Solar Panel Grants & Funding

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Last Updated on 10th July 2024

Solar Panel Grants - Can You Get Free Solar Panels?

Imagine slashing your energy bills while simultaneously benefiting the environment. Solar panel grants make this enticing prospect a reality, offering financial assistance to those who are eligible. Along with funding, many people also wonder if it's possible to get solar panels for free. While in some cases this is possible, it is important to understand the specific nuances.

As you consider making the switch to renewable energy, understanding the landscape of solar panel grants, as well as the financial agreements, can significantly influence your decision. Let's delve into how these grants work, who’s eligible, and the potential savings on offer, setting you on a path to a greener, more sustainable future.

Key Takeaways

💡 The ECO4 scheme provides grants for free solar panels to eligible low-income and vulnerable households.

⚡ The Smart Export Guarantee (SEG) allows solar panel owners to earn money by selling excess electricity back to the grid.

💚 As of April 2022, there is 0% VAT on solar panel materials and installation, down from the previous 5%.

🌍 Some local authorities offer grants of up to £10,000 for home improvements, including solar panels, through the Home Upgrade Grant.

🏡 While not all schemes offer free solar panels, there are multiple grants to help people looking to install solar panels and/or lower their energy bills.

Types Of Solar Panel Grants In The UK

Starting off, let's explore the various types of solar panel grants that can make your transition to solar energy both affordable and straightforward. In the UK, several government-backed schemes, solar-specific schemes and regional grants specifically target both installation costs and operational efficiency of solar systems.

Government Grants And Funding

There are various funding options that the government has implemented to make solar panel installation more accessible and affordable for UK homeowners, potentially leading to significant long-term savings on energy bills and reduced carbon emissions:

1. Energy Company Obligation 4 (ECO4):

  • Targets low-income households and those on government benefits.

  • Provides free solar panels, if eligible, easing the financial burden of installation.

  • Eligibility depends on your income level and benefit status.

2. Smart Export Guarantee (SEG):

  • Compensates you for excess electricity exported back to the grid, however does not provide free solar panels or renewable energy equipment.

  • Payment rates differ by supplier but can reach up to 11p per kWh.

  • This scheme promotes not only installation but also the sustainable use of solar energy.

3. Home Upgrade Grant (HUG2):

  • Aims to assist low-income households with energy-efficient home upgrades.

  • Includes solar panels among the upgrades, though you cannot get completely free solar panels with the grant.

  • Specific eligibility criteria must be met to benefit from potential savings.

4. Public Sector Decarbonisation Scheme (PSDS):

  • Provides grants to public sector bodies in England to fund heat decarbonisation and energy efficiency measures, including solar panel installations, to support the UK government's goal of reducing emissions from public sector buildings.

  • The scheme takes a "whole building" approach, considering solar panels alongside other technologies to effectively reduce carbon emissions across public estates.

  • Since its inception in 2020, the scheme has funded almost 1,000 projects and is currently in its fourth phase, as confirmed by the Department for Energy Security and Net Zero in February 2024.

Solar-Specific Schemes

Solar-specific schemes in the UK are designed to promote the adoption of solar energy systems and make them more accessible to homeowners. Two key initiatives in this area are:

1. Solar Together:

  • Facilitates reduced costs through collective purchasing of solar panels.

  • Offers the advantage of buying in a group, which can significantly lower expenses.

2. Vat Exemption:

  • 0% VAT rate applies to the installation of solar panels in residential properties in Great Britain.

  • The 0% rate covers both the supply of solar panels and the installation costs.

  • This reduced VAT rate is temporary, lasting from April 1, 2022 to March 31, 2027.

Regional Grants

The availability of solar panel grants in the UK varies notably across different regions, each offering unique schemes and specific eligibility criteria:

1. Scotland’s Home Energy Scotland Loan:

  • Offers interest-free loans for installing solar PV systems.

  • Helps cover the upfront cost of solar installations.

  • You can combine this with cashback grants to further reduce costs.

