The 9 best solar panel grants & funding options

Going solar is an extremely effective way to cut your electricity bills, but not everyone can afford the steep upfront cost – especially low-income households which are struggling the most.

Thankfully, there are plenty of grants, incentives, and alternative funding options that certain homes can access.

In this guide, we'll run through all the various initiatives, identify which households are eligible, and consider whether a solar subscription like Sunsave Plus could be the answer for you.

If you're curious about how much money a solar & battery system could save you on your energy bills, just provide a few quick details and we'll give you an estimate.

Are there any grants and schemes for solar panels?

There are grants and schemes that can wholly cover the cost of solar panels, but it depends on your circumstances.

Low-income and energy-inefficient households can access one of these initiatives, as long as they're electrically heated, not connected to the gas grid, in social housing, or located in Wales.

Other schemes provide incentives including loans, discounts, and cashback payments. Their eligibility requirements and end dates vary.

And in good news for everyone, all homes can access the current 0% VAT rate on domestically installed solar panels and batteries.

These initiatives are all built to get more households running on solar electricity, which cuts their bills and the nation's carbon emissions.

If you think you're not likely to qualify for any of these grants but are concerned about the upfront cost of solar panels, you should consider a solar subscription.

Here's a summary of the nine key grants and schemes:

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

You may qualify for free solar panels if you're eligible for assistance through the ECO4 scheme or Home Upgrade Grant, which are both national, government-backed programmes.

Unfortunately, these initiatives come with specific criteria that only a small minority of UK households fulfil.

We'll go into detail about these requirements further down the article.

What if I don’t qualify for any solar grants or schemes?

If you don't qualify for any solar panel grants, there's another way to start benefiting from solar electricity with no upfront cost.

Sunsave Plus, the UK’s first solar subscription, will provide you with best-in-class kit, all in one easy solar & battery package that comes with a 20-year Sunsave Guarantee.

Your installation will be tailored to your home, work seamlessly, look excellent, and save you money from day one.

What is ECO4?

The fourth phase of the government's Energy Company Obligation (ECO) scheme, which aims to reduce fuel poverty and carbon emissions across Great Britain, began in July 2022.

The initiative compels energy suppliers with more than 150,000 customers – like British Gas, Octopus, and OVO – to carry out domestic energy efficiency measures such as solar panels, heat pumps, and insulation in disadvantaged households.

These improvements must increase each home's Energy Performance Certificate (EPC) rating. For example, households in Bands F and G must reach a D for the project to count towards a supplier's total number of homes helped.

ECO4 is funded with £4 billion of government money, and is set to run until March 2026.

As of July 2024, suppliers have implemented 484,738 measures under the scheme, including more than 25,000 solar panel system installations.

Who is eligible for ECO4?

You can qualify for ECO4 if you’re a homeowner, private renter (with your landlord's permission), or social housing tenant.

You must also receive at least one of the following means-tested benefits:

• Pension Credit
• Universal Credit
• Income-based Jobseekers Allowance
• Income-related Employment & Support Allowance
• Income Support
• Housing Benefit
• Child or Working Tax Credit
• Child Benefit (with an annual income below specified thresholds, depending on who lives with you)

If you live in social housing and your property has an EPC rating of D, E, F, or G, you can also qualify for ECO4 measures.

And if you're not claiming the above benefits but earn under £31,000 per year, have health conditions worsened by a cold home, or are vulnerable to the effects of living in a cold home, you may also be able to qualify through your council's ECO4 Flex programme.

In the end though, suppliers will decide which measures – if any – to offer your household, so make sure you get multiple companies to assess your needs and propose improvements.

To get solar panels, you must use an electric heating system.

How much money can ECO4 save you?

The amount of money you can save with ECO4 varies depending on the changes a supplier chooses to make.

However, the grants given under the ECO4 scheme can be substantial, potentially covering the entire cost of a new solar panel system and other eco-friendly improvements, which can make a big difference to your energy bills.

How to apply for ECO4

To apply for the ECO4 scheme, you’ll first need to find out whether you’re eligible, which you can do by completing this Ofgem questionnaire.

If you are eligible, get in touch with one (or a few) of the energy suppliers in the ECO4 scheme. You don't have to go with your current energy supplier; you can choose any of the companies involved.

What are the most common ECO4 home improvements?

The most common ECO4 home improvement by far is heating controls, which is a relatively cheap improvement that suppliers can make quickly and easily.

Insulation and boiler upgrades are the next most frequent improvements, followed by solar panel systems.

These measures are followed by other heating system upgrades, including storage heaters and a district heating connection.

Most popular ECO4 home improvements, July 2022-July 2024

What is the Home Upgrade Grant?

