Solar panel loans: are they worth it?

Solar panels are an excellent way to cut your electricity costs, your reliance on the grid, and your emissions, but the price tag is a barrier for many households.

Solar panel loans allow you to save money on your energy bills without paying a large upfront cost – and thanks to the government launching the Warm Homes Loan Scheme in October 2026, you can now take out a loan with a significantly reduced interest rate.

In this article, we’ll run through how solar panel loans work, what the different types are, and how they differ from paying for solar upfront.

Sunsave is one of the Warm Homes Loan Scheme's approved lenders and installers, and we offer solar panels, batteries and EV chargers, with loan terms that last from three to 20 years. 

If you'd like to see the savings you could get from a solar & battery system, just answer a few questions below, and we’ll provide an estimate.

What is a solar panel loan?

A solar panel loan is a financial agreement that allows you to own solar panels (and often a solar battery) without having to pay the entire cost upfront.

Instead, you’ll pay a monthly amount for a set number of years – but how much you pay (and how long you pay it for) will vary depending on your chosen provider.

Some companies also ask customers to pay a portion of the sum upfront, before monthly payments begin.

Solar panel loans represent an alternative route to green energy for households that can’t afford to part with thousands of pounds at a time.

About half of UK households have less than £5,000 in savings, so the average cost of a 4.9kWp solar & battery system – roughly £12,000 – is simply too much for many.

And it makes sense that homeowners still want to switch to solar despite the upfront cost, since industry experts have said energy prices will rise in the coming years.

In October 2025, Octopus Energy’s Rachel Fletcher said domestic energy bills will likely increase by 20% over the next four years – even if wholesale prices go down.

And in February 2026, Centrica chief executive Chris O’Shea predicted that electricity will be more expensive in 2030 than it was after Russia invaded Ukraine in 2022, which deepened the pre-existing energy crisis.

Different types of solar panel loan

‘Solar panel loan’ is a catch-all term for various different forms of solar panel finance.

Here are all the main options you can choose from:

Another type of solar panel loan is to pay upfront with a credit card.

However, since the average limit in the UK is between £3,000 and £4,000 – and a typical solar & battery system for the average home costs about £12,000 – this solution is unlikely to work for many.

Warm Homes Loan Scheme

The Warm Homes Loan Scheme is a government initiative that enables homeowners and private landlords all over the UK to take out a loan with a reduced interest rate from approved lenders.

You can use one of these loans to purchase solar panels and batteries, as well as heat pumps, wind turbines, biomass boilers, heat network connections, and micro hydroelectric systems.

The scheme – which is part of the Warm Homes Plan – pays grants to approved lenders, who in turn reduce the interest rates on loans for these systems.

Sunsave is one of the scheme’s approved lenders. We offer solar panels, batteries and EV chargers, with a variety of loan terms that last anywhere from three to 20 years.

If you do choose Sunsave, we’ll be your installer and your lender in one, setting us apart from installers that partner with a separate finance provider. 

This means you won’t have to deal with two different companies, so there'll be less for you to chase, and fewer things that can go wrong. As it stands, we're the scheme's only approved lender that can offer this.

We also offer a 0% interest rate on our three-year loans.

If you'd like to see the savings you could get from a solar & battery system, just answer a few questions below, and we’ll provide an estimate.

Direct government loans

Homeowners in Scotland and Wales can go straight to the government for solar panel loans, thanks to the Home Energy Scotland Grant and Loan scheme and Green Homes Wales.

This sets these initiatives apart from the UK-wide Warm Homes Loan Scheme, which operates through approved lenders.

To learn more about these programmes, check out our guide to solar panel grants.

Home Energy Scotland Grant and Loan scheme

This scheme provides Scottish homeowners with interest-free loans for hybrid solar panels and solar thermal systems, among other home improvements.

The government used to include solar panels and batteries in its list of eligible measures, but dropped the pair in June 2024.

Applicants can currently secure a £5,000 interest-free loan to get either solar thermal panels – which use the sun’s energy to heat your hot water supply – or hybrid panels, which produce hot water and solar electricity.

The government isn't currently giving out grants for solar installations.

Other available measures include heat pumps, loft insulation, and biomass boilers – all of which are eligible for loan and grant funding.

To apply, you can either call Home Energy Scotland on 0808 808 2282, or fill in your details here and ask to be contacted via email.

Green Homes Wales

If you're a homeowner in Wales, you may be able to get an interest-free loan of up to £25,000 for measures including solar panels and batteries.

