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Why get solar panels?

  • Generate free, green electricity
  • Reduce your electricity bill by up to 64%
  • Get paid for what you don't use

UK Solar Panel Grants, Funding & Schemes in 2024

Government grants include ECO4 and the Home Upgrade Grant

Solar Together and the Smart Export Guarantee can reduce your costs

Three companies let you pay for solar panels in instalments


Depending on the size of your house, solar panels cost between £2,358 and £11,005, which is a big investment for most people.

Luckily, since they can reduce your annual electricity bill by 70%, solar panels will pay for themselves in 14.6 years, and then actually start to earn you money for the next ten to 15 years of their 25 to 30-year lifespan.

If you want to benefit from solar panels but can’t pay thousands of pounds upfront for them, don’t worry. There are several solar panel grants, financing schemes, loans, and discounts available to help you make a green investment in your future.

In this article, we’ll let you know what government grants and financing schemes are out there, and discuss other ways to get solar panels for less.

All solar panel funding and discounts

0 out of 0
Grant/discount
How much can you save/earn?
Who can apply?
Typical % saving
Average cost of solar panels after saving

ECO4

Home Upgrade Grant

Smart Export Guarantee

Solar Together

VAT discount

Up to 100% of the cost

Up to £10,000

£159 per year

£2,555 on average

£393

Energy-inefficient households on certain benefits

Low-income, off-gas grid homes with EPC rating of D, E, F, or G

Small renewable generators

Homeowners and tenants (with permission) in an active scheme area

Solar panel buyers get it automatically

Up to 100%

97%-100%

21% of your electricity bills

30-35%

5%

£0

£0-£200

N/A

£5,305

£7,860

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What government grants are available for solar panels?

There are currently three government grants to help you buy solar panels for your home:

  • The Energy Company Obligation scheme (ECO4): funding for energy efficient retrofits to fuel-poor households, or ones with occupants on certain benefits
  • ECO Flex: part of ECO4, extends eligibility criteria to households referred to the scheme by their local authorities or energy supplier
  • The Home Upgrade Grant: up to £10,000 in funding for households not connected to the gas grid in 45 select local authorities in England

We go through these three grants in more detail below, including what they cover, the eligibility criteria and how to apply for them.

The ECO4 scheme

The ECO4 scheme is the fourth iteration of the government’s Energy Company Obligation scheme. It obliges medium and large energy suppliers to help low-income and energy-poor households improve their home’s energy efficiency.

Retrofits that the Ofgem-administered scheme covers include insulation, boiler repairs, heat pump installation, and solar panel installation.

There’s no set amount to how much funding you can receive with ECO4, since it’s dependent on your home’s needs.

ECO4 eligibility requirements for solar panels

You might be eligible to get solar panels with ECO4 if:

  • Your home has a low EPC rating
  • AND someone in your household receives certain benefits (full list on Ofgem website)
  • AND your home has an existing electric heating system

It’s important to note that getting solar panels with ECO4 isn’t a guarantee. Your chosen energy provider might decide that installing a biomass boiler, or connecting you to a District Heating Network is a better choice.

Potential savings with ECO4

ECO4 can save you up to 100% of the cost of solar panels, as long as they power an electric heating system.

This means that an average three-bedroom household could save £7,860, the average cost of solar panels for a house of that size.

You’ll also save £537 per year on electricity bills once the panels are installed.

How to apply for ECO4

To apply for ECO4, just get in touch with one of the energy suppliers that has an obligation to carry out energy saving home improvements.

This doesn’t need to be your current supplier, and you can contact multiple suppliers. Ofgem actually recommends doing this so that you can shop around for the best option.

When it comes to getting a grant for solar panels through ECO4, E.ON Energy and Octopus Energy are probably your best bets.

Energy suppliers that can carry out improvements under ECO4

Here’s a list of the energy suppliers that are part of ECO4 and how to contact them:

The great thing about the ECO4 scheme is that there are no upfront costs for the homeowner to pay.

As part of their energy company’s obligation, they pick up the bill for any installation you have done under the scheme. As Kevin Henney of ECO4 Hub, explains, the homeowner “doesn't have to deal with any upfront costs” and “it's extremely rare for a customer to be asked to make any contribution.” Sounds good to us.

The ECO Flex scheme

If you don’t meet the criteria for the ECO4 scheme, you could still be eligible to receive funding from it via the Local Authority and Supplier Flex (ECO Flex) mechanism.

ECO Flex allows local authorities, the Scottish and Welsh governments, and energy suppliers to refer households for ECO4, even if they fall short of the benefits requirements.