The Home Upgrade Grant is a £700 million government initiative that provides local authorities across England with funding to make energy-efficient upgrades in homes that aren't connected to the gas grid.

As well as solar panels, the grant supports a variety of energy-saving improvements like insulation, air source heat pumps and storage heaters.

Only a select number of places are awarded funding every couple of years, so make sure you live in one of the successful local authorities.

Who is eligible for the Home Upgrade Grant?

To be eligible for the HUG, you must:

• own and live in the property you want to improve
• not use a gas boiler as your household's main heating system
• have an EPC of D, E, F, or G
• have an annual household income of £36,000 or less – though this limit is higher in some areas

How much money can the Home Upgrade Grant save you?

Homes helped by the Home Upgrade Grant can save significantly on their energy bills, though the exact benefit you receive will depend on your specific circumstances.

Solar panels, insulation, and heat pumps can all save you hundreds of pounds per year though, so it's certainly worth applying if you think you might be eligible.

How to apply for the Home Upgrade Grant

First, you should check that your local authority has Home Upgrade Grant funding to hand out. It's only available in certain areas in England, so contact your council to make sure.

During this conversation, you should also ask about your local authority's eligibility criteria, as the maximum household income can differ from place to place.

If you’re eligible, your local authority will arrange a home survey to assess potential energy efficiency improvements.

What is the Smart Export Guarantee?

The Smart Export Guarantee (SEG) is a government-backed initiative that forces large energy suppliers to pay British households for the electricity they send to the grid, via an export tariff.

This scheme launched in January 2020, following the end of the Feed-in Tariff (FIT).

An export tariff can't reduce the upfront cost of going solar, but it can ensure you maximise your profits once you have panels on your home.

Who is eligible for the Smart Export Guarantee?

To be eligible for SEG payments, you need to generate electricity with one of the following systems:

• Solar panels
• Wind turbines
• Hydroelectric systems
• Micro combined heat and power (micro-CHP)
• Biochemical processes like anaerobic digestion

Your installation can have a maximum capacity of up to five megawatts (or 50 kilowatts for micro-CHP), and you’ll need a smart meter to record how much electricity you export.

Make sure you use a reputable installer like the ones included in our list of the best solar panel installers, as your system must be certified to be eligible for SEG payments.

How much money can the Smart Export Guarantee earn you?

Your average SEG earnings will vary depending on the export tariff you choose, how much solar electricity your system produces each year, and your electricity consumption patterns.

Depending on the tariff you choose, you may be paid monthly, quarterly, or annually.

You'll likely receive your earnings via a bank transfer, unless your export tariff supplier is the same as your import supplier – in which case the money will usually be taken off your energy bill each month.

You can combine SEG with other grants and financial support, except if you’re already receiving FIT export payments. You'll need to opt out of your FIT export payments before you can start receiving SEG earnings.

How to apply for the Smart Export Guarantee

Just contact any of the energy suppliers currently offering an export tariff, and follow their guidance to sign up.

The whole process can take up to 11 weeks if you're not fast-tracked, but after that, you can sit back and watch your earnings roll in.

Check out our regularly updated page on the best SEG rates to find the ideal tariff for you.

What are solar panel loans?

Solar panel loans allow you to get solar panels without having to pay anything upfront – though they don't usually come with any monitoring or maintenance.

Instead, you'll pay a monthly amount that covers the cost of the system over a period of years, along with – in most cases – an additional interest payment.

Sunsave Plus is a different prospect. It's similar to a solar panel loan, in that you'll pay a monthly amount, but it's a solar subscription, which makes it a superior product.

You'll have longer to pay off the cost than you would with the vast majority of loans, and it comes with the Sunsave Guarantee.

This aftercare and support package includes 24/7 monitoring and maintenance, troubleshooting of any issues, downtime protection, and Aviva-backed insurance against damage, fire, and theft.

You can also look forward to a free battery and inverter replacement, which you won't find with most solar panel loans.

Who is eligible for solar panel loans?

To be eligible for a solar panel loan, you generally need to meet certain criteria. For instance, you usually have to own your home, fall in a certain age range, and be a UK resident.

In the case of Sunsave Plus, your application can have up to two applicants, and must fulfil these criteria:

• The lead applicant must be an owner of the property
• At least one applicant must be between 18 and 60 years old
• Both applicants must be UK residents

You won’t be eligible for Sunsave Plus if you’ve been declared bankrupt or received a county court judgement.

How much money can solar panel loans save you?

Solar panel loans can't save you any money by themselves, but they allow you to avoid paying the full cost of your solar panel system upfront – and they can enable you to save in other ways.

