- The average cost of solar panels is £5,000 to £6,000 for a 2-3 bedroom house
- If you don’t qualify for a grant, finance options are available
- Octopus Energy’s buy now, pay later scheme is the latest finance option
- Check with a financial adviser before making a decision
If the upfront costs of solar panels seem like too much of a hurdle, and you don’t qualify for a grant, you can still get all the benefits with the range of financing options available.
You probably already know that solar panel grants, such as the ECO4 and ECOFlex schemes can help massively, but in this guide we’ll go through all the best alternative financing options, including how to apply and how to make sure you’re getting the best deal.
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What solar panel financing options are there?
Before we discuss what solar financing is available, take some time to explore our solar panel grants guide to see if you are eligible.
If you aren’t eligible for these, consider looking into a loan or finance. But remember, this isn’t an option for everyone. Consider your financing beforehand or speak to a finance expert before applying.
At the time of writing, the best available finance options include, but are not limited to:
- Octopus Energy ‘buy now, pay later’ scheme – Earlier this year, Octopus Energy partnered with third-party lenders to offer a buy now, pay later scheme for solar panels. The third-party lender will finance the purchase and installation of solar panels for Octopus Energy’s nearly 7 million customers, with the cost spread over up to 84 instalments over seven years at a representative 9.9% APR.
- E.ON solar panel finance – E.ON offers a finance option, too. You’re able to spread the cost of solar panels over three years, with no upfront payments and a 0% APR representative option. They also offer a deposit option, where you pay a deposit and settle the payment within seven days of installation and is subject to a credit check.
- ScottishPower – ScottishPower announced the launch of consumer finance options last year for the first time. Homeowners will be able to spread the cost of solar and battery storage installations over three-to-five-years, starting at £132.45 a month with no deposit or VAT.
- SolarStyle – The first finance option SolarStyle offers is you’re able to spread the cost of your solar system with up to one year’s 0% APR interest-free credit. Its second option allows you to pay a deposit and within seven days, settle the remaining balance.
- Sunsave – Sunsave is delivered as a 20-year subscription, which includes the design, supply, financing and installation tailored to your home, plus ongoing monitoring, maintenance and insurance through the Sunsave guarantee for the length of your subscription. It offers long-term financing that spreads the cost of a solar panel system over 20 years, meaning you’ll make smaller monthly payments.
Affordability will differ from household to household, but financing solar panels can be a good way to take advantage of the savings they offer while spreading the cost.
Can I still get solar panels if I don’t qualify for a grant?
Grant eligibility requirements are pretty strict and geared more towards lower-income households. Some households that don’t meet the grant criteria might struggle with the cost, but they can still benefit from solar panels.
In this case, options include:
- Subscription – Some companies, like Sunsave – mentioned above -, offer a subscription service where you’ll pay a small monthly fee for 20 years, which will include everything you need to finance and maintain your solar panels. Your subscription will end after 20 years, but you’ll keep your solar panels.
- Installation company financing – More and more installers (national largely) will offer a monthly payment option to help spread the cost of solar panels. Pay attention to the interest rates and carry out an affordability check before committing.
- Adding to mortgage – Many mortgage providers will consider a solar panel installation that is accretive to the value of your home, like other energy- and cost-saving home improvement investments like improved insulation. It is worthwhile asking your mortgage provider to extend the borrowed amount to finance your solar panel installation.
- Solar loans – It is possible to get a personal loan to finance solar panels. But note that this type of financial product is often provided by a bank or other financial institution, and the terms are flexible depending on your credit score and the duration of the loan required. You should consider the interest rates, which can vary according to the duration of the loan.
- Solar Power Purchasing Agreements – This is a contractual agreement between energy suppliers and buyers, making it feasible to invest in solar panels. With a solar PPA, the producer or business arranges the design of it before gaining the necessary permissions and managing the installation of a solar system on your property at little or no cost.
What are the benefits of solar power financing?
With rising energy costs and growing interest in sustainable living, more UK homeowners are exploring solar panels as a long-term investment. Financing makes solar more accessible, whether through loans, ‘pay as you save’ schemes or leasing arrangements.
That being said, the pros of getting financing for solar panels include:
- Reduced upfront costs – One of the most significant benefits of financing is that you don’t need to pay the full cost of a solar installation upfront—which can efficiently run into thousands of pounds. Instead, costs are spread over time through manageable monthly payments.
