Solar Panels Grants and Funding UK (December 2024)

The cost of new solar panels might discourage you from considering an installation for your home. However, in the UK, several government initiatives provide partial or full funding for solar panel installations. This guide will walk you through the available solar panel grants, including what’s offered, eligibility criteria, and how to apply.

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While some of the government initiatives are completely free solar panel grants, others are loans or reductions in VAT that count as solar panel government schemes. Find out more by watching the video below: 

Starting April 2022, homes in the UK can now benefit from zero VAT on the materials and installation of energy-efficient measures. To help households reduce energy bills and increase energy efficiency, the UK government announced a reduction of the current 5% VAT relief on energy-saving measures (e.g. solar panels, heat pumps) to 0%.

In March 2027, the VAT-free period will end, and the rate will return to 5%. If you want to get a head start before it ends, you can begin by comparing solar panel prices to save you the most money. The video below provides a brief overview of the financial incentives on offer:

The Smart Export Guarantee (SEG) came into effect on 1 January 2020 and is currently active. It enables small-scale, low-carbon electricity generators, i.e. homeowners like you, to receive payments for any surplus electricity they export back to the grid.

Although this is not a direct government grant, all licensed suppliers must now offer an export tariff to their customers. Those suppliers with over 150,000 customers are obligated to offer a tariff, while those with fewer can partake voluntarily.

This incentive makes solar panels a great green home improvement project.

As an SEG Generator, you can shop around for different companies to see who offers the best price per kWh that is exported. You can determine the contract length and rate they offer. 

Generally, the rate will range between 1p and 30p per kWh, or 10.8p on average. Because you can choose any SEG Licensee, even one that’s different from your electricity supplier, shopping around for the best rate will get you the best solar panel deal.

See how much you can save based on an average rate of 10.8p in the table below:

All homeowners with regular solar panel systems are eligible under the SEG (up to 5 MW capacity). In addition, the house must be fitted with a smart meter to measure the exports. 

Your solar panel system and installer must be certified under the MCS or equivalent, and your energy supplier may require an MCS certificate.

The ECO4 (Energy Company Obligation) scheme came into effect on 27 July 2022, but ECO4 can be applied to eligible measures installed from 1 April 2022 to March 2026. The government has allocated £4 billion – it spreads 1 billion across 4 years– to improve the energy ratings of UK homes and reduce carbon emissions. 

ECO4 is distinct from ECO3 in that more people will have the chance to qualify because of ECO Flex, which widens the eligibility criteria compared to previous iterations of the scheme.

The ECO4 scheme offers grants to support energy-efficient home upgrades, helping to reduce emissions, lower energy consumption, and cut electricity bills. This includes funding for solar PV panels. Based on your home's eligibility criteria, the ECO4 scheme could even provide solar panels at no cost to you.

The ECO4 is estimated to upgrade approximately 450,000 homes, mostly to EPC band C. 

The government is also letting councils decide on the eligibility criteria based on the needs and specific circumstances of people in the area.

The ECO4 scheme is open to low-income, fuel-poor, and vulnerable households receiving benefits to reduce the upfront cost of solar panels. Eligibility for this scheme does not depend on how old your property is but is primarily determined by the EPC (Energy Performance Certificate) rating of your existing energy systems.

To be eligible for solar PV panels, your home needs to meet these specific requirements:

If you are currently not receiving benefits but are considered low-income, you may still qualify for ECO4 under the ECO4 LA Flex.

LA Flex gives councils the flexibility to determine eligibility criteria in their region — criteria are no longer limited to availing benefits or even based on income and will be tailored to the circumstances of people in the area (e.g., age, number of occupants, number of children, condition of the house, etc.). This means that more people in the UK will be able to get solar panel grants.

If you’re interested in the ECO4 scheme and want to apply for it, all you need to do is contact a participating energy supply. Companies that provide ECO4 measures include:

They will then conduct a telephone assessment by asking you questions about your home and your heating needs. Then, you can arrange a date for an installer to visit your home to confirm whether it’s suitable for ECO4 and which energy-efficient measures are most suitable.

