While many of us are considering installing solar panels to power our homes, others may be intimidated by the fact that they may be complicated or expensive to install.
While you’ll likely have to shell out a few thousand pounds for solar panels, the UK government has prepared funding programs to support households who wish to adopt a greener power source.
So, if you wish to have solar panels installed at home without having to fret about funding, here is a guide on the financial grants available for installing solar panels!
The Different Solar Panel Grants in the United Kingdom
Promoting renewable energy sources has become one of the main agendas of the government for years. This aligns with Europe’s Renewable Energy Directive to reach a 32% renewables target by 2030.
With this, the UK government actively supports individuals aiming to have a solar PV panel system to generate electricity for their homes by introducing subsidies or grants for solar panels.
Commonly, these grants cover the purchase and installation of solar PV panels and solar panels systems to encourage energy efficiency improvements among households.
This is a great help for families who wish to resort to renewable energy sources instead of being limited to grid-based energy suppliers. The question is, are you eligible to avail of such grants? If so, how can you apply?
Determine your eligibility for these six solar panel grants as you read through what they offer below!
1. Smart Export Guarantee (SEG)
The Smart Export Guarantee (SEG) has supported households since January 2020, allowing them to earn money from the solar panel system installed in their homes.
This solar panel grant is unlike other funding programs that lessen the upfront cost paid when installing solar panels. It instead provides an alternative for consumers to reimburse their investments.
The SEG Scheme requires energy suppliers to pay homeowners for unused solar-generated electricity. In this case, the consumers feed the unused power back from their solar panels to the National Grid.
Under this solar panel grant scheme, you will be paid for every unit of EXCESS electricity you channel back to the National Grid.
The Smart Export Guarantee is not a direct government grant for solar panels. But, it strictly requires local energy suppliers with over 150,000 consumers to offer an export tariff and incentivise surplus energy.
How Does Smart Export Guarantee (SEG) Work?
As a generator, you can scout for a Smart Export Guarantee Licencees offering great reimbursement deals, specifically the price per kWh of excess energy exported.
On average, the price will range between £1 to £7 per kWh. An energy supplier may also charge a special price for energy exported from solar battery storage systems.
Who Is Eligible and How to Apply
Every homeowner can apply under the SEG solar panel funding if they own a regular solar panel system with up to 5MW capacity.
It’s also crucial that the house is fitted for the installation of a smart metre to measure the exported excess energy.
If you are eligible, you can proceed with your application and become an SEG generator for your chosen licensee.
Take note that energy providers may have distinct application processes. Make sure you comply with their requirements.
Before proceeding with the application process, you must ensure that the solar panels installed in your home are ENERGY-EFFICIENT and tailored to your home’s needs. If not, you might be applying with unfit solar panels.
2. Energy Company Obligation Scheme (ECO4 Scheme)
Another grant you can avail of for solar panel installation is the UK government’s Energy Company Obligation Scheme (a.k.a ECO4 scheme).
This grant for solar panels was launched last April 2022, replacing the ECO3, and will run until March 2026.
Here, the government allocated 4 billion pounds — spread to 1 billion per year — to improve the energy ratings of homes in the UK and reduce carbon emissions.
Under its predecessor (ECO3), only energy suppliers with over 150,000 users are obliged to support eligible applicants. However, in the ECO4 scheme, the UK government aims to include smaller energy companies by removing the threshold.
How Does ECO4 Work?
The Energy Company Obligation (ECO4) scheme was effected on July 27, 2022. However, it covers eligible measures installed from April 2022 to March 2026.
ECO4 supports LOW-INCOME households in replacing ineffective and inefficient heating systems with environment-friendly options, like solar PV panels, heat pumps, and biomass boilers.
Energy companies can offer subsidies depending on their market share. Hence, the amount you can get from one energy supplier to another varies.
Luckily, you can choose which electricity supplier you prefer, so we suggest researching how much help they’re offering and if they can cater to your target solar panels’ cost.
Here are some of the energy companies currently offering ECO4 grants for solar panels:
- British Gas
- EDF Energy
- Octopus Energy (including Co-op Energy)
- Outfox the Market
- Ovo Energy (including Boost and SSE)
- Scottish Power
- Shell Energy
- So Energy
- Utility Warehouse
Who Is Eligible and How to Apply
The ECO4 scheme is available to all UK homeowners, whether they own or lease the house.