ECO Flex eligibility requirements for solar panels

To get a referral from your local authority or devolved government, you must live in an energy inefficient property AND:

  • Have a combined gross annual household income of under £31,000
  • OR a person in your household has a health condition that makes them vulnerable to the cold (a cardiovascular condition, a respiratory disease, limited mobility, or immunosuppression)

To get a referral from your energy supplier, you must live in an energy inefficient house AND fall into one of these key criteria:

  • Be on a non-Pre-Payment meter and have been in fuel debt for more than 13 weeks
  • Be on a Pre-Payment meter and have self-disconnected
  • Have received supplier discretionary/friendly credit within the last 13 weeks;
  • Be in a debt repayment plan with your energy supplier, or
  • Be repaying your fuel debt through 3rd party deductions

To find out if you’re eligible for a grant via the ECO Flex mechanism, contact your local authority (England) or the equivalent if you live in Scotland or Wales (you should be able to find contact details on their website) and ask them if they’re participating in the ECO Flex mechanism.

If they are, they will be able to guide you through the application process.

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Home Upgrade Grant

The Home Upgrade Grant offers up to £10,000 in funding to energy inefficient households located in 45 select local authorities across England.

It’s open from April 2023 to March 2025, and can be used to fund home improvements such as insulation, heat pumps, double glazing, solar thermal, and solar PV panels.

So far, 28% of the grants handed out have been for solar panels, so applying for the grant is worth a shot if you’re eligible.

Home Upgrade Grant eligibility requirements

To be eligible for the Home Upgrade Grant you must:

  • Own and live in a property that’s in one of the 45 local authorities offering the grant
  • AND not use a gas boiler as a heating system
  • AND have an energy performance certificate (EPC) rating of D, E, F or G

In most cases, you also need to have a household income of £31,000 a year or less, but some local authorities accept applicants earning more.

Potential savings with the Home Upgrade Grant

So far, local authorities have covered an average of 97% of the upfront costs associated with solar panels, though this rises to 100% in some cases.

For the typical three-bedroom house, this adds up to a saving of £7,000 on an installation costing £7,200 – and that's before you get to the savings you’ll make on your monthly energy bill.

How to apply for the Home Upgrade Grant

You can find out if your local authority is offering the Home Upgrade Grant, and find their contact information on the government’s website.

Alternatively, you can use the government's eligibility and application tool, to speed through the process.

The Smart Export Guarantee (SEG)

With the Smart Export Guarantee (SEG) homeowners can receive payments from energy suppliers for any unused solar-generated electricity they export back to the grid.

While it’s not technically a solar panel grant, the SEG can increase the savings you make from solar panels, and reduce the time it takes to breakeven.

Energy suppliers determine their own rates under the SEG, and these can vary from as little as 1p per kilowatt hour (kWh) to 29.3 p per kWh offered by Octopus Energy to some of its customers, so it’s worth doing some research and shopping around.

Graph showing the annual savings with solar panels with and without the smart export guarantee in London. The graph shows that you'll save more with the smart export guarantee than without.

SEG eligibility requirements

You can qualify for SEG payments if you generate energy in any of the following ways:

You must have a Microgeneration Certification Scheme (MCS) certificate, or equivalent document – which will be provided by your installer once you are up and running.

You must also have an export meter – that is, a meter that’s capable of measuring your exported electricity.

If you have a smart meter, that automatically qualifies you. If not, check that your meter is eligible with your SEG supplier, as most will require you to have a smart meter before you start receiving payments.

Potential savings with the SEG

You'll typically receive £159 per year from the SEG, with companies paying an average of 12p per kWh for all domestic generators' excess solar energy.

Over your solar panels' lifespan, that adds up to an average total saving of £4,000 – just from the SEG.

If you want to use all the electricity that your panels generate, instead of exporting it, you should consider getting a solar battery, so that you can store the excess electricity your panels produce during the day and use it at night.

How to apply for the SEG

To apply for the SEG, contact your chosen energy supplier, and follow their application process.

You don't have to get your SEG tariff from the same company that you buy your electricity from, but some suppliers offer higher rates to their own customers. If that’s the case, you can switch energy suppliers to get the best SEG rate.

Solar Together

Solar Together is a group-buying initiative that allows communities to buy solar panels for their homes at a discounted price.

It's owned by iChoosr, which has been running collective schemes for energy-switching and solar panels for more than a decade.

Once enough people in a participating council have signed up, solar installers are allowed to enter an auction for the right to do the job, with the lowest bid winning.

You'll fully own your new solar panel system – it'll just cost less than it would if you bought it on your own. Community power in action.

Plus, some of the best solar panel installers are part of the Solar Together scheme. Among them are Everyone’s Energy, who told us that 80% of their customers come from Solar Together.

Solar Together eligibility requirements

To join a Solar Together scheme, you must:

  • Live in a council that's participating in a Solar Together scheme (check which ones are participating)
  • Own your own house or workplace, have your landlord's permission, or be part of a commonhold association
  • Be ready to put down a £150 deposit if you go ahead with the installation

Potential savings with Solar Together

On average, you'll cut your costs by 30-35% if you join a Solar Together scheme instead of installing a system by yourself.

