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What government grants are there for solar panels in the UK?

Workers installing solar panels on the roof of a building

As of March 2024, there are very limited grants for solar panels in England, Scotland, Wales and Northern Ireland. Here are the details of incentives to go green, save on electricity bills, and reduce the cost of solar panels.

0% VAT for solar panels

From April 2022 until 31 March 2027, energy-saving materials like solar panels have a 0% VAT rate.

From 1st February 2024, the UK Government is extending the VAT relief policy to cover standalone and retrofitted battery storage systems. This means that installers will continue to pay 20% VAT on goods purchased from wholesalers. But, end consumers will benefit from 0% VAT on these battery systems.

Previously the 0% VAT rate only applied when batteries were installed as part of a solar power system.

Retrofitting batteries to complement existing solar arrays allows businesses and homeowners to store excess solar energy for use during peak evening hours when solar production drops but energy needs remain high. This is especially attractive for homeowners who are away for much of the daytime.

In Northern Ireland, solar thermal and PV systems are listed as energy-saving materials (ESMs) for residential properties, so their supply and installation come with 0% VAT from 1st May 2023.

ECO4 funding

This government-funded initiative, which started in July 2022 and will run until March 2026 can provide up to 100% of the cost of solar panels for households in England, Scotland, or Wales IF they are used to power a heating system AND any of the following apply:

·      The householder earns less than £31,000 per year

·      The householder has been referred by an energy provider, local authority, or doctor

·      The householder receives certain benefits

If solar panels will only supply electricity for things like lights, TVs and computers then the grant does not apply.

The Smart Export Guarantee (SEG)

The Smart Export Guarantee (SEG) means that if solar panels generate more power than you use, large energy suppliers must pay you back for it. Different suppliers offer different rates, so it’s up to the consumer to find the best one.

Licensed electricity suppliers (those with 150,000 customers or more) are required by law to offer an export tariff for people who choose to use the SEG. This applies to every country in the UK except Northern Ireland.

Home upgrade grant

From April 2023 to March 2025, 45 local authorities in England can give grants of up to £10,000 to homeowners in their area for improvements including solar panels.

These grants are also available for insulation, heat pumps, double glazing, solar thermal and heating controls.

To be eligible, you must be a low-income household, off the gas grid, and have an Energy Performance Certificate (EPC) between D and G.

Nest scheme (Wales only) 

Welsh households can benefit from free, impartial advice on how to make their home warmer and more energy efficient and if eligible, free energy efficiency improvements including solar panels.

To qualify for Nest support, Welsh households must:

·      Own or privately rent their home

·      Have poor energy efficiency and high heating bills

·      Have one person who receives means-tested benefits or has a mental health, circulatory or chronic respiratory condition and a below-threshold income (£16,105).

Solar Electricity Grant (Northern Ireland only) 

The Solar Electricity Grant administered by the Sustainable Energy Authority of Ireland (SEAI) provides one-off grants towards the purchase and installation of solar panels for homes. 

To qualify you must:

·      Be the owner of a home built and occupied before 2021

·      Use new materials and products that were not already covered under another grant scheme

·      Use a registered company from the SEAI’s registered list of companies

·      Have the electrical works completed by a Safe Electric Ireland electrician

You must also apply for and receive a grant offer from SEAI before buying any solar panels and starting any installation work. 

There are also grants for solar PV installations for businesses including public buildings, sports clubs and community organisations available through SEAI. 

Home Energy Scotland loans and grants (Scotland only)

In Scotland, the Home Energy Scotland Loan provides interest-free loans to help finance various energy-efficient improvements and renewable systems, including solar panels and batteries.

There are loans of up to £6,000 available for solar PV systems and £5,000 for a solar battery storage system. The repayment period is between 5 - 10 years, depending on the installation.

Solar Together

Solar Together allows communities to buy solar panels at discounted prices. Households, including people living in rented properties, and small or medium-sized businesses can sign up for the scheme. Once enough people are registered in a specific area, installers can enter an auction for the right to do the job, with the lowest bid winning.

PPA schemes 

Landlords can lease their property’s roof space to a solar panel company through a Power Purchase Agreement (PPA) financing scheme. Tenants then have access to the energy the solar panels produce at a lower price than they would pay for grid electricity. 

The company that installs and maintains the panels will also be able to sell back any solar energy that goes unused.

Solar panel finance and loans

Some energy companies offer low-interest solar panel loans repayable in monthly instalments with varying interest rates and repayment periods. 

Most banks also offer personal loans for home improvements, which could be used for renewable energy systems.

While many solar power grants have come and gone, as renewable technology advances, there may be new initiatives available to homes and businesses in England, Wales, Scotland and Northern Ireland to help encourage the move towards a net zero carbon future.

Find out more

Are you ready to add renewable installation to your toolbox? Our dedicated Renewables team is your go-to for advice, training, specification and technical support. Explore the possibilities at cef.co.uk/renewables or ask in your local branch.