2. Wales’s Nest Scheme:

  • Provides free solar panels to qualifying households.

  • Specifically designed for those who meet particular criteria based on income and energy efficiency assessments.

Name of GrantBrief DescriptionLocationEligibility RequirementsFree Solar Panels [if eligible]
Energy Company Obligation 4 (ECO4)Targets low-income households and those on government benefits, easing the financial burden of installation.England, Scotland, WalesReceive income-related benefits, or meet local authority criteria for LA FlexYes
Smart Export Guarantee (SEG)Compensates for excess electricity exported back to the grid; does not provide free solar panels.England, Scotland, WalesHave eligible solar PV system installed and registered with a SEG licenseeNo
Home Upgrade Grant (HUG2)Assists low-income households with energy-efficient home upgrades, including solar panels.EnglandLow-income households with EPC ratings D-G, typically off gas gridNo
Public Sector Decarbonisation Scheme (PSDS)Provides grants to public sector bodies for heat decarbonisation and energy efficiency measures, including solar panel installations.EnglandPublic sector bodies in EnglandNo
Solar TogetherFacilitates reduced costs through collective purchasing of solar panels.EnglandHomeowners and renters in participating local authority areasNo
VAT Exemption0% VAT rate on the installation of solar panels in residential properties.England, Scotland, Wales, Northern IrelandResidential properties installing solar panelsNo
Scotland's Home Energy Scotland LoanOffers interest-free loans for installing solar PV systems; can be combined with cashback grants.ScotlandHomeowners in ScotlandNo
Wales's Nest SchemeProvides free solar panels to qualifying households based on income and energy efficiency assessments.WalesPrimarily available to homeowners or private renters living in energy-inefficient homes (typically rated E, F, or G) who are receiving means-tested benefits or have a household member with a chronic health conditionYes

Smart Export Guarantee (SEG)

  • What It Is?: Building on ways to reduce your energy bills and support the environment, the Smart Export Guarantee (SEG) offers a lucrative opportunity to earn money by exporting surplus solar energy. This scheme benefits you by providing financial returns for the green energy you generate but don't use yourself.
  • Key Benefits: The SEG scheme turns your solar panel installation into a source of income. By connecting your system to the national grid, any excess power that your solar panels produce gets sold back to the grid. Energy suppliers pay for every kilowatt-hour (kWh) of electricity exported, ensuring you gain from contributing to a cleaner, greener grid. This not only helps in reducing your utility bills but also speeds up the return on your investment in solar technology.
  • Eligibility: To qualify for the Smart Export Guarantee, your solar installation must meet specific criteria. Firstly, your solar PV system's capacity should not exceed 5 megawatts. Additionally, you need to ensure that your installation is carried out by MCS-certified (or equivalent) professionals, which assures that the equipment and the installation adhere to recognised standards. Only then will you be eligible to benefit from the SEG rewards, maintaining both safety and efficiency.

How to Apply for Smart Export Guarantee

Applying for SEG involves a few straightforward steps. After ensuring your solar panel system and installation are eligible, you should compare different energy suppliers' SEG tariffs to find the most advantageous deal. Once you've selected a supplier, you'll need to provide proof of your system's eligibility and sign a contract with them. The supplier will then register your system for the SEG, and you'll start receiving payments for the surplus energy you export to the grid. Remember, the exact process can vary slightly between suppliers, so it's important to consult specific guidelines provided by the energy company you choose.

ECO4 Scheme

  • What It Is?: The ECO4 Scheme emerges as another significant initiative designed to assist you in adopting solar technology while reducing energy costs. It is a government initiative designed to improve energy efficiency in low-income homes across the UK.
  • Key Benefits: The ECO4 Scheme, specifically targeting energy efficiency, offers substantial financial support to help you install solar panels at a reduced cost. By leveraging such a grant, you're not only cutting down on your initial investment but are also contributing to environmental sustainability. This scheme not only reduces your upfront costs but also enhances your home's energy efficiency, which can significantly lower your energy bills over time.
  • Eligibility: To be eligible, properties must have an Energy Performance Certificate (EPC) rating of D or lower. Households receiving certain benefits such as Income-based Jobseeker's Allowance, Universal Credit, or Pension Credit Guarantee Credit may qualify. Child Benefit recipients may also be eligible, subject to income thresholds based on the number of children and whether it's a single-parent or couple household. You can read our guide on ECO4 to find out more or chat with one of our team members to check eligibility.