After all, you can take the money you would've spent on solar panels and invest it elsewhere, which could result in you generating considerable amounts of revenue over 20 years.

Thanks to the Sunsave Guarantee, Sunsave Plus can also save you money in ways most solar panel loans can't – for instance by supplying a free replacement battery and inverter, insurance, and monitoring and maintenance.

How to apply for a solar panel loan

Most solar panel loan providers simply require you to fill in an online application.

If you fulfil the company's initial requirements, you'll just need to choose the amount of time you want your loan to last for – usually three to 10 years – and complete a credit application.

You can apply for Sunsave Plus in much the same way, except it lasts for 20 years.

It's the UK’s first solar subscription rather than a solar panel loan, so it also comes with extra features, like a monitoring and maintenance package.

What are green home rewards?

Green home rewards are cashback schemes offered by banks including Barclays, Halifax, and Lloyds to their own mortgage customers.

To qualify, homeowners with these banks have to sign up for the relevant scheme and make a qualifying energy-efficient improvement to their properties.

Nationwide also has a green home reward scheme, but it's slightly different: customers can qualify for cashback not through eco-friendly measures, but simply by getting a mortgage on a property with an EPC rating of A or B.

Who is eligible for green home rewards?

Anyone who mortgages or remortgages their property with Barclays, Halifax, or Lloyds – and anyone who gets a mortgage with Nationwide – is eligible for a green home reward.

If you buy a home with a Nationwide mortgage that has an EPC rating of A or B, you will automatically receive your reward.

Nationwide will check your new home's EPC rating two weeks after it confirms your mortgage is in place, so there's no time to make improvements. To qualify, you just have to find a property that's already energy-efficient.

How much money can green home rewards earn you?

Green home rewards can earn you between £250 and £2,000, depending on the measures you take and the financial institution you choose to be your mortgage provider.

Halifax and Lloyds pay cashback amounts between £500 and £1,000 for installing a variety of measures from solar panels and heat pumps to double glazing and loft insulation.

Barclays' Greener Home Reward initiative comes with similar cashback amounts – except it goes as high as £2,000 for certain improvements.

Nationwide's scheme gives new mortgage holders £500 if the property has an A-rated EPC, or £250 if it has a B-rated EPC.

How to access green home rewards

You can only access Halifax and Lloyds' green home rewards if you apply directly for one of their mortgages – in a branch, over the phone, or online – instead of going through a broker.

Every year, Halifax and Lloyds create an 11-month qualifying time period, so make sure to send in your mortgage application during this time, then register for a green home reward within the next month.

If you have a Barclays mortgage, there are no time limits on when you can apply for the bank's Greener Home Reward programme.

You shouldn't even need to apply for a Nationwide Green Reward cashback, but it's worth bringing up the initiative to a representative during the mortgage application process, just in case.

What is the solar VAT discount?

The solar VAT discount is a policy enacted by the government to lower the VAT rate on materials and installation costs for energy-efficient measures to 0% until April 2027.

By reducing the upfront costs of installing solar panels and other energy-saving materials, the initiative aims to encourage households to switch to green energy.

In February 2024, this 0% rate was expanded to include standalone storage batteries.

Who is eligible for the solar VAT discount?

Everyone is eligible for the solar VAT discount – all you need to do is buy a qualifying product.

It applies automatically if you buy any of the following:

• Solar panel system
• Solar battery
• Air, ground, or water source heat pump
• Micro-CHP system
• Heating controls
• Insulation
• Smart diverters
• Wind turbine
• Water turbine
• Wood boiler

How much money can the solar VAT discount save you?

This discount can lead to big savings. Energy-efficient materials used to be taxed at 20%, but if you were on benefits or the materials cost less than 60% of the installation, the rate was reduced to 5%.

With the introduction of the 0% VAT rate, the average three-bedroom household can save around £450 when buying a new 3.5kWp solar & battery system.

The discount of course varies for different households, depending on the price of your system.

How to access the solar VAT discount

There is no specific application process for the solar VAT discount, as it’s automatically applied at the time of purchase​.

What is the Welsh Government Warm Homes Programme?

The Warm Homes Programme is a refresh of the Welsh government's Warm Homes Nest Scheme, which ran from 2011 to 2024, spending £440 million to help more than 77,000 homes.

Starting in April 2024 and running until at least 2032, this new initiative is more focused on improving Welsh households' insulation levels and installing modern innovations like heat pumps, rather than old solutions like gas boilers.

It's also focusing more on solar installations, which made up 18% of measures in 2022/23, under the previous scheme.

Who is eligible for the Welsh Government Warm Homes Programme?