For a typical three-bedroom household, that means saving around £2,555 on the upfront cost of solar panels, meaning you’ll pay £5,305 instead of £7,860 for a 3.5 kW solar panel system, so it’s definitely worth floating the idea on your street’s WhatsApp group.

How to apply for Solar Together

All you need to do is register with Solar Together on their website, for free.

If you fulfil the eligibility requirements listed above, you'll automatically be accepted onto your local scheme, but with no obligation to go ahead with any solar panel installation.

Once the auction has been held, you'll receive a personal recommendation from the winning installer.

You'll usually have five weeks to decide whether you want to accept this recommendation. If you do, you'll need to put down a £150 deposit to cover the costs of a roof survey – and then pay the cost of your solar panel system.

Speaking of winning installers, are you struggling to pick yours? If so, it's worth checking out our page: How to Choose a Solar Panel Installer.

0% VAT for solar panels

Homeowners will pay 0% VAT on solar panels and other energy-saving materials until at least April 2027, compared to 5-20% previously.

This 0% rate will save you money on new solar panels, which should encourage you to jump on the solar bandwagon to reduce your carbon emissions and energy bills in one fell swoop.

What does the 0% VAT apply to?

The new VAT rate applies to these eco-friendly home improvements:

  • Solar panels
  • Air source heat pumps
  • Controls for central heating and hot water systems
  • Draught stripping
  • Ground source heat pumps
  • Insulation
  • Micro combined heat and power units
  • Wood-fuelled boilers

Potential savings with 0% VAT

The 0% VAT rate will save the average three-bedroom household between £230 and £550, and you don't need to do anything to secure it – it'll just be applied to your purchase.

Solar finance and solar panel loans

Here are the companies that currently offer solar panels on finance:

  • E.ON
  • Scottish Power
  • SolarStyle
  • Sunsave

These companies offer low-interest solar panel loans that require monthly instalments, with interest rates and repayment periods that vary from 0% over 1-3 years to 7.9% over 10 years.

You may also be able to get a loan from your bank to cover solar panel installation costs. Most banks offer personal loans specifically for home improvements, which could be used for renewable energy developments.

How to get solar panels for less without a grant or loan

If you can’t afford the total upfront cost of a brand new solar panel system and would rather not take out a loan, try getting quotes from multiple installers to find the cheapest solar panels.

Solar panel installer Everyone’s Energy told The Eco Experts that customers should get five quotes from different installers before signing a contract.

Just make sure you check qualifications and customer reviews before going ahead with an installer.

Some councils around the UK are also offering to install solar panels onto council houses for a discounted price – but this depends on the amount of funding the borough has. Find out more about this on our page: Can You Put Solar Panels On Your Council House?

Key takeaways

  • There are no government grants specifically for solar panels, but some grants can be used to install them as part of energy efficient upgrades
  • There are financing and loan options that make paying the upfront costs of solar panels more manageable
  • The Smart Export Guarantee pays solar panel owners for their excess electricity, increasing savings by £159 a year on average
  • The average home will save £537 per year with solar panels
  • 69% of people would buy a property with solar panels, up from 65% last year, according to our latest National Home Energy Survey
  • 2023 was a record year for residential solar installations

Next steps

So there you have it, all the ways you can get solar panels for less through grants, loans, and group buying schemes.

In most cases, it’s not possible to get solar panels completely free, but they’re still a worthy investment.

There are several grants, financing schemes, and group buying projects designed to help you manage the upfront costs of solar panels, plus, you'll break even on them in 14.6 years on average.

That leaves you with 10-15 more years of clean energy savings, so solar panels more than pay for themselves. If you’re interested in getting solar panels, regardless of if you qualify for a grant or not, you can fill in our short quotes form.

We'll pass your details on to our trusted network of solar panel installers, who'll get back to you with bespoke quotes for you to compare.

FAQs: Solar panel grants, funding, and schemes

The Feed-in Tariff came to an end in April 2019, but anybody who signed up before the deadline will still receive payments until their contract (usually 20 years long) expires.

It’s been replaced by the Smart Export Guarantee (SEG), where energy suppliers pay homeowners for the excess electricity their solar panels produce.

The Renewable Heat Incentive closed to new applications on 31 March 2022.

It was replaced with the Boiler Upgrade Scheme, a government-funded initiative that no longer applies to solar panels, but reduces the cost of an air or ground source heat pump by £7,500.

The Green Homes Grant ended on 31 March 2021. The scheme wasn’t very successful, and was even called “shambolic” by NGO Greenpeace UK.

The Home Upgrade Grant serves as a de facto replacement for this failed scheme.

Written by:
Tatiana has written about multiple environmental topics, including heat pumps, energy-efficient household products, and solar panels. She is dedicated to demystifying green tech to make eco-friendly living more accessible.
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