Solar Panel Grants & Funding UK (2025)

Having solar panels installed can be a costly endeavour, much like a trip to the supermarket these days. 

Unlike the supermarket, solar is optional. And the upfront costs alone can deter many households from making the investment from the get-go. 

If you’re concerned about the cost, you’ll be glad to know that there is a range of grants and funding available. 

Below we explore what grants are currently available for solar panels, as well as historic funding...

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Solar Panel Funding Key Points: 

• Current funding/schemes: 
  

  • The Smart Export Guarantee (SEG) pays for excess solar energy exported to the grid.

  • Some homes may be eligible for funding and potentially free solar panels via the ECO4 scheme. 

  • The Home Upgrade Grant is available to eligible households and can provide a grant that can be potentially used to fund solar panels.

  • The Renewable Heat Incentive (RHI) offers incentives for solar thermal panels.

  • The VAT reduction scheme means that solar panels are VAT-free until 2027. 

  • If you are a resident of Scotland you may be eligible for the Home Energy Scotland Grant. 

  • Local authorities and organisations may offer additional grants.

  • Schemes that are no longer available: 

  • The Green Homes Grant scheme (this closed in 2021) provided vouchers for solar panel installation.

  • The Feed-in Tariff (FiT) paid homeowners for solar energy generation (this closed to new applications in 2019).

  • While getting a grant makes solar more attractive, the energy itself is always free.

  Explore a Solar Case Study: Check out an insightful Q&A session featured in one of our detailed case studies on domestic solar panels. Hear directly from a Heatable customer in the UK and gain valuable perspectives on their experience here.

  

  The image above shows a 23-panel solar installation, carried out by the MCS-certified solar team at Heatable, featuring the REA Fusion2 solar panels.

Are there any grants for solar panels available?

Yes, there are currently two main grants available for solar panels in the UK - these are the Energy Company Obligation Scheme (ECO4), as well as the Home Upgrade Grant. 

The ECO4 scheme could provide as much as £14,000 for eligible homes to make energy savings upgrades. That’s £14,000 you don’t have to spend (or more likely, that you can spend on something else). 

The Home Upgrade Grant is another option, this scheme is available with around 45 local authorities in England and enables eligible homes to access grants to make energy-saving upgrades, including the installation of solar panels. 

There are some other schemes worth being aware of too and although these may not assist you with the initial costs, they can help you offset the costs in the medium to long term. 

Energy Company Obligation 4 (ECO4)

The fourth rendition of the Energy Company Obligation was launched in April 2022 as a replacement for ECO3, hence its new name - ECO4. We have an inkling about what they may call a next replacement, but we’re not telling you…

It will run until the end of March 2026.

But what is ECO4 exactly and what does it offer?

ECO4 is a government scheme that seeks to enhance the energy efficiency of vulnerable and low-income households.

It only applies to Great Britain, so England, Scotland, and Wales.

Moreover, the Office of Gas and Electricity Markets or Ofgem administers the scheme. It keeps them off the streets. 

Another element of ECO4 is that local authorities must apply for funding via Ofgem before passing on this funding to households in the form of projects to improve the energy efficiency of these households.

Households who benefit from ECO4 will likely see their annual energy bills reduced by somewhere in the region of £300 to £1,600.

To be eligible for ECO4, you must meet the following criteria:

• Your home is low-income, vulnerable, or suffering from fuel poverty.

• Your household has an energy efficient rating between D and G. *

• Beyond that, you must either own and live in your home or occupy rented private accommodation.

*ECO4 aims to bring low energy efficiency households up to a rating of C.

Moreover, all-electric properties that use a District Heat Network or biomass boilers are not eligible for the scheme.

If you are currently receiving government benefits, you may not be eligible.

However, if you are receiving government benefits and your home is still classed as low-income, it may still be possible to apply for ECO4 as part of the ECO4 LA Flex.

As you might guess, this gives local councils the freedom to be more flexible when it comes to funding. Talk about stretching your funding…

It’s a way for local councils to support households that are not eligible for specific forms of help based on the pre-existing eligibility rules but who are struggling all the same.