Aside from homeowners coming from low-income households, landlords and private tenants can also seek support from this solar panel grant.
It also caters to people receiving income-related benefits and properties with inefficient heating systems.
However, applicants must meet other specific criteria to be successfully granted. Qualifying benefits for the ECO scheme include:
- Jobseekers Allowance (JSA), income-based
- Employment and Support Allowance (ESA), income-related
- Housing Benefit
- Pension Credit
- Income Support (IS)
- Universal Credit (UC)
- Work Tax Credit (WTC)
- Warm House Discount Scheme Rebate
- Child Tax Credits
- Child Benefit, depending on income threshold
The Children Benefit threshold mentioned above to qualify for such solar panel grants will determine how much solar panels grants will be worth.
The qualification also varies between single-parent and two-parent households. You can refer to the list below:
- Single-parent households:
- One child – £19,900
- Two children – £24,800
- Three children – £29,600
- Four or more children – £34,500
- Two-parent households:
- One child – £27,500
- Two children – £32,300
- Three children – £37,200
- Four or more children – £42,000
If you are eligible, you can apply for this solar panel grant by contacting a participating energy supplier who will conduct an assessment over the telephone. They will ask questions related to your home and heat needs.
After which, you have to arrange a home visitation with the installer so they can further look into your home and assess if ECO4 is fit for your home and which energy-efficient options suit you best.
There are instances where you can get FREE solar panels installed in your home through the ECO4 scheme. But, the grant would only cover a part of the solar energy system you’ll need in your home.
3. Local Authority Flexible Eligibility (LA Flex Scheme)
The LA Flex scheme is one of the grants for solar panels available in the UK, and it’s an extension of the ECO4 scheme.
As discussed, the ECO4 was an iteration of the ECO3, and one of the improvements they made to the program is LA Flex.
Previously, low-income households who experienced fuel poverty couldn’t qualify for these grants. So, the government tried to widen the net with the LA Flex.
How Does LA Flex Work?
LA Flex allows local authorities to widen the eligibility criteria on who can avail of grants for energy-saving improvements. How it works is similar to the ECO scheme; they only differ in eligibility.
Given that the LA Flex allows councils and local authorities to adjust the eligibility criteria in each region, criteria are no longer limited for UK homeowners to avail of subsidies, unlike other grants for solar panels.
With the LA Flex solar panel grant, homeowners can benefit from FREE FUNDING that covers energy-saving materials, including solar panels for electric heat pumps.
Who Is Eligible and How to Apply
Even if the eligibility criteria for LA Flex are broader, this solar panels grant mainly targets two groups:
- Homeowners experiencing fuel poverty, specifically those who spend at least 10% of their neat income on heating their homes.
- Households vulnerable in cold weather.
There are also three routes in the LA FLex scheme to secure funding for your solar thermal panels at home. They are:
- Low-income households – families whose annual household incomes are less than £31,000.
- Health – individuals suffering from certain health conditions that worsen by living in a cold home. This includes cardiovascular, respiratory, mobility issues, and immune-suppressed conditions.
- Multi-proxy – those with energy bands E, F, or G, along with any two of the following:
- The house is in LSOA 1-3 area.
- The household is receiving a Council Tax rebate based on low-income support.
- The household is vulnerable to cold, as determined by the National Institute for Health and Care Excellence.
- Reference from the Local Authority Delivery scheme, which provides low-income support for households.
- Student members of the families are receiving free school meals.
- The household is struggling with debt or mortgage payments, as well as paying electricity bills and other utility expenses.
If you are eligible for this solar panel grant, you can apply by following a similar process as ECO4 since LA Flex is under the same umbrella.
4. Regional Grants
There are also several regional grants available for homeowners from a specific region. To apply, you only need to check your local council’s website.
The amount you’ll get from these grants will also vary, and it might cover specific products and services. The eligibility criteria might also be different than that of others, so it’s best to check the details before applying.
5. VAT Discount
Another one of the grants for solar panels available for UK households is the Zero VAT discount on solar panels.