And if you get a loan through the scheme, your repayments won't start until the first six months have passed.

You won't necessarily be able to get your desired improvements, though. An expert will assess your home and draw up a list of measures that would best suit your home, then you have to choose from this list.

If they don't recommend solar panels for your home, you can't go solar through the scheme.

To register your interest, you can fill in this online form with your name and contact details, as well as your property's age, type, and listed or conservation status.

Standard solar loans

If you approach a lender who's not approved under the Warm Homes Loan Scheme, they'll offer you solar panel finance that doesn't include a government-funded lower interest rate.

Some of them will still provide low-interest or even interest-free loans, but it's best to be wary of these and check a few things before signing anything (more on this below).

Green mortgages

A green mortgage provides customers with a financial incentive to either buy an energy-efficient home, or take steps to boost its energy efficiency after moving in.

Eligible homeowners can secure a lower interest rate on their mortgage, receive a cashback payment, or get an interest-free loan.

Some examples include Co-op’s offer of at least £5,000 of additional borrowing, Nationwide’s £5,000-£20,000 of interest-free borrowing, and Coventry Building Society’s £25,000 of additional borrowing alongside a lower interest rate.

For more information, read our guide to green mortgages and greener home rewards.

How much does a solar panel loan cost?

There are multiple solar panel loans that come with no upfront cost, which could be appealing if you don’t have the money on hand to switch to solar with one lump sum.

This would also give you all the benefits of going solar – like more energy independence, export income, access to time-of-use tariffs, virtual power plants (VPPs), and potentially increasing your property’s value – without needing a load of money in the bank.

The overall cost of a solar panel loan will usually be more expensive than paying upfront due to interest payments, but it's worth looking at the bigger picture.

If the loan spreads out the cost of your system over an especially long period of time, this could mean your energy bill savings exceed your monthly payments.

If you take out a shorter loan, you’ll generally have to pay a much higher monthly rate, albeit for less time.

What does ‘APR’ mean?

APR stands for Annual Percentage Rate, which shows you how much you’ll pay per year, as a percentage of the amount you'd be borrowing.

You should compare different loans by their APRs, not their interest rates, since an APR involves all fees involved in the loan – including the interest rate.

It’s the best way of comparing apples to apples, and there’s a simple way of deciding which APR is better: the lower it is, the lower the cost of borrowing.

However, there are lots of other factors to consider before making your final decision, not least what you’re actually receiving for your money (more on this further down).

Can you get interest-free solar panel loans?

You can get a solar panel loan with 0% interest if you get a three-year loan with Sunsave.

This is thanks to the Warm Homes Loan Scheme, which provides the funding that allows us to cut the interest rate on these loans to zero.

The government requires approved lenders to provide pricing and interest rate data for scheme-supported products, in order to guard against price hikes.

Outside of the scheme, lenders can offer a 0% interest loan while also raising the price of the system, making the overall cost just as high – but structured in a way that initially seems more enticing.

Fortunately, we've achieved a 0% interest rate through government funding, not by increasing our prices.

How long does a solar panel loan last?

Solar panel loans tend to range from one or two years to 10 years, though some providers – like Sunsave – offer loans as long as 20 years (more on this further down).

Some providers give you the option of choosing your own repayment period, although this will typically still fall within this range.

Most solar panel loans offer the ability to settle early, but it’s important to check if your provider will charge you a fee for doing this.

Are you eligible for a solar panel loan?

When assessing your eligibility criteria for a solar panel loan, lenders will focus on two key things.

1. Affordability – to check the loan is sustainable for your budget, which includes reviewing your income, employment and expenditure. 
2. Creditworthiness – to check the risk of lending to you, which includes reviewing your credit history.

A lender will check both of these things using their own data sources (such as credit agencies), but if they’re unable to verify something then they will reach out to you for extra documents. 

To apply for a solar panel loan you will also need to be at least 18 years old, be a UK resident, and own the property that you want to put the panels on.

How do solar panel loans affect your credit score?

Like any other loan, solar panels loans can affect your credit score.

If you keep up with your payments, you’ll build up a record of being a good payer, which can help improve your credit score. Naturally, if you miss payments, this could lower your score.

Your lender will regularly report your payment history to credit agencies, so your score will be affected either way.

Most lenders also perform a soft credit check before deciding whether to offer you a loan. This is a quick, common eligibility assessment that won’t affect your credit score.

However, lenders also carry out a hard credit check shortly before issuing your loan, which will cause a slight dip in your credit score. This is normal and temporary.