In other words, it’s designed to allow for common sense where a council can see that a household is struggling and could benefit greatly from a given form of support.

This would especially make sense if the reasons for your lack of eligibility are down to minor details or a technicality.

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Home Upgrade Grant

Starting in April 2023 and running until 2025 is the Home Upgrade Grant scheme. 

This new scheme is currently operated by around 45 local authorities in England and offers grants of up to £10,000 for home improvements that can include solar panels. 

The good news is that grants can cover almost all of the cost of a new solar panel installation. 

The bad news is that you need to make sure your authority is on the participating list below: 

• Basildon Council

• Blackpool Council

• Bristol City Council

• Broadland District Council

• Calderdale Council

• Cambridge City Council

• Cambridgeshire and Peterborough Combined Authority

• Cheshire East Council

• City of York Council

• Cornwall Council and Council of the Isles of Scilly

• Darlington Borough Council

• Dartford Borough Council

• Devon County Council

• Dorset Council

• Durham County Council

• Eden District Council

• Greater London Authority

• Great Yarmouth Borough Council

• Leeds City Council

• Leicester City Council

• Lewes District Council

• Liverpool City Region Combined Authority

• Manchester City Council

• Midlands Net Zero Hub

• Newcastle City Council

• North Tyneside Council

• Northumberland County Council

• North Yorkshire County Council

• Oxfordshire County Council

• Plymouth City Council

• Portsmouth City Council

• Rochdale Borough Council

• Sedgemoor District Council

• Sevenoaks District Council

• Sheffield City Council

• Shropshire County Council

• Stroud District Council

• Suffolk County Council

• Surrey County Council

• Tonbridge and Malling Borough Council

Explore a Solar Case Study: Delve into an insightful Q&A session featured in one of our detailed case studies on domestic solar panels. Hear directly from a Heatable customer in the UK and gain valuable perspectives on their experience here.

Smart Export Guarantee (SEG)

Another form of financial support that exists for solar panels is the Smart Export Guarantee (SEG).

The SEG mandates that certain energy providers must purchase solar energy from small-scale generators (e.g., regular households). This makes you the (smart) exporter of energy. 

These specific energy providers are known as mandatory SEG licensees.

Mandatory SEG licensees must buy solar energy that they sell once they meet certain criteria.

How much they will pay you (i.e., the tariff rate per Kw) along with other details are determined by the licensee/energy provider themselves.

Here are the UK’s mandatory SEG licensees:

• E

• British Gas

• OV Energy

• The Utility Warehouse

• EDF

• Bulb

• E.ON

• Shell Energy

• Octopus Energy

• Scottish Power

• ESB

• Utilita

And these are the voluntary SEG licensees, who for some reason have chosen to pay you for your energy:

• Cilleni Energy Supply

• Pozitive Energy

• Smart Pay Energy

If you are currently on the FiT scheme, you can transfer over to the SEG if you’d like. Especially if you signed up under the assumption that the FiT scheme would bring you a fit-looking body, and now you’re disappointed. 

However, you would need to leave the FiT scheme first and then sign up with an SEG licensee. 

Before making the switch, you should first ensure that doing so would be financially beneficial.

This would primarily depend on when you signed up for the FiT.

After all, those who joined early would be receiving more substantial support than those who joined later in the scheme. 

Moreover, you should look at the tariff rates per kW offered by a range of SEG licensees and ensure your eligibility.

Once you’ve taken all the relevant pointers into consideration, you’ll be able to make a more informed decision as to whether you should switch over to the SEG.

If you are researching solar panel companies, you may find our resources valuable. Check out our comprehensive comparison of the best solar panel companies in the UK, learn about the Distribution Network Operator (DNO) process, and explore our detailed solar panel guide and solar advice section for expert insights and recommendations.

Regional Solar Grants

Aside from the national-level ECO4 and SEG, many parts of the UK feature regional grants for solar panels on a county level.

Of course, each of these grants will come with its own set of criteria.

For that reason, if you’d like to find out more information on any relevant grants in your region, take a look at your local authority’s website or give them a call.

Home Energy Scotland Grants & Loans

The Home Energy Scotland grant/loan is available to residents of Scotland who meet the eligibility criteria and want to make "energy improvements" to their homes.  