- Lower energy bills from the off – If your financing payments are lower than your typical electricity bill, you can save money immediately. Solar panels help reduce your reliance on grid electricity, which can buffer your household from price volatility.
- Eligibility for export payments – If you own your solar panels (as with most loan-based financing), you can sign up for the Smart Export Guarantee (SEG). This scheme pays you for surplus electricity you export back to the grid, helping offset your investment.
- Pay no VAT – Since April 2022, VAT has been reduced to 0% for solar panel installations on residential properties in the UK, making the total cost of installation more affordable—even when financed.
- Improved EPC rating and property value – A solar installation can boost your Energy Performance Certificate (EPC) rating, which is increasingly important in the UK housing market. A better EPC rating may make your home more attractive to buyers and renters.
Other things to consider
- Long-term financial commitment – Financing a solar system typically involves a multi-year repayment plan, sometimes over decades. While monthly payments may be affordable, they tie you into a contract that could outlast your stay in the home.
- You might not qualify for SEG with a lease – If you choose a lease or power purchase agreement (PPA) rather than buying the system (even on finance), you may not be eligible for the Smart Export Guarantee. This means missing out on payments for excess energy exported to the grid.
- Interest and fees can add up – Like any loan, solar financing can come with interest charges or setup fees that increase the overall cost of the system. Long-term savings might still outweigh the price, but it’s worth crunching the numbers or getting financial advice.
- Complications when selling your home – If you’ve financed the system through a loan or lease, selling your property can be more complex. Prospective buyers may be wary of taking on your agreement, or lenders may require it to be settled before the sale.
- Limited availability of government support – Unlike in the past, the UK no longer offers generous national grants like the Feed-in Tariff. While the zero-VAT incentive helps, there’s less direct government support than there used to be—so financing needs to make financial sense based on your usage and circumstances.
How do I apply for financing?
In most cases, you should meet with a financial advisor to determine your affordability, but below is an overview of how you can begin to apply for financing:
- Evaluate your financial situation – Review your income and expenses, from mortgage or rental payments to your weekly shop and anything else you have on finance. Also, look at your credit score, as this will impact your options.
- Research finance options – It’s not a one-size-fits-all and not every finance option will be suitable. Research your options and make a decision based on your financial situation.
- Have the right documents – You’ll need documents exploring your financial situation, usually bank statements, as well as property ownership and your plans on how solar panels will benefit you.
- Apply – Once you’ve made your decision on which finance option suits you, head to their website and apply. Similarly, work with a finance or mortgage advisor if you plan to get a loan or extend your mortgage.
How do I know I’m getting a good deal?
This is where working with a professional is a good idea because they will help you get a good deal based on your individual circumstances, but some things indicate a better deal than others:
- Zero deposit – This can be a good deal for initially installing solar panels, as it negates the initial cost, however, check the monthly payments. If they increase significantly, it might not be as good a deal as you think.
- Interest rates – A high interest rate can add hundreds, if not thousands, to your final cost, which will also take longer for you to break even on your solar panels, and the savings might be worth it. A low interest rate is better, but a professional can help you find the best interest rate for you. Similarly, some sites offer a repayment calculator based on their interest that you can use to give you a better idea of your repayments.
- Hidden costs – Check for any hidden costs. These can be anything from interest rates to admin fees and penalty charges.
It’s important to add that these fees can increase the cost of solar panels, extending the break-even point and reducing overall savings.
The Labour government aims to triple the UK’s solar capacity by 2030 as part of its broader clean energy push. Since taking office, it has approved three major solar farms in the East of England—Gate Burton, Sunnica, and Mallard Pass—which together will generate over 1.3 gigawatts of clean energy.
In addition, Energy Secretary Ed Miliband has announced plans for a UK-wide rooftop solar revolution, encouraging adoption among homeowners and builders. The government has also allocated £185 million specifically for solar and other established technologies as part of a £1.5 billion renewables fund.
Summary
- The average UK household can expect to pay £5,000–£6,000 for a solar panel system, making financing an important consideration.
- If you don’t qualify for a grant like ECO4 or ECOFlex, solar financing could help make your system more affordable.
- Providers like Octopus Energy, E.ON, and Sunsave offer flexible finance options ranging from interest-free plans to long-term subscriptions.
- Financing allows you to benefit from lower energy bills and export payments without the burden of upfront costs.
- However, long-term contracts, interest charges, and potential home-selling complications should be carefully weighed.
- Always compare offers and speak to a financial adviser to ensure your plan fits your budget and long-term goals.