How to choose a solar panel loan

When you’re weighing up the pros and cons of different solar panel loans, there are several important factors to consider.

Here are the main points to bear in mind while you’re talking to lenders:

1. Look for FCA regulation
2. Avoid roof leases
3. Look for fixed fees
4. Look for maintenance support
5. Avoid early repayment fees

1. Look for FCA regulation

First and foremost, you should ensure the company is fully regulated by the Financial Conduct Authority (FCA).

If the organisation is acting as a broker for a third-party lender, make sure you get their FCA number and check the FCA register, as this will show their permissions. You should then also check that the lender is FCA-regulated. 

Sunsave is fully authorised and regulated by the FCA, and so our Consumer Duty requires us to deliver good outcomes for our customers.

In practice, what this means is that we sufficiently understand our consumers’ needs, we can demonstrate fair value between the price our consumers pay and the benefits they receive, our content is clear and not misleading, and that our consumers’ needs are fulfilled throughout the lifetime of our product.

2. Avoid roof leases

Solar panel loans sometimes involve customers leasing their roof (or airspace) to a company, which effectively means giving up control of your roof. These are sometimes known as 'rent-a-roof schemes'.

Some roof leases force you to get permission from the company to make changes to your home – like an extension, loft conversion, or new roof – and to reimburse them for any missed export payments or lost electricity generation that happens because of building work.

It can also affect your chances of selling your home. Some mortgage lenders are wary of roof leases, as it may prevent them from repossessing the property in the event of a mortgage default.  

You may also find some homebuyers avoid properties with roof leases, especially if they’d ideally like to make changes to the home in future.

The company will own your solar installation, which can sometimes mean missing out on hundreds of pounds in export payments every year.

And given how many people signed solar roof lease contracts in the 2010s, there are still people now who are trapped in these agreements for many years.

It’s also worth noting that some companies that offer roof leases aren’t regulated by the FCA, which means they don’t have to meet the FCA’s high standards when it comes to treating customers fairly.

For more information, read our guide to why Solar & Battery Plus does not require a roof lease.

3. Look for fixed fees

It’s important to make sure that your solar panel loan comes with a fixed interest rate, which means your monthly payments will be the same for the entirety of your contract.

If your loan has a variable interest rate, this makes it harder to plan your budget and can result in you paying considerably more by the end of your loan.

With Solar & Battery Plus, our interest rate is completely fixed for the full term, which means your monthly payments will never increase, protecting you from energy bill inflation.

Maintenance support is crucial in ensuring your solar & battery system continues functioning at its full capacity – or indeed, keeps working at all.

For example, a solar installation can only produce usable electricity if the inverter is doing its job – and a 2023 study by Bern University of Applied Sciences found that 34% of inverters fail by year 15.

This aligns with what you see in the market today, where the majority of string inverters have a standard warranty of about 10-12 years.

Batteries are also a key part of a system. With them, you can use more of the electricity your panels produce, and benefit from the best export tariffs, time-of-use tariffs, and virtual power plants.

That’s why about 94% of new solar panel installations in the UK include a battery, according to data from Flexi-Orb and EPVS – but battery lifespans are generally around 10-12 years.

After this point, your battery will probably have degraded to such an extent that it makes sense to replace it.

However, when inverters and batteries start degrading significantly, it can be difficult for owners to spot the problems unless they’re trained professionals.

And once you do realise something’s wrong, the cost, hassle, and time it takes to find and hire a local engineer will compound the losses you’ve already made from your system not working properly.

It’s therefore vital to look for a loan that includes maintenance support, to avoid this major hidden cost of going solar.

Issues with the panels are less common, but if something does go wrong – from improper installation to birds damaging the wiring – you’ll also want it fixed as soon as possible.

Every Solar & Battery Plus system is covered by the Solar & Battery Guarantee for the full length of your contract. This includes 24/7 monitoring, maintenance, free replacement parts, and downtime credit.

Your system will also be insured by Aviva against damage, fire, and theft. 

To learn more, check out our full guide to the Solar & Battery Guarantee.

5. Avoid early repayment fees

If you pay off your loan before the end of your contract, some providers may charge you an early repayment fee.

Fortunately, there are companies that’ll allow you to conclude your contract whenever you want, as long as you pay the remainder of the amount you borrowed.

Just make sure to check any provider’s terms and conditions to find out about its early repayment policy.

If you pay up early with Solar & Battery Plus, you won’t incur any fees, charges, or penalties.

However, if you do make a full early repayment, you’ll no longer be covered by the Solar & Battery Guarantee.