There will be 0% VAT charged over products promoting energy efficiency, like solar PV panels, solar thermal panels, hybrid solar panels, and other energy-saving materials. However, this does not cover solar battery materials.
The Zero VAT discount was launched in April 2022 and will be effective for five years. After this, the rate will return to 5%.
In addition, aside from solar panels and a solar PV system, the grant can also be applied to similar materials like broilers, heat pumps, and insulation.
How Does Zero VAT Work?
The Zero VAT discount grant scrapes out the VAT charges on materials used for energy-saving measures.
Hence, families planning to install solar panels on their roof space can save more than £1,000 on installation and £300 annually on their electricity bill annually.
Who Is Eligible and How to Apply
To be eligible for a Zero VAT discount on your solar PV system, solar panel, or other energy-efficient products, you must declare the estimated cost of installation and the materials needed.
You no longer need to go through an application process like the other government solar panels subsidies to avail of this. Your installer automatically applies it upon acquiring their services.
6. The Green Deal
The Green Deal is one of the solar panel grants previously led by the government. But now, it has become a private loan repayment scheme organised to manage the upfront solar power installation cost.
This aims to provide loans for families to purchase and install solar panels, allowing them to maximise solar power to generate electricity.
The Green Deal is not designed like other solar panel funding grants. But, it allows grantees to spread out the accrued cost over 10-25 years.
How Does It Work?
To encourage more homeowners to become solar panel owners, the Green Deal will cover different energy-efficient products while adding loan repayments to energy bills.
If you worry that this will increase your energy prices, don’t be! The top-up will NOT be higher than the energy you can save.
It’s also important to note that the loan is attached to the property, not the one who applied.
Who Is Eligible and How to Apply
Homeowners living in a home with electricity and prepayment metres can avail of Green Deal loans.
Before you can apply, an agent will assess the property and see if you are fit for the Green Deal Finance Plan.
If you’re renting a property, you and your landlord must agree to the improvements, operations and maintenance terms, and other conditions before pushing through with any installations.
Expired Solar Panel Grants
Aside from the solar panel grants listed in this article, other grants for partial or fully-funded solar panels were enacted before but have since lapsed.
These solar panel grants include:
- Renewable Heat Incentive – the Domestic Renewable Heat Incentive (RHI) was launched in 2014 and closed for new applicants last March 31, 2022. This is a grant where the government pays quarterly payments of 20.66p/kWh for seven years after installing the solar panels. The RHI was eventually replaced by the Boiler Upgrade Scheme. However, RHI’s successor does not include solar panels.
- Feed-in Tariff Scheme – the Feed-in Tariff (FIT) is a grant that has gone on for eight years since 2011. Through this, homeowners were being paid for the excess electricity generated by their solar panels and channelled back to the national grid. In the Feed-in Tariff, the payment for the surplus energy produced by domestic solar panels is per kWh. Solar panel owners will be paid for 20 years from the registration date, depending on the size and type of installed solar panels.
- Free Solar Panel Scheme – aside from RHI and Feed-in Tariff grants, homeowners can also avail of the Free Solar Panels Scheme. This is a grant for those who can’t afford the upfront cost of installing solar panels. Companies would rent roof spaces to install free solar panel systems. With this, homeowners can benefit from the Feed-in Tariff payments. However, this grant already stopped along with the Feed-in Tariff scheme in 2019.
Types of Solar Panel Grants
There are several types of solar panel grants you can avail of, and these can be qualified into 3:
National Solar Grants
These are the grants for solar panels funded by the government in the UK on a national scale. The ECO4 scheme, Zero VAT Discount, and the Green Deal are great examples.
Applications from homeowners all over the country can be granted if you avail of these solar grants.
Regional Solar Grants
On the other hand, regional grants are exclusive to a particular region of the UK.
This includes subsidies promoted on a county level that will encourage homeowners from particular regions to avail of such programmes.
Local Solar Grants
On the other hand, local grants are controlled by authorities from a specific locality.
The best example of this is the LA scheme which allows local authorities to fix the eligibility and subsidy.
What You Need When Qualifying for Solar Panel Grants
Given the eligibility criteria set by companies and grants for homeowners, there is a need to provide documents showing that you are eligible for the grant.
