Solar Panels Grants in the UK: Funding Explained (Guide 2024)

Solar panels are a great environmentally friendly way to produce free electricity for your home. However, the question remains: are they worth buying in the UK in 2024? In this article, we’ll answer this question by going through the different government schemes available to you.

Aside from grants, another factor that can drastically save money is the installer you hire. To get the best solar panels for your household, you’ll need a reliable one. While finding an installer can ordinarily take days of strenuous research, our service can simplify your search and save you the headache of having to call several companies by yourself.

You can get up to 4 competitively priced solar panel quotes from different local installers by completing our 30-second form. Just click the button below to get started.

There are several government grants for solar panels in the UK, promoting energy efficient upgrades, renewable power, and helping decrease carbon emissions. The EU’s Renewable Energy Directive set out for all member countries to reach a 32% renewables target before 2030. The UK has been working towards that goal, as the focus is to move forward by introducing more schemes and incentives in the renewable energy sector.

This tendency was accompanied by a decrease in the cost of solar panels. Thus, getting cheap solar panels doesn't necessarily have to mean getting low-quality panels anymore. Though there aren’t any grants in the traditional sense, there are opportunities for solar panel funding in the UK. Currently, the only scheme open to new applications is the Smart Export Guarantee (SEG).

Overall, there are six notable solar incentives for solar panels in the UK that will be covered in this guide:

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: 

Yes! You can get free solar panels through some particular grants and schemes in the UK. While other grants offer funding towards new solar panels, or the opportunity to make money back through an export tariff, certain schemes specifically offer full coverage on new solar panels. Below we've provided a brief overview, later we will go into more detail: 

The application process and eligibility criteria for each of these are different, so let’s go over each policy.

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:

According to the UK Government, a typical household with a rooftop solar panel array will save more than £2,850 for the average 2-3 bedroom house (4kW system + battery) in total installation costs, compared to the original 20% VAT.

Prices and savings figures shown are estimates as of September 2024. For the best prices, we recommend contacting professional installers

Additionally, our estimates show potential savings of up to £660 in annual energy expenses for average-size homes. This can decrease the break-even point of such a system by 4 to 5 years, i.e., down from roughly 8 to 10 years.

The 0% VAT also applies to other energy-saving materials, besides solar panels, such as heat pumps, biomass boilers, insulation, and more.

The zero VAT rules also welcome the permanent removal of specific eligibility criteria that previously applied to the 5% reduced rate. You can read about this on the government’s website for the full details.
To be eligible, your home and new installation need to meet some specific requirements to benefit from a 0% VAT rate:

If the installation and energy-saving material qualifies, then the 0% VAT will be automatically applied by your installer. Hence, there’s no need to complete any application process. To find a trustworthy installer who can provide you with the best services, you can also try our completely free service and we’ll provide you with the best prices from professionals in your area.

Instead of spending hours calling multiple installers and comparing prices all by yourself, you can instead fill out a simple, 30-second form and we’ll get you 4 free, non-binding quotes from the most reliable ones in your region. Click the button below to get started.

The Smart Export Guarantee (SEG) came into effect on 1 January 2020 and is currently active. It enables small-scale, low-carbon electricity generators 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 20p per kWh. With the highest available tariff, you could reduce your payback time from 9 to 7 years. 

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 deal.

Based on a 1 – 20p per kWh rate, with the average rate being about 5.5p. Here is an example table using various household sizes and the average rate:

Prices and savings figures shown are estimates as of September 2024. For the best prices, we recommend contacting professional installers

Keep in mind that rates vary and, with the right energy supplier, homes potentially earn even more than the numbers outlined above.

All homeowners with regular solar panel systems are eligible under the SEG (up to 5 MW capacity, which would be 1,000 times bigger than a domestic 1kW system). In addition, the house must be fitted with a smart meter to measure the exports. Some energy suppliers also offer only special rates for energy exported from specific solar batteries. This will determine whether the overall solar battery storage price, together with the solar system, will go down.

For a comprehensive list of tariff rates, check out our Best SEG Tariff in the UK page. 