You may be eligible for the Warm Homes Programme, as long as you:

• Own or privately rent your home
• Have an EPC rating of 54 (E) or lower; or 68 (D) or lower if a member of your household has a chronic circulatory, respiratory, or mental health condition
• Live in a low-income household or receive a qualifying means-tested benefit (see the list below)

The following benefits are eligible:

• Child Tax Credit
• Council Tax Reduction
• Housing Benefit
• Income-based Jobseeker’s Allowance
• Income-related Employment and Support Allowance
• Income Support
• Pension Credit
• Universal Credit
• Working Tax Credit

How much money can the Welsh Government Warm Homes Programme save you?

The Warm Homes Programme can save you thousands of pounds by fully funding the installation of measures from solar panels and heat pumps to insulation.

And once these improvements are in place, they can cut your energy bills by hundreds or even thousands of pounds per year.

How to apply for the Welsh Government Warm Homes Programme

To apply for this scheme, just call 0808 808 2244.

A staff member will ask you some questions to work out if you qualify, guide you through uploading evidence to prove your eligibility, and talk you through the measures you can access.

You can even apply on behalf of someone else, as long as they give their verbal consent while you're on the phone.

The whole process typically takes 30-40 minutes.

You'll then be able to arrange for British Gas to install any measures you've agreed upon.

What are social housing PPA schemes?

Social housing Power Purchase Agreement (PPA) schemes are lease agreements between renewable suppliers and social housing providers for a property’s roof space for a set number of years.

These schemes typically involve a third-party company that finances, installs, and maintains the solar panels on the roofs of social housing properties.

In exchange, the tenants can get electricity from these panels at a cheaper rate than buying it from the grid. 

The third-party provider can also sell any excess solar electricity to the grid, and reap the rewards.

For example, this has taken place in London, when the City of London council partnered with Voltalia in 2020, and in Newport, when Newport City Council partnered with Egni Co-op in 2021.

Who is eligible for social housing PPA schemes?

As the PPA scheme is a business-to-business arrangement, it's only available to social housing providers or landlords directly.

How much money can social housing PPA schemes save you?

As a tenant, you’ll enjoy cheaper electricity, potentially adding up to hundreds of pounds in savings over the lifespan of the contract and/or panels.

The company involved can change the price of your electricity at any time​, but it should always be cheaper than the rate you'd pay otherwise.

How to apply for social housing PPA schemes

There's no direct application process for tenants. Instead, social housing landlords need to enter into a PPA with a specialist provider.

What is Solar Together?

Solar Together is a company that organises group-buying programmes which allow households to buy and install solar panels at a much lower cost than the average market price.

The scheme works by getting multiple homes in the same area to express an interest in going solar.

Solar Together then arranges an auction, in which solar panel companies each enter the amount they'd charge to install all the systems.

The lowest number wins, and the cost is shared by every household that chooses to move forward with their installation.

Who is eligible for Solar Together?

The scheme is open to homeowners, small or medium-sized businesses, and tenants (with their landlord’s permission).

However, it’s not available in every area. Check with Solar Together if your region is currently accepting sign-ups.

How much money can Solar Together save you?

The scheme benefits from group purchasing power and competitive bidding, so you can expect to knock off around 30-35% of a solar PV system’s typical market price.

Registration for Solar Together is free, and there's no obligation to proceed with an installation. The costs involved are only for the purchase and installation of the solar panel system.

How to apply for Solar Together

The first step is to check on the Solar Together website if a scheme is running in your area. You can either register online or add your details to a waiting list to be notified when it becomes available in your region.

During the application process, you’ll need to provide details about your house, roof space, and typical electricity usage.

These will be used to send you a personal recommendation for the solar installation after the auction.

What is the Home Energy Scotland Grant & Loan?

The Home Energy Scotland Grant & Loan scheme is a Scottish Government initiative providing grants and interest-free loans to create warmer, more energy-efficient homes.

Unfortunately, it no longer offers grants and loans towards the purchase of solar panels or batteries, as of June 2024. It's now focused on getting heat pumps and insulation into Scottish homes.

Next steps

There are several grants and initiatives to help make the cost of solar panels more affordable – and profitable – for households all over the UK.

However, all of the best options – like the Home Upgrade Grant, Welsh Government Warm Homes Programme, and ECO4 – are targeted at the most disadvantaged households on these shores, and have stringent criteria as a result.

Most other grants don't properly address the biggest barrier: the upfront cost. The Smart Export Guarantee, Green home rewards, and even the VAT discount are worthy initiatives, but they're incentives rather than a proper solution.

If you want to avoid the high upfront cost of solar panels, you should find out Sunsave Plus will work for you. To sign up for the UK's first solar subscription, enter a few details below and we'll be in touch.

Solar panel grants: FAQs