplier – they can be two separate entities.
Suppliers under the SEG are required to offer you a tariff. However, they’re allowed to set the terms of that tariff, which could be either fixed or variable.
Remember that these tariffs can shift over time, so you’ll need to regularly check your tariff to ensure you’re getting a competitive rate.
If you own a storage device capable of importing and exporting electricity – such as a household battery or an electric vehicle – you could benefit from the SEG. Your potential SEG tariff supplier can advise you on this.
In the UK, the value-added tax (VAT) rate on most goods and services is 20 per cent. But as part of the UK government’s efforts to encourage energy efficiency and the adoption of renewable energy sources, certain energy-saving materials and equipment, including the best solar panels, qualify for a reduced VAT rate.
This reduced rate is currently 0 per cent until 31 March 2027, and it applies to the supply and installation of solar panels on residential properties in England, Scotland and Wales.
How to apply
There’s no need to apply for zero VAT, as it should automatically be applied by your solar panel provider.
Several other organisations have plans in place to help finance solar panel installations.
Scheme | Run time | Eligibility | Potential savings |
---|---|---|---|
Barclays Greener Homes | Ongoing | First-time claimers with a Barclays residential mortgage who pay by direct debit | £1,000 |
Sunsave Plus subscription | Waiting list for applications | UK residents aged 18-60 who are property owners and in full-time employment. Acceptance is subject to status | Pay for your solar installation in monthly instalments |
As part of its commitment to encouraging energy-efficient home improvements, Barclays has launched the Greener Home Reward scheme to help its UK residential mortgage customers fund their solar panels. By registering online for the scheme, eligible customers can save on their investment in solar technology.
Under the Greener Home Reward scheme, Barclays offers a cash reward of £1,000 to its residential mortgage customers who have installed and paid in full for their solar panel systems. To ensure quality, the installation must have been carried out by a business registered with TrustMark.
Once the installation is complete, the customer is eligible for the £1,000 cash reward, making their shift to sustainable energy more affordable.
If you applied for this scheme on or before 31 January 2024, you’ll need to submit your claim form by 31 July 2024. Then you’ll have a further month to provide proof of your home improvements. For applications received on or after 1 February 2024, you’ll need to claim the reward within nine months of the date of application and provide proof of the completed work.
How to apply
It’s easy to apply to the scheme online. If you have any questions, you can also contact Barclays by phone.
Sunsave has been installing solar panel systems since 2022. As part of the government’s push towards renewable energy, the company has received funding for its Electric Roof project. Designed to make solar panels affordable for more homeowners, Sunsave Plus is a subscription service. Monthly fees starts at £69 (there are no upfront costs).
Sunsave’s subscription plan includes a 20-year maintenance and monitoring service, battery and inverter replacements and access to tariffs for varied electricity rates – all of which can increase your savings.
How to apply to Sunsave Plus
It’s easy to apply for the scheme on Sunsave’s website, but bear in mind that there’s currently a waiting list.
Although there aren’t many grants for solar panels in Scotland, Scottish residents can take advantage of schemes such as the Home Energy Grant and Loan Scheme, as well as ECO4. If you’re looking for a Welsh government grant for solar panels, the Warm Home Nest scheme offers free advice, and eligible homeowners could receive financial assistance for solar panel installation. While there are no specific grants for solar panels in Northern Ireland, homeowners can still save thanks to the zero VAT scheme and the Barclays Greener Home Reward.
During our extensive research into the various funding schemes and government grants for solar panels, our experts found several websites that claimed to offer government-backed funding. However, on further investigation, we found these were not linked to any official programme. To protect yourself from falling victim to scam solar panel schemes and ensure you’re participating in legitimate, beneficial government grants, be sure to follow these simple steps:
Several solar panels grants have recently expired. These schemes typically had fixed durations or funding limits, so once a certain date was reached or the available funding was exhausted, the grant was terminated and is no longer open to new applicants. Below are a few examples of schemes that recently expired.
UK expired grant | Expiration date | Eligibility | Potential savings |
---|---|---|---|
Feed-in Tariff | Expired 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) systems | Generation tariff – 6.38-13.88p per kWh; export tariff – 4.77p per unit |
Green Homes Grant | Expired 31 March 2021 | All homeowners in England | Up to two-thirds of the total cost (maximum of £5,000) or up to 100% (maximum of £10,000) for those on qualifying benefits |
Renewable Heat Incentive (RHI) | Expired 31 March 2022 | Owners of biomass boilers, heat pumps and solar thermal collectors | Up to £2,981 |
Free Solar Panel Scheme | Expired March 2019 | All homeowners | Fully free solar panel system (in exchange for your installer receiving all FiT payments) |
The FiT was a UK government scheme aimed at encouraging the uptake of a range of small-scale renewable and low-carbon electricity generation technologies.
Under the scheme, homeowners who installed renewable electricity systems, such as solar panels, wind turbines or hydroelectric power, could receive payments from their energy supplier. Payments were based on the electricity they generated and used themselves, as well as for any surplus energy they exported back to the national grid.
Although the scheme closed to new applicants in March 2019, existing contracts continue to be honoured for a maximum of 20 years.
Our experts answer all your burning questions about government grants for solar panels
Yes, several grants are available to households in the UK, allowing more people to benefit from the advantages of solar panels.
Solar panel grants and incentives include the ECO4 scheme and the SEG. Local authorities in England and the devolved governments of Scotland, Wales and Northern Ireland also offer a range of grants, loans and other types of support to those installing solar panels.
The main reason for the closure of some solar panel grants is budgetary constraints. Governments operate with finite resources and need to regularly make decisions about how to allocate funds. Sometimes, the cost of running a grant scheme outweighs the perceived benefits, or other initiatives might be deemed a higher priority.
Another reason could be changes in government policy or strategy. For example, as the cost of solar panels has dropped significantly over the past decade, authorities may feel that market forces alone are enough to encourage their adoption and that subsidies are no longer necessary or could be better used to support other, newer technology.
A grant or scheme might also close due to issues with its implementation or outcomes. For example, a grant might be discontinued if there are problems with administration, the scheme isn’t delivering the expected results or the uptake from eligible people is low.
If you’re thinking about installing solar panels, it’s worth researching grants, incentives and other forms of financial support. These schemes can significantly reduce the upfront cost of your solar installation and increase the financial return on your investment.