It's also worth keeping in mind that the SEG applies to MCS-certified installations. Therefore, it does not apply to DIY solar panels in the UK, unless they have been properly assessed or installed by an MCS-certified technician.

To be an SEG Generator, you will need to shop around for an SEG Licensee (an electricity supplier authorised to offer an SEG tariff) and apply directly to them. All SEG Licensees are obliged to offer an SEG tariff to all eligible generators. However, each one will have its specific application process that you will need to follow up on.

Before you can start applying for SEG tariffs, you need to first lock in an energy-efficient and tailormade panel that’s suited to your home’s needs. This will ensure you are saving at the start itself since you don’t want to apply grants to panels that are sub-par or not a fit for your home.

If a solar funding scheme or grant has piqued your interest, you’ll need a professional to see if it applies to you.

ECO4 (Energy Company Obligation) replaced ECO3 on 1st April 2022 and will run until March 2026. The government has allocated 4 billion pounds– 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 LA Flex or flexible eligibility.

The scheme came into effect on 27 July 2022, but ECO4 can be applied to eligible measures installed from 1 April 2022 to March 2026.

Through the ECO4 Scheme, the government allocated £4 billion towards the installation of solar panels and heat pumps across the UK (excluding Northern Ireland). The government is also letting councils decide what the eligibility criteria will be depending on the needs and specific circumstances of people in the area.

ECO4 allows low-income households the opportunity to replace their inefficient heating system with a more efficient and environmentally friendly system, such as solar PV panels. The ECO4 scheme can potentially help procure entirely free solar panels, depending on the qualifying factors of your home.

The ECO4 is estimated to upgrade approximately 450,000 homes, mostly to EPC band C. Qualified households will reduce the average household energy bills by around £290. But for the least efficient homes, this could save as much as £1,600 annually.

The ECO4 scheme is open to low-income, fuel-poor, and vulnerable households receiving benefits so that they can reduce upfront solar panel costs. 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.

Before moving on to the rest of the available grants in the UK, it’s important to mention that the key to maximising savings through solar panel funding is choosing the right panels. You don’t want to apply grants to sub-par panels or panels that aren’t the right fit for your home.

What’s notable about ECO4 is that eligibility isn’t just limited to household income or people on benefits, but can expand to accommodate the age and health of residents, number of people in the house, condition of the home, etc.

If you’re unsure whether your home qualifies or what price you’ll get, it’s best to contact multiple installers. While finding good ones can be difficult on your own, our service can easily provide you with prices and all you have to do is fill out a 30-second form.

Maximise savings through grants by comparing up to 4 tailor-made solar systems available near you. Click the button below to get started.

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.

As of February 2024, the Department for Energy Security and Net Zero (DESNZ) have confirmed that the 4th phase of the Public Sector Decarbonisation Scheme (PSDS) is being launched. The plan aims to cut emissions from public sector buildings by 75% by 2037. The scheme is headed by Salix Finance, with funding geared towards public sector bodies and not domestic solar panel installations.

Both the Public Sector Decarbonisation Scheme and a sister scheme, the Public Sector Low Carbon Skills Fund, are part of an initiative meant to supply technologies like renewables and solar panels to different forms of institutions, which can be useful for obtaining commercial solar panels.

In the case of the public sector fund, it can supply panels to bodies in England, but also to other areas of reserved public services across the UK. This means that the amount of funding is dependent on local municipalities and may be subject to regional availability. Check with your local authority to confirm whether your area provides this one.

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 £400 to £600, making it a worthwhile purchase.

Prices and savings figures shown are estimates as of September 2024. For the best prices, we recommend contacting professional installers

Yes, it’s possible to get a grant that covers the full cost of solar panels, but this depends on your energy needs and home eligibility. For a typical 3-bedroom home in the UK, a 3kW to 4kW solar panel system, costing between £4,500 and £6,000, would usually be sufficient. The break-even point can range from 9 to 12 years, especially if you export excess energy back to the grid. To maximise efficiency, it's important to install your system in the best direction for solar panels and keep them well-maintained for optimal performance over their 25-year lifespan.

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.