This includes the installation of solar panels and solar battery storage systems. 

The maximum amount available is £6,000, which could potentially cover the total cost of a solar array installation. 

The loan is completely interest-free and is repayable over a five-year period (if you borrow less than £5,000) or 10 years (if you borrow £5,000 or more).

All residents of Scotland can apply for the funding.

You can call Home Energy Scotland on 0808 808 2282 to find out more and to start the process. 

Purchasing Solar Panels on Finance

Aside from government and regional support, you could also reduce your costs (at least in the short term) by purchasing solar panels on finance.

In other words, you may want to buy now and pay later. Paying later is often preferred, but not as much as paying never. In paying for solar, “better late than never” does not apply. 

Of course, only certain companies offer solar panels on finance, and you will have to meet certain criteria to successfully apply.

What’s more, purchasing solar panels on finance will most likely mean paying interest.

So, while this approach to solar panel ‘funding’ can make it much easier in the short run, it will likely cost you more over time.

We have also reviewed the best solar panels and covered how long solar panels last in the UK. 

Securing a Loan for Solar Panels

Another way of paying for a solar panel installation such that you can save money in the short term is by taking out a loan.

Again, you’ll need to meet certain criteria if you want to receive a loan.

Moreover, interest will certainly apply in the case of taking out a loan. If not, perhaps you’d want to consider it for other things, too. 

0% VAT Scheme for Solar Panels 

As of April 2022, households throughout the UK with solar panel installations can avail of 0% VAT on the installation and supplies needed to fit a solar panel array.

This VAT-free approach will last until 2027. At that point, it will go back up to 5% (which is still quite a low rate).

However, the zero VAT eligibility rules are less stringent than was the case when 5% VAT was applied.

You must pay for the installation and supplies simultaneously (i.e., you’d need to hire a company that is both selling you the panels and fitting them for you). 

What’s more, you can include other relevant goods or services along with the solar panel's installation, once it occurs at the same time. After all, if you don’t have a roof yet, you can’t put any solar panels on it.

However, most of the work undertaken during this time period has to relate to reducing your energy usage from the national grid (and adding a roof is a great way to increase insulation). 

Still, learning about solar? Check out our guides on how many solar panels you need and how solar car charging works. 

Can you get free solar panels in 2024?

Potentially yes, you can get free solar panels via the ECO4 Scheme. 

However, it's worth being aware that you will have to meet the eligibility criteria and the amount you receive may not cover the full cost of the installation. 

Expired Solar Grants & Funding Schemes

Aside from the grants and funding discussed above, there are various options that have now expired i.e. they are no longer open to new applications. 

It’s worth mentioning this in case you were unsure whether they were still active. Only if you had a time machine were they still applicable (but then you’d probably be doing more important things than reading this). 

Please note that if you are already registered with FiT, you will continue to benefit from this scheme.

Although, you can transfer over to the SEG if you’d like.

Here are the UK’s recently expired grants/funding options:

Feed-In Tariff (FiT)

This tariff was the predecessor to the Smart Export Guarantee.

With a similar function, it ran from 2010 to 2019.

Domestic RHI

The renewable heat incentive or RHI expired in March of this year.

While it has been replaced by the Boiler Upgrade Scheme (BUS), this successor scheme covers biomass boiler and heat pump upgrades. It does not apply to solar panels, unfortunately.

Free Solar Panel Scheme

This scheme, with the most promising name, was discontinued in March 2019.

It allowed companies to rent your roof space for as long as 25 years in exchange for free solar panels.

The company would benefit from the FiT payments instead of you, thus showing how this scheme could have been seen as a win-win.

Next Steps For Your Solar Journey:

When planning to install solar panels for your home, there are several important factors to consider. Make sure to refer to the following guides to help you make informed decisions:

• How much do solar panels cost? 

• Are solar panels worth it for your home? 

• Is your roof suitable for solar panels? 

• What are the best solar panels available? 

• Is battery storage worth it? 

To dive deeper into these topics, head over to our advice section, check out our YouTube channel for informative videos, or read a customer case study to see how others have benefited from their solar installation. 

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