Solar & Battery Plus vs a traditional solar loan

Solar & Battery Plus is fundamentally different to a traditional solar loan. While you’re paying back the cost of the system, you also benefit from a full maintenance support package that includes free replacement parts.

And with the ability to spread your payments across up to 20 years, you could save more than you spend, depending on your circumstances.

You'll also benefit from Sunsave Sona, our smart algorithm that maximises your returns by optimising how you use your battery.

Let's run through how that works.

Solar & Battery Guarantee

On a 20-year term with Solar & Battery Plus, your system will be protected by the Solar & Battery Guarantee, meaning you can rest assured it'll keep performing for the full length of your contract.

The Solar & Battery Guarantee will provide you with 24/7 monitoring, maintenance, free replacement parts, and downtime credit.

Your system will also be insured by Aviva against damage, fire, and theft.

We know that uneasiness about maintenance can be a key sticking point for anyone who isn’t sure about solar. A 2021 government study found that 55% of people in the UK who don’t want solar panels attribute their reluctance to maintenance concerns.

Sunsave Sona

Sunsave Sona is our smart algorithm, which constantly works in the background to save you as much money as it can.

It's available to all our Solar & Battery Plus customers, and comes with two main benefits: intelligent scheduling and our virtual power plant.

Intelligent scheduling involves your battery buying grid electricity when it's cheapest, and exporting when it's most profitable for you.

Sunsave Sona will also learn your electricity usage patterns, meaning it'll know how much energy to provide you with at different times of the day and week.

And it'll take weather forecasts into account, to predict how much electricity your panels produce, and how renewable energy production will affect grid electricity prices.

You'll also gain entry to our Virtual Power Plant, which is a network of our customers’ batteries, working together to help balance the grid and earn money for every household involved.

By joining this group, you can benefit from energy trading markets you wouldn’t be able to access on your own – and we make guaranteed payments every month.

We currently guarantee a minimum monthly payment of £15 for the first 18 months to Solar & Battery Plus customers.

The global VPP market is reportedly set to become increasingly profitable, with experts predicting that it’ll be five times as valuable in 2033 as it was in 2025.

This doesn't mean that your VPP earnings will automatically rise as time goes by, but it's a good indicator.

More money in your pocket

Solar & Battery Plus should immediately start saving you money on your energy bills (though savings will vary), and make you additional income from all the electricity you export to the grid.

In many cases, your combined energy bill savings, VPP earnings, and export income can exceed your fixed monthly payment. This would be a net saving – an instant, clear return.

And even if you don’t see net savings in the first year, it’s possible that you’ll start to see them after. Multiple industry experts expect energy bills to keep rising.

But while energy bills rise, your payment to Sunsave will never increase for the full term.

To read all about Solar & Battery Plus customers who are saving money, check out our reviews page.

Flexible payments

With Solar & Battery Plus, you're free to make a partial or full early repayment whenever you choose, as many times as you like.

This process is simple and there are no early repayment fees or penalties.

A partial early repayment is where you pay off a portion of your outstanding credit amount, meaning your interest would accrue on a smaller remaining balance, so you'd pay less in total.

You can choose between a shorter term length with the same monthly payment, or the same term length with a smaller monthly payment.

And you're free to pay off the vast majority of your credit amount while keeping the long-term protection of the Solar & Battery Guarantee. You can reduce up to 98% of your outstanding credit amount, and still be protected.

As long as you’re paying at least £1 per month towards your credit amount – which doesn't include your monitoring and maintenance fee – the Solar & Battery Guarantee will stay in place.

Are solar panel loans worth it?

Solar panel loans can benefit households that aren’t able to afford the steep upfront cost of a system.

Depending on your installer, you can instantly start saving on your electricity bills, exporting excess electricity to the grid, and join a VPP – all for no (or little) upfront cost.

And with the Warm Homes Loan Scheme, you can get a loan at a lower interest rate, meaning you'll pay less per month and overall.

Sunsave is one of the scheme's approved lenders, and we offer solar panels, batteries and EV chargers, with loan terms that last from three to 20 years.

If you do choose Sunsave, we’ll be your installer and your lender in one, setting us apart from installers that partner with a separate finance provider.

On a 20-year term, your system will also be covered by the Solar & Battery Guarantee for the full length of your contract, which includes 24/7 monitoring, maintenance, free replacement parts, and downtime credit.

If you'd like to see the savings you could get from a solar & battery system, just answer a few questions below, and we’ll provide an estimate.

Solar panel loans: FAQs