How to Apply for ECO4 Scheme

Firstly, check whether you have an EPC rating of D or lower and receive one of the qualifying benefits. Once this is done, you can start the official process with us as we are now offering ECO4 funding opportunities.

Home Upgrade Grant (HUG2)

  • What It Is?: The Home Upgrade Grant (HUG2) provides free energy efficiency upgrades and low-carbon heating to eligible low-income households living in off-gas grid properties with Energy Performance Certificate (EPC) ratings between D and G. The grant aims to reduce energy bills, combat fuel poverty, and contribute to the UK's 2050 Net Zero goal by improving the energy efficiency of homes through measures such as insulation, air source heat pumps, solar panels and electric radiators.
  • Key Benefits: By providing free energy efficiency upgrades and low-carbon heating systems to eligible low-income households living in off-gas grid properties with poor energy performance ratings, these improvements can lead to substantial reductions in energy bills, increased home comfort, and a decreased carbon footprint.
  • Eligibility: To be eligible for HUG2, your property must meet certain energy efficiency criteria. Typically, homes with lower energy performance stand to benefit the most, as the grant aims to upgrade these to higher energy efficiency standards. Priority is given to lower-income households or those experiencing fuel poverty, aligning with the government’s objectives of reducing energy inequality and promoting environmental sustainability. To apply, you must contact an approved solar panel installer and undergo a home energy assessment to ascertain your eligibility and the feasibility of installation.

How To Apply For The Home Upgrade Grant

To apply for the Home Upgrade Grant, first check your eligibility: you should be a homeowner with a non-gas heating system, an EPC rating of D-G, and typically an annual household income of £36,000 or less. Then, visit the UK government website ( to use their online application service or call 0800 098 7950 for phone applications.

Your local council will contact you within 10 working days to gather more information and arrange a home survey. If eligible, they'll discuss potential improvements with you and organise the work.

VAT Exemption

  • What It Is?: The UK government has implemented a zero-rate VAT on the installation of energy-saving materials, including solar panels, in residential homes from April 1, 2022 until March 31, 2027. This zero-rate VAT applies to England, Scotland, Wales, and Northern Ireland (with Northern Ireland joining on May 1, 2023). After March 31, 2027, the VAT rate on such installations will return to 5%, which is still a reduced rate compared to the standard 20% VAT.
  • Key Benefits: It goes without saying that this reduction in tax will save you on money on solar panel installations. However, other benefits include reduced electricity costs, increased property value and reduced carbon emissions.

It is important to note that the 0% tax exemption only applies to residential properties, and businesses are still subjected to the standard VAT charge.

How Much Does It Usually Cost To Install Solar Panels?

The cost of solar panel installation in the UK can vary significantly based on several factors, including the system size, panel type, and specific installation requirements. For a typical UK household, a 4.5kW solar panel system which is suitable for a medium-sized family home, costs on average £7,100 without a battery. This price includes the cost of the panels, installation, and basic hardware.

You can read our guide on solar panel prices to find out more about the costs involved.

Investing in solar panel installation can be a significant financial commitment, but it doesn't have to break the bank. Before taking the plunge, it's worth exploring the various solar panel grants and incentive schemes available to you. These programs can substantially offset the initial costs, making solar energy more accessible and affordable. By tapping into these resources, you're not only easing the immediate financial burden but also setting yourself up for long-term benefits.

What Are The Benefits Of Applying For Solar Panel Funding?