Credit Score Requirements
Sometimes, you will be asked for your credit score, especially if you want to utilise a personal loan to pay for the procurement and installation of solar PV systems.
Borrowers with higher credit standing have more chances of getting better repayment terms and rates than those with lower credit scores.
Your household income is also one significant factor in determining one’s eligibility for a grant.
Some grants would require homeowners to belong to a specific income bracket to know if they can get subsidies for solar panel system installation and the amount they should be granted.
Hence, it is best to prepare your income or financial statements to show that you meet the requirements set by the programme.
Home Ownership Requirements
There are grants only allowed for property owners and not those who rent. There are also cases wherein landlords must come to terms with energy-efficient improvements before the tenant can push through with the project.
Hence, proof of home ownership, as a LESSEE or OWNER, is important to have as well. The grant’s assessor will want to determine if you are fit for the grant.
How to Apply for Solar Panel Grants
Applying for solar panel grants will help you benefit from renewable energy and cut costs from your energy bills.
Luckily, grants are available that shoulder the cost of purchasing and installing solar panels and other materials that help with energy efficiency.
Locating Available Grants
The first thing you must do is look for available grants for solar panels or those that cover the products you must install in your home to cut your energy bills, specifically for electricity-efficiency projects.
In researching grants, you must also examine the eligibility criteria and the subsidy they can offer you. The amount you can get might vary, and how they subsidise would differ from program to program.
You can push through with the application process when you’ve chosen the grant you want.
In some instances, an assessor would conduct a home inspection to see if the household fits the program. Hence, contacting the company for home visitation would be necessary as part of the process.
Once your household is cleared, you can proceed with the next steps specified by the grant you chose to apply to.
Documenting Your Eligibility
Another thing you have to prepare is the required documents proving your eligibility. This might also be material in determining how much subsidy you may get from the company.
Some documents you can prepare are your universal credit, home benefits, child tax credits, etc.
Benefits of Solar Panel Grants
With solar panel grants, putting up solar panels and pushing through with energy-efficiency projects has become MORE ACCESSIBLE for a broader range of people.
Through this, households can maximise the use of renewable energy and take advantage of the savings, tax, and environmental benefits.
For one, homeowners will be able to reduce the upfront solar panel prices they must pay, as well as with other essential materials that would be vital for energy-saving projects.
In some grants, the upfront cost may not be reduced, but they can earn from the excess energy they channel back to the national grid to reimburse their investment in the long run.
There would also be instances wherein companies would grant them loans which they can repay in several years so homeowners would find it more appealing to join the UK solar market.
On top of it all, they can benefit from energy bill savings, lower maintenance costs, and sometimes even make money back when making the switch to solar panels!
Businesses can most benefit from tax breaks in the UK. This allows them to deduct approximately 130% of their taxes, specifically on the cost they spent on solar panels.
So, for every £1 a company invests in solar energy, it can reduce its tax bill by 25p.
Regardless of location and employee size, solar power tax breaks are available for big or small businesses. These are good incentives businesses can benefit from, specifically for reducing taxes.
By migrating to solar power, homeowners won’t only reduce their rising energy bills, but they can also reduce carbon emissions and greenhouse gases in the environment.
It also allows more homeowners to adopt a renewable source of energy through solar panels and other solar-powered products.
Solar power is pollution-free, promotes better air and water quality, independence from fossil fuels, and promotes low energy bills.
Frequently Asked Questions (FAQs)
Let’s try answering more of your questions before wrapping things up!
What is the Green Homes Grant?
The Green Homes Grant offers up to £10,000 for energy improvements, primarily solar thermal panels. However, they already closed their applications last March 2021.
Can You Still Get Free Solar Panels?
YES, it is possible to get solar panels for free. However, this depends on the grant you’re applying for and your chosen energy company. Different factors would determine how much a person is entitled to as a subsidy.
That’s a wrap! We hope this guide informed you about the different solar panel grants you can avail of in the UK. You are a few steps closer to minimising your energy bills and benefiting from solar-generated power at home.
Any of these grants would greatly help cut costs or reimburse your investment.
Choosing any of them will surely help you get discounted solar panels and installation. But we highly suggest choosing the ones that would fit your needs best.