Unsure if your home qualifies or what price you'll get? Our service simplifies the process—just complete a quick 30-second form to get quotes. Maximise savings with grants by comparing up to 4 custom solar installers in your area. Click the button below to start!

The Warm Homes Plan launches in the UK in January 2025. The scheme, announced as part of the new Labour government's budget, offers targeted financial support for solar panel installations to reduce energy bills and promote renewable energy adoption. 

This initiative builds on the government’s commitment to tackling fuel poverty and cutting carbon emissions. The program aims to make renewable energy more accessible to underserved communities, delivering energy-efficient upgrades to thousands of UK households by the end of 2028.

The grants issued through the scheme can be spent on energy performance upgrades and low-carbon heating for homes in England and Wales. Starting next year, low-income households and renters will be eligible to receive up to £30,000 each for home improvement projects.

The solar installation grant helps households lower energy costs through renewable energy, supports the UK's carbon reduction goals, and makes solar technology accessible to social housing tenants, low-income families, and renters who might not otherwise afford it.

Eligibility for the Warm Homes Plan solar installation grant includes:

Eligibility is further determined by:

Applying for the grant goes as follows: 

The second phase of the Home Upgrade Grant is currently underway, providing low-carbon, energy-efficient heating and renewable energy. While the exact measures need to be approved by a local council, they suggest improvements that include installing solar panels.

If you pass the eligibility criteria, the local council will then arrange a home survey to examine how your home could be made more energy efficient.

The amount of finance you receive is regionally dependent, so there are no fixed rates. However, it operates in 45 select local authorities, where residents can potentially receive up to £10,000, which makes it a very lucrative grant. The amount of financing is determined by the specific council in your area, so check with them to see what you can receive.

Slated to run till March 2025, the Home Upgrade Grant is for homes that are:

*Note: if your income exceeds the £39k threshold, you can have an interview with your local authority, and they will decide if you qualify regardless based on other factors.

Certain grants are regionally specific, operating outside of England while still being available in other parts of the UK. Let’s briefly cover two of these.

Launched in June 2023, the Home Energy Scotland Grant and Loan offers £6,000 total, with £1,250 as a grant and another optional £4,750 as a loan. As of June 2024, this scheme is no longer providing new referrals for solar panels and solar energy storage systems. If you've applied before this time, your application will still be processed.

Funding for the grant applies to those who meet all of the following criteria:

This grant, when combined with the optional loan, can cover the potential costs of a 3kW system. This would be ideal for a 2-bedroom house or a small 3-bedroom one. It is one of the most lucrative solar panel grants in Scotland.

The Warm Homes Nest scheme by the Welsh government provides free advice and funding to help improve residential energy efficiency. Homeowners and private renters who are eligible may even qualify for free home upgrades, including solar panel installation. The programme aims to reduce energy costs and improve comfort for households with low energy performance ratings.

You may be eligible for free solar panels if you meet all of the following criteria:

Depending on the grant, you can get partially or fully funded solar panels. The ECO4 scheme can potentially get you free solar panels (or allow for partial payment), while other schemes like Home Energy Scotland can offer grants of up to £10,000, which can cover the cost of a 4kW system. 

The yearly return on investment will be about £660 to £1,005, depending on the size of your home and solar panel system. 

A 4kW solar system, priced between £5,000 - £6,000, can save you around £660 annually and break even in about 8 years. 

Grants like ECO4 can help reduce installation costs, making solar panels more affordable. Full coverage on solar panels would mean you'd profit from these annual savings as soon as you install them.  

With the Smart Export Guarantee (SEG), you can earn up to £108 a year based on an average tariff of 10.8p/kWh. 

Grants are typically means-tested and vary based on your region, income, and benefits eligibility. If you're considering solar energy, GreenMatch can help you receive up to four free, non-binding solar panel quotes in the UK, connecting you with trusted installers to save you hours of time and effort.

All you need to do to get started is click the button below and answer some questions about your heating demands. We’ll take it from there for you.