Applying for solar panel grants offers several advantages:

  • Cost Reduction: The grants significantly decrease the upfront costs associated with purchasing and installing solar panels.

  • Increased Home Value: Solar panels can increase your property value, making it a beneficial long-term investment.

  • Energy Savings: Over time, the reduction in energy bills from using solar energy can be substantial. In fact, If you integrate solar panels at your home, you could experience a reduction in electricity bills by 50-70%. This benefit becomes more pronounced when combined with smart usage strategies like leveraging energy-efficient appliances and adjusting consumption during off-peak hours. Here's a breakdown of average annual savings based on your type of home:

✔️Detached House: You can save approximately £943.

✔️Semi-detached House: You could save around £795.

✔️Bungalow: Savings can reach up to or around £646.

✔️Terrace: You may see savings of up to or around £498.

  • Environmental Impact: By reducing reliance on fossil fuels, you contribute to lessening environmental pollution.

Expired Solar Panel Grants

The following grant schemes have historically played pivotal roles in facilitating homeowners and landlords in enhancing their properties' energy efficiency and sustainability, but have now expired:

  • The Green Homes Grant: The Green Homes Grant, a key incentive program introduced to aid UK homeowners and landlords, significantly influenced the domestic adoption of solar technologies. This scheme offered vouchers to cover up to two-thirds of the cost of eligible improvements, with a cap of £5,000. For individuals on certain benefits, this coverage increased to 100% of costs, up to £10,000. Also, participants had to engage certified tradespeople to carry out the work, ensuring quality installations. Unfortunately, the scheme closed to new applications on 31 March 2021, and all vouchers issued are no longer redeemable.

  • Renewable Heat Incentive (RHI) Scheme: The Renewable Heat Incentive was another key program aimed at encouraging the installation of renewable heating technology in UK homes. The focus was on technologies like biomass boilers, solar water heating, and certain types of heat pumps. It offered financial incentives over seven years for the heat produced by these renewable energy sources. However, this scheme closed to new applications on 31 March 2022.

  • Feed-in Tariff (FiT) Scheme: The Feed-in Tariff Scheme was one of the earliest introduced to support solar panel adoption. Homeowners, private landlords, and commercial property owners could benefit from government payments for generating their own electricity and additional payments for surplus power exported back to the electricity grid. This scheme effectively closed to new applicants from April 2019, but those already enrolled continue to benefit as per their original agreements.

Solar Panel Grants FAQs

What solar panel grants are available in the UK?

There are several grants available for solar panel installation in the UK, including the ECO4 scheme for vulnerable households, the Smart Export Guarantee (SEG) that pays for surplus energy sent back to the grid, and the Home Upgrade Grant (HUG2) for specific regions. Eligibility criteria vary, so check the specific program guidelines for your area.

How can I qualify for free solar panels in the UK?

To qualify for free solar panels in the UK through government schemes such as ECO4, you must belong to a low-income household or meet specific eligibility criteria related to income and benefits. It is advisable to check the specific requirements of each scheme as they may vary.

How much can I save on energy bills by installing solar panels?

Homeowners installing solar panels in the UK can save between £498 and £943 annually on their energy bills. Also, integrating a battery storage system with solar panels can significantly increase these savings.

What is a solar lease or Power Purchase Agreement (PPA)?

A solar lease or Power Purchase Agreement (PPA) is an arrangement where a provider installs solar panels on your property at no upfront cost. In exchange, you pay the provider for the electricity generated at a rate typically lower than the market price, which can save you money on your energy bills.

Are solar panel grants available in all UK regions?

Yes, solar panel grants and schemes are available across the UK, including Scotland, Wales, and Northern Ireland. However, some programs have regional variations, so it's essential to check local guidelines to understand the specific opportunities and requirements in your area.

How can I apply for a solar panel grant in the UK?

To apply for a solar panel grant in the UK, begin by checking your eligibility for schemes such as ECO4 or Green Home Grants. You can apply through the official websites of these programmes or contact local authorities for guidance on the application process and required documentation.

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